Preview below: Stock Valuation Exam Training in 21 min.
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4 responses to “Preview below: Stock Valuation Exam Training in 21 min.”
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where i can get the full list of premium videos?
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Hello Ali, just go the tutorial page and then look at the “All You Can Eat” videos in the thing that looks like a buffet menu. Cheers!
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Hi David, I am currently at Cass Business School in London, and one of the modules ‘Principles of Finance’ covers this topic. I am struggling with one issue when calculating the Stock Value. In your example, The firm will pay a dividend of $2 one year from today. The Dividend is expected to grow at 12% for the first 3 years. Why then in the first year do you not multiply 2(1.12) / 1.11 and instead have 2/1.11? So, I am effectively unsure, when the ‘growth of 12%’ starts.
Your videos have been a life saver by the way.
Best, Stephen-
Hi Stephen, interesting point. Actually, it depends on how the story is told on your exam or by your professor. You’re correct in the sense that if the dividend given at the end of *this* year already reflects the growth, then you would already use 2(1.12)/1.11 instead of 1/1.11. On the other hand, if the growth is applied at the end of next year, then you would use my formula. It boils down to how the story is told and/or the *assumptions* of your professor.
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