FMI Lec7 Stock Valuation

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8 Terms

1
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one period valuation model

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2
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Gordon Growth model

g must be positive

<p>g must be positive</p>
3
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find D1 using D0 and g

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4
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If firm issues no dividends, why is price not 0

dividends are reinvested and reflected in future dividends or in share price

5
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Price Earnings Ratio

how much Investors are willing to pay for 1 USD of firm earnings

6
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Find Price using Price/Earnings

P = P/e * EPS

7
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high P/E means market expects ____ or _____

high return on low risk

8
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___ manages the stock market US

SEC