barcode in vb.net source code How to Value a Stock in Software

Generating Data Matrix ECC200 in Software How to Value a Stock

How to Value a Stock
Recognizing Data Matrix In None
Using Barcode Control SDK for Software Control to generate, create, read, scan barcode image in Software applications.
Data Matrix Generation In None
Using Barcode generator for Software Control to generate, create Data Matrix ECC200 image in Software applications.
than one-half. Market capitalization is defined as the market value of debt, preferred stock, and common stock outstanding. Since Microsoft had no debt or preferred stock outstanding, its market capitalization was equal to the number of common shares outstanding times the stock price per share. Microsoft s market cap (on August 12, 2002) was as follows: Common Shares Outstanding * Stock Price 5415 million * $45.15 Market Capitalization $244.5 billion
Data Matrix Recognizer In None
Using Barcode scanner for Software Control to read, scan read, scan image in Software applications.
Draw Data Matrix 2d Barcode In C#.NET
Using Barcode creator for .NET framework Control to generate, create Data Matrix ECC200 image in Visual Studio .NET applications.
The cost of common stock for Microsoft is a function of the level of interest rates (the 10-year U.S. Treasury), the risk of Microsoft relative to the overall stock market (its beta), and the equity risk premium. While we will not go into particulars for Microsoft in this example, we used a WACC of 10 percent.
Data Matrix ECC200 Creator In .NET Framework
Using Barcode creation for ASP.NET Control to generate, create ECC200 image in ASP.NET applications.
Painting DataMatrix In VS .NET
Using Barcode maker for .NET Control to generate, create Data Matrix image in Visual Studio .NET applications.
Step 3: Calculate Microsoft s Total Corporate Value
Data Matrix 2d Barcode Printer In VB.NET
Using Barcode encoder for Visual Studio .NET Control to generate, create Data Matrix image in Visual Studio .NET applications.
EAN 13 Printer In None
Using Barcode generation for Software Control to generate, create EAN 13 image in Software applications.
Step 3 discounts the expected cash flow by the required rate of return. In the DCF approach, the required rate of return is the firm s WACC. Recall the mortgage example from 3. The concept is the same. Step 3 involves two stages: (1) calculating the discounted value of the expected cash flows over the 10-year excess return period, and (2) calculating the value of Microsoft beyond this 10-year period its residual value. Exhibit 4-5 gives the discounted expected cash flows for 2003 2012 for Microsoft. The sum of the discounted cash flows over the 10-year excess return period is $85,552 million. Exhibit 4-4 shows the total corporate value calculation. We start with the sum of the discounted free cash flows ($85,552 million) and add the present value of the expected cash flows beyond the end of the excess return period (year 2012). Residual value equals net operating profit after tax (NOPAT) divided by the WACC. The residual value for Microsoft is [$23,002 million/(.10)] $230,023 million. Since this is the value at a point in time 10 years from today, we discount it at the 10-year discount factor of 0.3855 to get its present value of $88,684 million. To calculate the enterprise value of the corporation, we sum the discounted free cash flow over the 10-year excess return period ($85,552 million), the discounted residual value ($88,684 million), and
UPC A Generation In None
Using Barcode creator for Software Control to generate, create UPC-A Supplement 5 image in Software applications.
Paint Data Matrix In None
Using Barcode creator for Software Control to generate, create DataMatrix image in Software applications.
STREETSMART GUIDE TO VALUING A STOCK
Making UCC - 12 In None
Using Barcode drawer for Software Control to generate, create UCC-128 image in Software applications.
Barcode Generation In None
Using Barcode creation for Software Control to generate, create bar code image in Software applications.
EXHIBIT 4-5
Encode USPS Confirm Service Barcode In None
Using Barcode maker for Software Control to generate, create USPS Confirm Service Barcode image in Software applications.
Data Matrix ECC200 Drawer In .NET Framework
Using Barcode printer for VS .NET Control to generate, create ECC200 image in Visual Studio .NET applications.
