Intrinsic Value of a Stock: What It Is and Formulas to Calculate It
Relative valuation compares a stock’s valuation metrics to those of similar companies or industry averages. This method includes various ratios such as price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), and the dividend discount model (DDM). These ratios help assess whether a stock is undervalued or overvalued relative to its peers or historical averages. Using DCF Analysis, …
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