BEC Unit 2 Module 6 Flashcards
1
Q
Price-Sales Ratio Projection
A
Can provide meaningful information in the event that limited data is available.
Formula: Stock Price today / Expected sales at end of year
2
Q
Constant Growth Model
A
Stock price will grow at the same rate as the dividend
3
Q
Zero Growth Model
A
Dividend / Return
4
Q
P/E
A
Measures amount investors are willing to pay for each dollar of earnings per share.
Higher P/E ratios indicate that investors are anticipating more growth and are bidding up the price of the shares in advance of the performance
Stock Price today / EPS in one year
5
Q
PEG
A
(Stock Price Today / EPS for past year) / (G x 100)
