This website uses cookies to ensure you have the best experience. Learn more

Stock Valuation Essay

512 words - 3 pages

Stock valuation
Secondary markets are markets where investors purchase securities from other investors, rather than from issuing companies themselves. Secondary markets are important because they enable investors to convert securities easily to cash. In the United States, most secondary market transactions are accomplished on one of the numerous stock exchanges the NYSE or NASDAQ.
1. NYSE: is the oldest, largest, and best-known stock exchange market in the United States, which was founded in 1792. It is located on Wall Street New York city and lists over 2500 companies.

2. NASDAQ: was created in 1971 and is the world's first electronic stock market. NASDAQ is a computerized system that facilitates trading of stock and provides quotes for Over-the-Counter (OTC) stocks not listed on ...view middle of the document...

Because the entire cost of finding and bargaining with potential and desired trading partner is paid by just one party, there is only a small incentive to search among all possible partners in the market to find the best possible price. In fact, in direct search buyers and sellers, especially of securities but also of other goods and services, seek each other and perform trades without brokers or other financial institutions mediating.

2. Broker: as the trading of a specific stock becomes sufficiently heavy, brokers begin to offer specialized search services to market participants. They attempt to bring the buyers and seller together for a fee which is known as commission. Brokers assist their clients to find compatible trading partners and negotiate acceptable transaction prices for them. Since brokers are continuously in contact with many market participants they are likely to be aware of fair price for a specified transaction. Stock brokers can better arrange transactions that are closer to the best available price than is possible in a direct search market.

3. Dealer: They buy stocks keep it for a while and sell them at their own desired prices. Dealer markets remove the need for time consuming market searches for trading partners, because investors know they can buy or sell immediately at the quotes given by a dealer. The dealer should bear the risk that their stock prices may decline while they hold them to sell for higher price.

4. Auction: an auction market is a place where anyone with intention to buy and sell can go to. Auction markets have a fixed location where buyers and sellers can meet up each other directly and bargain over the transaction price. This is important since auction markets virtually eliminate the cost of seeking compatible partners and negotiating for a favorable price.

References:
Wikipedia.org
Investopedia.com

Other Papers Like Stock Valuation

Invest Walmart Essay

1716 words - 7 pages Running head: THE VALUATION OF WAL-MART 1 THE VALUATION OF WAL-MART 2 In fiscal year 2010, Wal-Mart stock sold for a 52-week high of $55.01 and a 52-week low of $46.42. Stock in the company was regularly recommended as a “buy” or a “hold” by analysts, according to Bloomberg L. P. However, with dividend payment of only $1.09 per share on earnings of $3.72, a payout of only 29%, far lower than the industry payout rate at

Forensic Accounting Certifications Essay

940 words - 4 pages The Certification that I chose to research was one that I knew nothing about, Certified Valuation Analyst. A Certified Valuation Analyst accreditation is a statement that an individual has attained a level of knowledge in business valuations. Once this level is reached, and the National Association of Certified Valuation Analysts (NACVA) considers this level worthy of recognition, one is then awarded the designation of Certified Valuation

Reporting of Intangibles by Service Sector in India

1240 words - 5 pages Decrease in cost of capital Increase in intrinsic value Reduction in volatility of stock prices Approaches in Valuation of Intangibles Text copied from International Valuation Standards Council Guidance Note 4 Analysis of the nature and attributes of the each intangible is critical for determining the appropriate valuation approach. More than one approach can be considered and within an approach there could be different methods. All

Tse International

1277 words - 6 pages TSE International had been negotiating terms to acquire Yeats Valves and Controls Inc. In order for the acquisition to take place, TSE must perform an accurate valuation of the stock of TSE and YVC. Once the value of the stock is determined, a proper exchange ratio can be determined and an offer can be presented. Before we can utilize a valuation model we must first determine the cost of equity and the growth rate for each company. Cost of

Fi515 Build a Model 13-11

1672 words - 7 pages 168.0 58.0 $249.0 168.0 84.0 $24.0 176.0 61.0 $261.0 176.0 88.0 Michael C. Ehrhardt Page 1 12/13/2011 Ch13 Tool Kit.xlsx Corporate Valuation Common Stock (par plus paid in capital) Retained earnings Common equity Total liabilities and equity $200.0 45.0 $245.0 $614.0 $200.0 80.0 $280.0 $700.0 $200.0 96.0 $296.0 $773.0 $200.0 111.0 $311.0 $812.0 $200.0 127.0 $327.0 $852.0 Figure 13-1. Calculating

