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  2. Cost of capital - Wikipedia

    en.wikipedia.org/wiki/Cost_of_capital

    Sustainable finance. v. t. e. In economics and accounting, the cost of capital is the cost of a company's funds (both debt and equity), or from an investor's point of view is "the required rate of return on a portfolio company's existing securities". [1] It is used to evaluate new projects of a company.

  3. Present value of growth opportunities - Wikipedia

    en.wikipedia.org/wiki/Present_value_of_growth...

    PVGO = share price − earnings per share ÷ cost of capital. This formula arises by thinking of the value of a company as inhering two components: (i) the present value of existing earnings, i.e. the company continuing as if under a "no-growth policy"; and (ii) the present value of the company's growth opportunities.

  4. Price–earnings ratio - Wikipedia

    en.wikipedia.org/wiki/Price–earnings_ratio

    The price–earnings ratio, also known as P/E ratio, P/E, or PER, is the ratio of a company's share (stock) price to the company's earnings per share. The ratio is used for valuing companies and to find out whether they are overvalued or undervalued. As an example, if share A is trading at $24 and the earnings per share for the most recent 12 ...

  5. Dollar cost averaging - Wikipedia

    en.wikipedia.org/wiki/Dollar_cost_averaging

    As a result, DCA can lower the total average cost per share of the investment, giving the investor a lower overall cost for the shares purchased over time. [2] The alternate strategies are to purchase a fixed number of shares each time period, or to save up the funds that are available for investment and attempt to purchase shares at times when ...

  6. Dividend discount model - Wikipedia

    en.wikipedia.org/wiki/Dividend_discount_model

    Dividend discount model. In financial economics, the dividend discount model (DDM) is a method of valuing the price of a company's capital stock or business value based on the assertion that intrinsic value is determined by the sum of future cash flows from dividend payments to shareholders, discounted back to their present value. [1][2] The ...

  7. Price–sales ratio - Wikipedia

    en.wikipedia.org/wiki/Price–sales_ratio

    Price–sales ratio, P/S ratio, or PSR, is a valuation metric for stocks. It is calculated by dividing the company's market capitalization by the revenue in the most recent year; or, equivalently, divide the per-share price by the per-share revenue. The justified P/S ratio is calculated as the price-to-sales ratio based on the Gordon Growth Model.

  8. Earnings per share - Wikipedia

    en.wikipedia.org/wiki/Earnings_per_share

    Dividends in arrears are not relevant when calculating EPS. Basic formula. Earnings per share = ⁠ profit − preferred dividends / weighted average common shares ⁠. Net income formula. Earnings per share = ⁠ net income − preferred dividends / average common shares ⁠. Continuing operations formula. Earnings per share = ⁠ income from ...

  9. Equivalent annual cost - Wikipedia

    en.wikipedia.org/wiki/Equivalent_annual_cost

    Equivalent annual cost. In finance, the equivalent annual cost (EAC) is the cost per year of owning and operating an asset over its entire lifespan. It is calculated by dividing the negative NPV of a project by the "present value of annuity factor": where r is the annual interest rate and. t is the number of years.