I got as far as the P/E ratio but now I'm stuck with how to get the actual stock value if no dividends are paid.
I also know that the ROE is going to be my required rate of return for the same reason. I just am not able to generate an actual stock value like I would be able to using the dividend growth model. Am I missing something here?
2006-12-06 10:22:02 · 2 answers · asked by In 2 Deep 3 in Education & Reference ➔ Other - Education
Even if the company doesn't pay dividends the value of the stock may be going up (or down). I have Pepsi stock, and it has been paying dividends, but the value of the stock has gone from about 50 to about 65 in the past few years.
2006-12-06 10:31:42 · answer #1 · answered by Nelson_DeVon 7 · 0⤊ 0⤋
PE is typically the most used way. Now the S&P is trading around 17 times earnings which is a bit higher than average. The economy is weakening, corporate profits are no longer growing as fast, and the yield curve is still inverted which leads me to believe we have softer economic times ahead of us, and our stock market PE doesn't accuratly reflect that. Corporate balance sheets, interest rates, and all economic factors should also be looked at when judging whether or not the market is under/over valued.
2016-05-23 01:58:09 · answer #2 · answered by Sandra 4 · 0⤊ 0⤋