Valuation of Common Stock Ashok Banerjee Common (Equity) Stocks • Because common stock never matures‚ today’s value is the present value of an infinite stream of cash flows (i.e.‚ dividend). • But dividends are not fixed. • Not knowing the amount of the dividends—or even if there will be future dividends— makes it difficult to determine the value of common stock. • So what are we to do? Valuation Models • Dividend Valuation Model (DVM): – Constant dividend: Let D be the constant DPS: The required
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The Foreign Exchange Market What is the Foreign Exchange Market? The Foreign Exchange Market is the financial market in which currencies are bought and sold that is a transaction is entered into where a given amount of currency is exchanged for another amount of currency. The need for the Foreign Exchange Market (commonly referred to as the Forex Market) developed to facilitate International trade where currencies were required to be settled from the country of both the importer and the exporter
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stakeholders e.g. customers‚ employees‚ suppliers‚ public‚ communities”. Do you agree or disagree? Explain what you answer is and why have you reached that conclusion. You are to include a clear rational argument for your case that has strong examples to support your thinking. Unlike shareholders who are solely interested in return dividends and share price growth‚ stakeholders have wide variety of interests in how companies operate. Freeman (1984) stated that stakeholders are‚ “any group or individual
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Financial Crises and Firm Performance Financial crises • Financial crises could happen anywhere‚ although emerging markets tended to be more seriously afflicted in recent times • Companies operating in a region where a financial crisis had broken out could undergo corporate disasters as a result. • The following sections describe what happened during three major financial crises in the late 1990s and early 2000s‚ and how the business sectors of the regions were affected. • The best-known of
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Summary The purpose of this report is to evaluate the stock price of Wal-Mart Stores Inc. (which ticker symbol in NYSE is WMT) by fundamental analysis. According to this analysis‚ I recommend that Wal-Mart is worth to invest in the long term because of the potential growth of market shares and revenue. Besides‚ based on P/E method and Gordon model‚ WMT price is undervalued; therefore‚ if investors buy the stock‚ they will get benefit not only in capital gain but also in dividend cash inflow. II. Introduction
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Firm Reputation and Horizontal Integration∗ Hongbin Cai† Ichiro Obara‡ March 14‚ 2008. Abstract We study effects of horizontal integration on firm reputation. In an environment where customers observe only imperfect signals about firms’ effort/quality choices‚ firms cannot maintain good reputation and earn quality premium forever. Even when firms choose high quality‚ there is always a possibility that a bad signal is observed. Thus‚ firms must give up their quality premium‚ at least temporarily
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CHAPTER 9 OLIGOPOLY AND FIRM ARCHITECTURE 1. The demand function for a product sold by an oligopolist is given below: QD = 370 – P The firm’s marginal cost function is given below: MC = 10 + 4Q Calculate the equilibrium price and quantity. Solution: P = 370 – Q so TR = 370Q – Q2 and MR = 370 – 2Q MR = 370 – 2Q = 10 + 4Q = MC so Q = 60 and P = 310 2. The demand function for a product sold by an oligopolist is given below: QD = 135 – 0.5P The firm’s marginal cost function is given below:
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DETERMINANTS OF STOCK PRICE FLUCTUATION IN NEPAL By GEETA SHRESTHA Shanker Dev Campus T.U. Regd. No. 7-2-38-2204-2001 Campus Roll No. : 289/061 A Thesis Submitted to: Office of the Dean Faculty of Management Tribhuvan University In partial fulfillment of the requirement for the Degree of Master’s in Business Studies (M.B.S) Kathmandu‚ Nepal February‚ 2009 RECOMMENDATION This is to certify that the Thesis Submitted by: GEETA SHRESTHA Entitled: DETERMINANTS OF STOCK PRICE FLUCTUATION
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What is cost of capital? The cost of capital is the cost of obtaining funds‚ through debt or equity‚ in order to finance an investment. It is used to evaluate new projects of a company‚ as it is the minimum return that investors expect for providing capital to the company‚ thus setting a benchmark that a new project has to meet. Importance The concept of cost of capital is a major standard for comparison used in finance decisions. Acceptance or rejection of an investment project depends on the
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graphically by a curve and the quantity supplied as a point on that curve associated with a particular price 7) When labor is the variable input‚ the average product equals the D. quantity of output divided by the number of workers 8) The increase in output obtained by hiring an additional worker is known as B. the marginal product 9) Which of the following is the best example of a long-run decision? A. An automobile manufacturing company is considering whether or not to invest in
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