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    Share valuation is a technique used to determine a company's actual worth using quantitative analysis of its financial information such as earnings, cash flows, assets, capital structure, and future cash flows. There are different share valuation methods including the dividend-based, zero-growth, and constant-growth models which make assumptions about future dividend payments. Stock valuation aims to predict future stock prices to help investors time their purchases and sales and determine a stock's intrinsic value based on the company's profitability and potential future market value.

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    Valuation

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    Share valuation is a technique used to determine a company's actual worth using quantitative analysis of its financial information such as earnings, cash flows, assets, capital structure, and future cash flows. There are different share valuation methods including the dividend-based, zero-growth, and constant-growth models which make assumptions about future dividend payments. Stock valuation aims to predict future stock prices to help investors time their purchases and sales and determine a stock's intrinsic value based on the company's profitability and potential future market value.

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    Uploaded by

    Anne Desal
    Share valuation is a technique used to determine a company's actual worth using quantitative analysis of its financial information such as earnings, cash flows, assets, capital structure, and future cash flows. There are different share valuation methods including the dividend-based, zero-growth, and constant-growth models which make assumptions about future dividend payments. Stock valuation aims to predict future stock prices to help investors time their purchases and sales and determine a stock's intrinsic value based on the company's profitability and potential future market value.

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    Share valuation is a technique of determining the actual worth of a company using

    quantitative techniques. Analysts use the company's financial information, such as current
    earnings and cashflows, assets, capital structure, and future cashflows, to determine the
    company's current value.

    The different share valuation method includes the dividend-based valuation, Zero-growth
    model – This assumes that dividend will not change in the future and is used for valuing
    preference shares. Next is constant-growth model – Most popular approach in dividend-based
    share valuation which assumes that dividends will increase at a constant rate indefinitely but
    always lower than the required rate of return. Finally, the variable growth model – This model
    assumes that dividend may growth at varying rates and may go up or down depending on
    business and economic conditions. In order to capture the variations in growth in the valuation,
    these four steps should be considered.

    The reason for stock valuation is to predict the future price or potential market prices for
    the investors to time their sales or purchase of investments. The stock valuation fundamentals
    aim to value the intrinsic value of the stock that shows the profitability of the business and its
    future market value.

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