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Flashcards in Valuing a Company Deck (8):
1

What determines the investor's rate of return in a stock?

Purchase Price, Dividends and Selling Price

2

Price of the stock today....

is the function of the sum of the dividends that the stock will pay in the future

3

What's the main driving force that determines company's dividends?

Cash Flow Generation

4

What is a cash flow..

the money that the company makes

5

Operating Cash Flow =

Revenue - Cost - Investments

6

What are the two value that drive firm's value

future Growth and Profitability

7

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

8

What's CAPM?

Capital Asset Pricing Model - to calculate the cost of equity