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Fundamentals of Corporate Finance, 4/c/e

Fundamentals of Corporate Finance, 4/e

Stephen A. Ross, Massachusetts Institute of Technology
Randolph W. Westerfield, University of Southern California
Bradford D. Jordan, University of Kentucky
Gordon S. Roberts, York University

Stock Valuation

Learning Objectives

After studying this chapter in the textbook, you should be able to:

Describe the main features of the zero growth, constant growth and non-constant growth stock valuation models.

Estimate the value of a share of common stock based on these models.

List and be able to compute the components of the required return for a share of common stock.

Explain why some companies have different classes of common stock.

Explain the difference between cumulative and non-cumulative preferred shares.

Compute the price earnings ratio for a common stock.

Define the PEG ratio and be able to compute its value for a given stock.

(Appendix 8A) Explain the difference between cumulative voting and straight voting.

2002 McGraw-Hill Higher Education
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