Browse:  #  A  B  C  D  E  F  G  H  I  J  K  L  M  N  O  P  Q  R  S  T  U  V  W  X  Y  Z 

Stock valuation

Stock valuation Definition

There are several methods used to value companies and their stocks.

The most theoretically acceptable stock valuation method, called income valuation or discounted cash flow method, involves discounting the revenues (dividends, earnings, cash flows) the stock will bring to the stockholder in the foreseable future, and a final value on disposition. The discount rate has to include normally a risk premium.

In some cases an asset valuation is also made. This entails analysing the assets and liabilities of the firm. This type of valuation is typically done if the company is expected to cease operations. It will provide a "termination value" rather than the "ongoing operations value" obtained from the income valuation method.








Ask a Question

Learn the famous formula for money-making, based upon the THIRTEEN PROVEN STEPS TO RICHES! Get your FREE Copy & Instant Access to Think and Grow Rich by Napoleon Hill just by signing up.
 
   
Newsletter cover
Browse:  #  A  B  C  D  E  F  G  H  I  J  K  L  M  N  O  P  Q  R  S  T  U  V  W  X  Y  Z