Microsoft Discounted Free Cash Flow
Draw Code 128 Code Set C In .NET
Using Barcode maker for .NET Control to generate, create Code128 image in .NET framework applications.
Data Matrix Creator In None
Using Barcode printer for Font Control to generate, create Data Matrix image in Font applications.
the short-term assets ($47,827 million) associated with the firm s balance sheet, and come up with a value of $222,062 million for Microsoft.
1D Creator In VS .NET
Using Barcode printer for ASP.NET Control to generate, create Linear 1D Barcode image in ASP.NET applications.
Decoding Bar Code In VS .NET
Using Barcode scanner for VS .NET Control to read, scan read, scan image in .NET applications.
Step 4: Calculate Microsoft s Intrinsic Stock Value
Scanning Data Matrix ECC200 In Visual C#
Using Barcode recognizer for .NET framework Control to read, scan read, scan image in .NET applications.
Data Matrix 2d Barcode Reader In VB.NET
Using Barcode recognizer for Visual Studio .NET Control to read, scan read, scan image in .NET framework applications.
The final step involves computing the total value to common equity by subtracting the market value of the firm s liabilities and dividing that amount by shares outstanding. Microsoft has no debt or preferred stock outstanding, and its total short-term liabilities are $11,640 million. Exhibit 4-4 shows the total value to common equity calculation. The estimated market value of Microsoft s common stock is $210,422 million. Dividing this figure by the number of shares outstanding (5415 billion shares) on August 12, 2002 gives an estimated stock value per share of $38.86. Notice that the $38.86 intrinsic value was about 16 percent less than the closing price on August 12th of $45.15. We would have sold Microsoft if we owned it, or at least refrained from purchasing it until the price declined to a lower level. And we hadn t adjusted the intrinsic stock value for the dilution associated with stock options an adjustment that would have resulted in a further decrease in the value of Microsoft. We discuss the subject of stock options in 6.
How to Value a Stock
Valuation Growth versus Value, Large Cap versus Small Cap
Often we read about mutual funds and investment managers specializing in value stocks or growth stocks or large cap stocks or small cap stocks. How should the classification of a stock into one of these categories affect its value Growth stocks are stocks that are expected to have high revenue or earnings growth rates, usually 15 percent and above, over the foreseeable future. Growth stocks are characterized by high price to earnings (P/E) ratios and low book value to market value of equity (BE/ME) ratios. Growth stocks usually are the hot stocks in the current fad or go-go sectors of the stock market. Most recently, the growth sectors were high-tech industries like telecommunications, computers, pharmaceuticals, and information technology. Value stocks are stocks that are expected to have low revenue or earnings growth rates, and are stocks of companies in mature businesses such as utilities, banks and brokerage, manufacturing, and the automobile industries. Low P/E and high BE/ME ratios characterize these stocks. Value stocks are associated with companies in sectors of the stock market that are out of favor with investors, or in boring industries that don t have a compelling story that attracts the attention of TV business reporters. Large cap stocks are stocks that have market capitalization of equity in excess of $5 billion. Mid cap stocks have market equity of $1 to $5 billion and small cap stocks have market capitalizations that generally are less than $1 billion. Depending upon the cycle of the moon and recent successes or failures in fund management, different investing approaches either come into or go out of favor. Investors concentrating in large caps performed well during the 1997 1999 stock market climb with gains in the S&P 500 of 31 percent, 26.7 percent, and 19.5 percent, before reversing course to 10.1 percent in 2000, 13 percent in 2001, and 23.4 percent in 2002. According to Siegel, small cap stock returns exploded during the period between 1975 and 1983, when the compound annual return of small cap stocks averaged 35.3 percent.3 Recently, small caps have not done nearly as well. Different investment styles, such as value versus growth, hot sector mutual funds, and large cap
Copyright © OnBarcode.com . All rights reserved.