What is the right price for a stock? Is it book value, liquidation value or is it simply its market price at a given moment of time?
Would you value a privately-owned company where there is no market value different than a publicly owned company where there is a market price every day?
Is there a difference between "price" and "value." How would you define these terms?© BrainMass Inc. brainmass.com October 17, 2018, 11:50 am ad1c9bdddf
The right price for a stock is the price that someone or some entity will pay. It really is a difficult question to answer in a broad sense without selecting a specific stock or company. Book values are calculated based on a company's balance sheets. Liquidation values are what a firm would be worth if all assets were quickly liquidated to cash and debts settled. What's left is your liquidation value. Due to certain practices involved with GAAP accounting, liquidation values are not always what's recorded on a balance sheet for example the value of a factory will initially ...
Considerations when determining the right price for a stock and associated value including differences between publicly traded companies and privately-owned firms.
Difference between operating and financial leverages
Discuss the difference between operating and financial leverage. Can there be too much financial leverage in a firm? Why or why not?
Which portion of the WACC calculation is impacted by taxes? How can a company reduce its cost of capital? How is WACC used in financial planning to optimize capital structure?View Full Posting Details