Beruflich Dokumente
Kultur Dokumente
Valuing Stocks
Slides by
Matthew Will
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 2
Topics Covered
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 4
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 5
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 6
Div1 P1 P0
Expected Return r
P0
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 7
Div1 P1 P0
Expected Return r
P0 P0
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 8
80
Value per share, dollars
70
60
50
40
PV (Terminal Value)
30 PV (Dividends)
20
10
0
1 2 3 10 20 30 50 100
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 9
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 10
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 11
PV $75.00
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 12
Div1 EPS1
Perpetuity P0 or
r r
Assumes all earnings are
paid to shareholders.
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 13
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 14
Div1 $3.00
P0 $75.00
r g .12 .08
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 15
$3.00 Answer
$100
.12 g The market is
assuming the dividend
g .09 will grow at 9% per
year, indefinitely.
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 16
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 17
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 18
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 19
5 g .20.40 .08
P0 $41.67
.12
3
P0 $75.00
.12 .08
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 20
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 21
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 22
No Free Lunches
Technical Analysts
Forecast stock prices based on the watching the
fluctuations in historical prices (thus “wiggle
watchers”)
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 23
No Free Lunches
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 24
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 25
$100.43
Tails
$100.00
Heads
$100.43
$97.50
Tails
$95.06
Tails
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 26
180
Level
130
80
Month
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 27
180
130
80
Month
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 28
1,200
1,100
Cycles
disappear
once Last This Next
identified Month Month Month
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 29
Another Tool
Fundamental Analysts
Research the value of stocks using NPV and other
measurements of cash flow
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 30
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 31
34
29
24
19
(%)
14
9
4
-1
-6
-11
-16
Days Relative to annoncement date
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 32
Behavioral Finance
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
6- 33
Web Resources
Click to access web sites
Internet connection required
www.ganesha.org/invest/index.html
www.nasdaq.com
www.nyse.com
http://123world.com/stockexchanges
www.fool.com/school/howtovaluestocks.htm?ref=LN
www.zacks.com/tour/index.php3
www.morningstar.net
Irwin/McGraw Hill Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved