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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Chapter 9 The Valuation of Stock TRUE/FALSE T 1. The expected return depends on future dividends and future price appreciation. T 2. The dividend-growth valuation model depends on dividends and the required rate of return. F 3. The dividend‑growth model includes both the current and past years’ dividends. T 4. If the anticipated return exceeds the required rate of return‚ the investor should buy the stock. F 5. The dividend‑growth model requires that dividends
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The New York State Fair The Great New York State Fair is a great way to end the summer here in upstate New York. The fair takes place in Syracuse‚ NY on 375 acres. The twelve day long festival happens to be the oldest in the country. First held in 1841; however‚ still is a tradition every year today. For a fee of ten dollars and all of the entertainment you can ask for it cannot be beat. The fair includes Midway rides and entertainment‚ agriculture‚ and even concerts that are included in the ten
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several stock exchanges and broker/dealer networks that have come into the computer age of finances. The street ’s location put it in the perfect position to become the base for the import and exports of the new colony. Despite the fact that New York City was the temporary capital of the United States from 1785 to 1790‚ the first real stock exchange begun in Philadelphia‚ Pennsylvania in 1790. This was a simple finical market in which traders needed to have their offices close to the stock exchange
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’Stock Records Accuracy’ means: (1) a correspondence between what is present on the computer file and what physically exists‚ in reality‚ (2) that activities which have been recorded as taking place against stock are truly what in fact occurred‚ and (3) that no activity which took place is unrecorded in the system. As we shall see‚ the central stock file is a most important element of any system within the company. The records within the file are ’keyed’ on each product’s unique item code**. That
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Industrial Average‚ the Dow Jones‚ the Dow 30‚ or simply the Dow‚ is a stock market index‚ and one of several indices created by Wall Street Journal editor and Dow Jones & Company co-founder Charles Dow. The average is named after Dow and one of his business associates‚ statistician Edward Jones. It is an index that shows how 30 large‚ publicly owned companies based in the United States have traded during a standard trading session in the stock market. It is the second oldest U.S. market index after the Dow
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go through the motions‚ but to be good citizens we should believe in‚ protect‚ and defend the freedoms we were granted when this country was founded. These freedoms were based on what the founding fathers valued‚ and these values are the foundation of our democracy. What I value most as an American is justice‚ equality‚ and individual rights. First‚ justice is similar to the idea of fairness. This means there are consequences for both good and bad. If a person does something good‚ they should be
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EQUITY MARKET In financial markets‚ stock is the capital raised by a corporation through the issuance and distribution of shares. A person or organization which holds shares of stocks is called a shareholder. The aggregate value of a corporation’s issued shares is its market capitalization. When one buys a share of a company he becomes a shareholder in that company. Shares are also known as Equities. Equities have the potential to increase in value over time. It also provides the portfolio with
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The Philippine Stock Exchange‚ Inc. ("PSE" or the "Exchange") is a private organization that provides and ensures a fair‚ efficient‚ transparent and orderly market for the buying and selling of securities. PSE traces its roots from the country’s two former bourses: the Manila Stock Exchange ("MSE") and the Makati Stock Exchange ("MkSE"). Founded in March 1927‚ the MSE was the first stock exchange in the Philippines and one of the oldest in Asia. Originally housed in downtown Manila‚ the MSE moved
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Stock control methods There are several method for controlling stock‚ all designed to provide an efficient system for deciding wha‚ when and how much to order. You may opt for one method or two or more if you have various types of stock. * Minimum stock level - you identify a minimum stock level‚ and re-order when stock reaches that level. This is known as the just in time methd. * Stock reviw - you have regular reviews of stock. At every review you place an order to return stocks to
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