Chapter 8 - Stock Valuation Chapter 8 Yihui Wang Stock...

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Stock Valuation -- Chapter 8 Yih i W Yihui Wang Stock Valuation
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Main Issues Stock valuation Dividend discount model Comparables approach (market approach) Important features of common stock The stock markets Stock Valuation 2
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What is Common Stock Common stock: is a certificate of ownership in a corporation. represents a claim against the residual value of the firm, which is the value after all other claimants are getting paid. Payments to common stock are dividends P f di id d i i b h Payments of dividend are uncertain in both magnitude and timing (contrary to bond) Available cash on hand Terms of relevant debt contract Investment opportunity Stock Valuation 3
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