stock is overvalued when its expected return is more than investor's required return
both of them are positively correlated, as we can witnessed with 2008 scenario, as FII`s keep pumping the money in Indian stock market our sensex sores to 20000, and with current financial meltdown FII starts withdrawing money which forces the OVERVALUED stock to come to their actual worth price and let sensex to drop to mere 9000
The stock price of a growth stock is only fractionally dependent on the dividend. I assume that you are talking about a growth stock since you ask about the future price of the stock. There are many other factors that are far more influential in the price of a stock than the dividend. Some, but not nearly all, are: 1. The earnings, and expected future earnings, of the company and it's market sector. 2. The market capitalization of the stock. This is the number of shares times the price per share. 3. The earnings-per-share. A stock with an 18X earnings-per-share might be overvalued if the average EPS of its direct competitors was 14X. Conversely, if the EPS of its competitors were 22X as an average, the stock might be undervalued. 4. Quality of Management. Confidence in management is an important factor. 5. Company buy-back. If a company is actively buying back its stock there are fewer shares outstanding which could, over time, help the price to rise. Always remember, the stock market is only an auction house. If there are more buyers wanting to own the stock than there are sellers willing to sell, the movement of the stock price will be higher. And, of course, vice versa.
explain dow theory in investment management.or exolain the dow theory and how it might be used to determine the direction of the Stock Market.dec2008 or dec 2009 or dec 2011
GDP influences nearly everyone in a economy. For example, when the economy is healthy, you will typically see low unemployment and wage increases as businesses demand labor to meet the growing economy. A significant change in GDP, whether up or down, usually has a significant effect on the stock market. It's not hard to understand why: a bad economy usually means lower profits for companies, which in turn means lower stock prices. Investors really worry about negative GDP growth, which is one of the factors economists use to determine whether an economy is in a recession.
Market price per share of common stock is a calculated metric used to determine if the price of a stock is a good buy. The market price per share is calculated by taking the net income of a company and subtracting the preferred dividends and number of common shares outstanding.
This can be calculated through Q ratio and dividend discount model. The divident discount model is not appropriate for the companies who are issuing any dividend. So the Q ratio is Value of the stock= total market value of the stock/ total value of assets If the value is from 0 to 1 then the stock is undervalued but if the value is above 1 then the stock is overvalued. Ahsan Jamil
Fundamental analysis evaluates a stock's intrinsic value by analyzing various factors such as company financials, industry trends, and macroeconomic conditions. It aims to determine if a stock is overvalued or undervalued based on these fundamentals. Investors using fundamental analysis believe that over time, the market will reflect the true value of a stock.
Stock valuation models are tools used to estimate the intrinsic value of a stock based on various factors such as earnings, growth projections, dividends, and risk. Common valuation models include discounted cash flow (DCF), price-to-earnings (P/E) ratio, and price-to-book (P/B) ratio. These models help investors make more informed decisions about whether a stock is overvalued, undervalued, or fairly priced.
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overvalued blow out
what is a broker?
Watered stock is stock that is issued with a price that is much higher than the issuing company's assets. Watered stock can be stock that is overvalued due to excessive issuing or inflated accounting values.
If Opening Stock is undervalued, this will result in your Cost of Sales being understated and therefore Gross and Net Profit being overstated. Of course, since Opening Stock in this period is the last period's Closing Stock, this would mean that Closing Stock in the last period was understated too, meaning that Net Profit in the last period was understated. That doesn't make it OK though!
The Stock Market of the late 1920s was considered to be overvalued in comparison to the actual value of the member companies. The overvaluation lead to a bobble.
The stock market of the late 1920s was considered to be overvalued in comparison to the actual value of the member companies. The overvaluation lead to a bobble.
The stock C (Celeste Copper Corporation) is traded on the stock market. A quote is used to determine the current market value of that stock, to decide whether to buy, sell, or hold.