Flashcards in Valuing a Company Deck (8):
What determines the investor's rate of return in a stock?
Purchase Price, Dividends and Selling Price
Price of the stock today....
is the function of the sum of the dividends that the stock will pay in the future
What's the main driving force that determines company's dividends?
Cash Flow Generation
What is a cash flow..
the money that the company makes
Operating Cash Flow =
Revenue - Cost - Investments
What are the two value that drive firm's value
future Growth and Profitability
What's time value of money
A dollar today is worth more than the dollar tomorrow. Money you hold now is worth more, because you can invest it and earn interest and returns