Pfizer (Pfe) Financial Analysis

1838 words - 8 pages Reports |   |   |   | | | | | Source: www.stock-analysis-on.net | | | | Copyright © 2015 Stock Analysis on Net | | | | 1. Pfizer Inc. (PFE) | Financial Analysis and Stock Valuation. (2014). Retrieved June 13, 2015, from http://www.stock-analysis-on.net/NYSE/Company/Pfizer-Inc 2. Appendix A 2014 Financial Report. (2014, December 31). Retrieved June 4, 2015, from http://www.pfizer.com/system/files/presentation

Inventory System

716 words - 3 pages (ICVS) meets all the requirements for efficient management of inventories and materials procurement function Of small to large scale organizations. ICVS caters to all activities involved in the flow of materials Right from materials requirement determination, generating purchase orders to issue and receipt Of goods. The outcome is reliable maintenance of real-time records for item-wise, location-wise Stock count and its valuation. Issues in

Hris Application

918 words - 4 pages 1. Problems (page 297) Question: (7-2): Constant Growth Valuation Boehm Incorporated is expected to pay a $1.50 per share dividend at the end of this year (i.e., D1 = $1.50). The dividend is expected to grow at a constant rate of 7% a year. The required rate of return on the stock, rs, is 15%. What is the value per share of Boehm’s stock? Answer: Value per share of Boehm’s stock = $1.50 (0.15 - 0.07) Value per share of Boehm’s stock

Case Study: Shenzhen Development Bank

638 words - 3 pages Shenzhen Stock Exchange and thereby their financial position was available to the public. It is possible to get a reliable number by doing a reasonable projection on its future cash flow based on the disclosed data. Also, according to the Figure 1, we think the multiplier of 1.5-1.6 times is appropriate in calculating the deal price. So the appropriate valuation range is US$0.140-0.149bn (US$5.21bn×1.5×17.89%=US$0.140bn; US$5.21bn×1.6×17.89%=US$0.149bn).

Website Search

837 words - 4 pages stock split reduces the number of outstanding shares and increases its earnings per share. A company is usually in financial trouble when there stock is reverse split. (Fraser & Ormiston, pp. 103-104, 2007). The action that a company takes can have an effect on the stock share price in the market. Earnings per share (EPS) are important in calculating the price-to-earnings valuation ratio and determining the share's price. The EPS is

Dcf Discounted Cash Flow Valuation: Basics Aswath Damodaran

1546 words - 7 pages Equity n The dividend discount model is a specialized case of equity valuation, and the value of a stock is the present value of expected future dividends. Aswath Damodaran 4 II. Firm Valuation n The value of the firm is obtained by discounting expected cashflows to the firm, i.e., the residual cashflows after meeting all operating expenses and taxes, but prior to debt payments, at the weighted average cost of capital, which is the

Related Essays

Stock Valuation Essay

3047 words - 13 pages Chapter 7 Stock Valuation Solution to Problems P7-1. LG 2: Authorized and Available Shares Basic Maximum shares available for sale Authorized shares 2,000,000 Less: Shares outstanding 1,400,000 Available shares 600,000 $48,000,000 = 800,000 shares (b) Total shares needed = $60 The firm requires an additional 200,000 authorized shares to raise the necessary funds at $60 per share. (c) Aspin must amend its corporate charter to authorize the

Stock Valuation On Pepsi Essay

2508 words - 11 pages their intrinsic values comparative to their up to date market prices, from their valuation multiples and to conclude with the rate the investment prospective of every stock. In this research paper, I as an investment analyst will inspect Pepsi company’s analyst predilections across stocks, and estimate the sources of the investment worth presented by analyst stock recommendations and its changes for the particular company. II. What is Stock

Adm Stock Valuation Essay

3359 words - 14 pages Name: Instructor: Subject: Date: Corporate valuation: Archer-Daniels-Midland Company ADM (Archer-Daniels-Midland) company is one of the world’s largest food processing firms operating over 270 plants worldwide and operating in over 75 countries. Headquartered in Decatur, Illinois, the company is listed on the New York stock exchange main board and is a part of the S&P 500 index. The company is one of the most admired in the US and

Chapter 5 (Basic Stock Valuation) Essay

667 words - 3 pages Chapter 5 (Basic Stock Valuation): Problems (Page 182-183): #1, #2, #4, #6, #8, #9 #11, #12, and #13. 5-1 ∵ Last dividend (D0) $1.50 First 3 year growth rate 5% Long-run growth rate 10% ∴ g = 5% g = 10% Year 0 1 2 3 4 5 Dividend $1.50 $1.50(1.05) $1.50(1.05)2 $1.50(1.05)3 $1.74(1.1) $1.91(1.1) $1.50 $1.58 $1.65 $1.74 $1.91 $2.11 5-2 (Hint: Find the intrinsic value of the common stock if the dividends are expected to grow