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Financial statement analysis Discussion 5

Financial statement analysis Discussion 5

Q Use the Internet and the e-library to answer the following: 1. Stock valuation traditional methods are based on prediction of a firm’s cash flow, dividends, or earnings. If management cannot predict a firm’s performance, discuss how the stock price should be valued. 2. Do you think the IPO’s stock pricing methodology should be different than pricing a stock that is already traded in the market? 3. Do you think that other factors should be considered for the IPO’s stock pricing beside the traditional valuation models, if so, what are these factors?

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Determination of true worth of a stock is a vital value investing part. The common ways for stock valuation are mentioned below: Peer comparisons: Using ratios is among the methods used most frequently for finding valuation of a company. Some common ratios consist of a price book, price-sales, and price-earnings. Several more ratios are there which can be used by investors to assign an accurate price for