Access over 20 million homework & study documents

The Definition of Stock Valuation Being an Owner

Content type
User Generated
Type
Study Guide
Rating
Showing Page:
1/28
March 2012
FINACIAL
MANAGEMENT
STOCK VALUATION
- CASE STUDY -

Sign up to view the full document!

lock_open Sign Up
Showing Page:
2/28
Case Study - Stock Valuation Financial Management
Contents
Introduction ............................................................................................................................................. 3
The Definition of a Stock ......................................................................................................................... 3
The Definition of Stock Valuation ............................................................................................................ 3
Being an Owner ....................................................................................................................................... 4
Different Types Of Stocks ........................................................................................................................ 5
Common Stock .................................................................................................................................... 5
Preferred Stock .................................................................................................................................... 5
Different Classes of Stock ........................................................................................................................ 5
What Causes Stock Prices To Change? .................................................................................................... 6
Stock Valuation Methods ........................................................................................................................ 8
Earnings Per Share (EPS). .................................................................................................................... 9
Price to Earnings (P/E). ........................................................................................................................ 9
Constant Growth Stocks .................................................................................................................... 10
Expected Rate Of Return On A Constant Growth Stock ................................................................ 10
Non Constant Growth Stocks ............................................................................................................ 11
Stocks and Their Valuation - Mini Case ................................................................................................. 13
Conclusion ............................................................................................................................................. 26
References ............................................................................................................................................. 27
Professor's notes ................................................................................................................................... 28

Sign up to view the full document!

lock_open Sign Up
Showing Page:
3/28

Sign up to view the full document!

lock_open Sign Up
End of Preview - Want to read all 28 pages?
Access Now
Unformatted Attachment Preview
 March 2012 Contents Introduction 4 The Definition of a Stock 4 The Definition of Stock Valuation 4 Being an Owner 5 Different Types Of Stocks 6 Common Stock 6 Preferred Stock 6 Different Classes of Stock 6 What Causes Stock Prices To Change? 7 Stock Valuation Methods 9 Earnings Per Share (EPS). 10 Price to Earnings (P/E). 10 11 Constant Growth Stocks 11 Expected Rate Of Return On A Constant Growth Stock 11 11 Non Constant Growth Stocks 12 Stocks and Their Valuation - Mini Case 14 d. 3. What is the stock’s expected value one year from now? 18 m. Why do stock prices change? Suppose the expected D1 is $2, the growth rate is 5 percent, and rs is 10 percent. Using the constant growth model, what is the impact on stock price if g is 4 percent or 6 percent? If rs is 9 percent or 11 percent? 26 n. What does market equilibrium mean? 26 o. If equilibrium does not exist, how will it be established? 26 Conclusion 27 References 28 Professor's notes 29 Introduction As a subject of our research we've decided to focus on stock valuation. Our seminary paper is designed in such way that we started by introducing couple of basic terms before entering deeper analysis. Before starting, there are a few facts everyone should know. Each stock is different, and each industry sector has unique properties that may require varying valuation approaches. Through this paper we will attempt to explain the general cases of when to use most of the valuation methods although it does not have ...
Purchase document to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Anonymous
Nice! Really impressed with the quality.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4