Lecture 7 Flashcards
1
Q
Price and expected return
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2
Q
Equation for the initial stock price P0:
A
3
Q
The dividend yield of a stock is
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4
Q
Dividend yield
A
A financial ratio that indicates how much a company pays out in dividends each year relative to its share price. Dividend yield is represented as a percentage and can be calculated by dividing the dollar value of dividends paid in a given year per share of stock held by the dollar value of one share of stock.
5
Q
Earnings per share ratio
A
6
Q
General valuation formula for stocks:
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7
Q
Constant growth valuation formula.
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8
Q
Dividend growth in year t is
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9
Q
Expected return estimate
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10
Q
Tools for Valuation Analysis
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11
Q
Present Value of Growth Opportunities
A
