Archive for November, 2007
Required Rate of Return
Now that we know a few methods of estimating future growth, we will round out the analysis necessary for application in the discounted dividend model with a brief look at the Capital Asset Pricing Model which is often used for estimating required rate of return.
Obviously, when using the discounted dividend approach to valuation, you could [...]
Estimating Growth
The previous post introduced several discounted dividend models for valuing stocks. These models ask for an estimate of growth and required rate of return in order to work. While all estimates require some amount of “guessing” there are some methods which will help you to get more accurate results. Here, we deal with methods of [...]
read more »Dividend Based Stock Valuation
After the last few posts trying to connect the source of stock “value” to dividends, it would only make sense that one could value individual stocks through their dividends (or anticipated dividends). And you can!
The method is actually very simple. The value of a stock, or anything else for that matter, ought to be [...]
Wikinvest.com
It’s been a while since I’ve done a “Weekend Diversion” post. Haven’t had any great ideas for fun post series to do on the weekends. And, well, I just like to take a break on weekends sometimes. Sorry!
But, I came across a terrific site today and the timing is great as its the weekend. So, [...]
Share Buybacks or Dividends?
In the post on the underlying value in stocks, we discussed that stocks derive their inherent worth from the potential for the return of company earnings to the shareholder. When management does decide to return cash to shareholders they can do so in two ways – take retained earnings and buy shares back from shareholder [...]
read more »Returning Value to Shareholders
This blog has swung decidedly more technical in recent weeks and I think its about time to bring back a little focus on fundamentals.
Let me pose this simple question, “why are stocks valuable?” I would venture to guess that most people would answer one of three ways. 1.) I don’t know. 2.) Supply and demand. [...]
