--%>

How you can predict future evolution of value of shares

Could we suppose that, as we cannot predict the future evolution of the value of shares, a good estimation would be to consider this constant during the next five years?

E

Expert

Verified

Such affirmation is an error. The relation among the value of the shares of various years is: Et = Et-1 (1+Ket) – CFact. The shares value is constant (Et = Et-1) only when CFact = Et-1 Ket. It happens in non-growing perpetuities.

   Related Questions in Corporate Finance

  • Q : Understand and interpret financial

    Our purpose this week: learning how to understand and interpret financial statements. Assignment: The class should discuss all of the questions listed below as they rel

  • Q : Price per share for Corporation For XYZ

    For XYZ Corporation debt-to-equity ratio, marginal tax rate, and dividend payout ratio are all of 40%. The cost of debt is 10%. Cambria contains 1 million shares of common stock, and $25 million in long-term bonds. Its dividend is $1 per share. Determine the EBIT and

  • Q : Explain any indisputable model for

    Is there any indisputable model for valuing the brand of a company?

  • Q : Expected return and standard deviation

    If an investor is considered to be risk-averse, what is his/her attitude towards expected return and standard deviation?

  • Q : Explain Value Chain Value Chain : The

    Value Chain: The value chain is a theory from business management that was first described and popularized Michel Porter in his 1985 best seller, Competitive Advantage: Creating and Sustaining Superior Performance.

  • Q : Zurich Pvt Ltd. You have joined Zurich

    You have joined Zurich Pvt. Ltd as a Finance manager. You are given the following information: Zurich Pvt Ltd. is a diversified manufacturing firm dealing with electrical appliances. In 2012, the firm reported an operating income of Rs. 857.60 million and faced a tax rate of 35% on income. The firm

  • Q : Explain accurately value bond options

    If the model could not even find bond prices right, how could this hope to accurately value bond options?

  • Q : WCR lower cost of storage Inventory is

    Inventory is an important part of WCR estimation. It is a current asset, which depletes over period of time. Also, it requires creation of facility, which would help in storing the inventory and estimate the associated cost of maintaining and transporting it. The esti

  • Q : Finance I need the answers for the

    I need the answers for the midterm exam for FIN6000

  • Q : Explain modern quantitative

    Explain modern quantitative methodology for portfolio selection.