Stock Valuation. FIL 341 Prepared by Keldon Bauer. Introduction. The valuation of all financial securities is based on the expected PV of future cash flows. Equity Valuation.
Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.
Prepared by Keldon Bauer
Where: P0 = Price of stock today.
D0= Most recent dividend (or cash flow).
g1 = Growth rate over the first growth period.
k = Required rate of return for common equity.
T = Length of time the first growth rate is expected to last.
g2 = Growth rate over the second growth period.
$18.62Non-Constant Growth - Example
$24.44 = Present Value