BUS-F 420 Lecture Notes - Stock Valuation, Profit Margin, Dividend Payout Ratio

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25 Mar 2023
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Wacc: present value = todays value, forecasted sales and profits valuation , use same past growth rate (na ve approach, no future/change, use adjusted growth rate (future conditions accounted) Forecasted sales = (adjusted sales growth rate * last yr. Example: assume sales (2017) = , assume sales growth = 22% (1938 * 0. 22) + 1938 = . Forecasted earnings (net profit) = forecasted sales * net profit margin. Net profit margin ratio = net profit / sales. Example: sales (2017) = , sales growth (22%), np = 193. 8. Stocks (p/e) / market multiple = relative multiple. Example: if a stock has a p/e ratio of 35, and market multiple is 25, find relative p/e. Relative p/e = 35 / 25 = 1. 4: higher the relative p/e multiple the higher price + volatility, estimated earnings per share: Eps year t = est. future earnings / common shares outstanding. Eps = roe * book value per share: estimated dividends per share:

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