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Method of Stock Valuation for Students

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Method of Stock Valuation for Students

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  1. Method of Stock Valuation for Students

  2. Intrinsic Value of Stock • The investor would like to beat market and they should understand stock valuation. The stock valuation involves the process of understanding intrinsic value of the stock. The priority of stocks valuing consists of fact where the intrinsic value in stock has been associated with the present price.  

  3. How to value a stock • The valuing stocks involves complicated process which will be checked as mixture of science and art. The investors could be surprized by information. They are utilized in valuing stocks It includes financials, economic reports, newspapers, stock reports. • The investor has to filter pertinent information from useless noise. The investor should understand major methods of stock valuation.

  4. Types of Stock Valuation • Absolute • Relative

  5. Absolute Stock Valuation • Absolute stock valuation depends on basic facts about the company. The method consists of analysis of financial facts found in financial statements of company. The techniques investigates cash flows of company, growth rates and dividends.

  6. Relative stock valuation • Relative stock valuation is associated with the comparison of investment with same type of companies. There is a relative stock valuation method tackling calculation of major financial ratios of same type of companies along with derivation in similar ratio for target company.  

  7. Dividend Discount Model • The dividend discount model includes the fundamental technique of absolute stock valuation. It includes the assumption of the dividend of company show cash flow of company to the shareholders.

  8. Discounted Cash Flow Model Discounted cash flow model represents a well known method of the absolute stock valuation. There is an intrinsic value in the stock and it had been calculated by discounting free cash flows of company for the value at present.

  9. Comparable Companies Analysis • The comparable analysis involves an instance of relative stock valuation. Rather than understanding intrinsic value of stock utiliing the basic feature of company, there is a comparable approach and it had a target to get the theoretical price of stock. The price had been used a number of times for same type of companies.

  10. Popular Methods of Stock Valuation • Dividend Discount Model involves the fundamental technique of the absolute stock valuation. • Discounted Cash Flow Model involves a new method of the absolute stock valuation. • Comparable Companies Analysis

  11. Inventory Valuation Influencing Profit • The Purchase and production cost in inventoryincludes the important role in understanding gross profit. The gross profit is calculated by removing cost of goods sold from the total sales. The total decrease in the  inventory cost is due to the low cost of goods which have been sold.

  12. Contact Us • Visit: https://www.dreamassignment.com/financial-management-assignment-help • Email: info@dreamassignment.com • Call: +14235002312

  13. Thank You

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