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Stock Valuation

How would valuation be described to a stockholder? and
What are the factors which makes it more or less predictable?

Solution Preview

Stock valuation is an attempt to determine the fair market value of stocks using forecasted data like future dividends, future growth rates, etc.


It is impossible to predict fair market value of a stock and state with authority that the value you find is going to be accurate at the future date. For example, if I estimate that the FMV of a stock is $23.13 for next month, there is no ...

Solution Summary

The solution explains valuation and the two major factors that make stock valuation unpredictable.