Posts Tagged ‘valuation’
What is the Agency Problem?
Within corporate finance, the agency problem is considered as the conflict of interest between the company’s managers and its stockholders.Read Full Post
What Is Arbitrage Pricing Theory?
The Arbitrage Pricing Theory is a method used to estimate the returns on assets and portfolios. It is a model based on the linear relationship between an asset’s expected risk and return.Read Full Post
What is the Modigliani–Miller Theorem?
The Modigliani-Miller Theorem suggests that a company’s capital structure and the average cost of capital does not have an impact on its overall value.Read Full Post
What is the Gordon Growth Model?
The Gordon growth model, or GGM, is used to calculate the intrinsic value of a stock from future dividends. The model only works for companies that pay out dividends, which have a constant growth rate.Read Full Post
What is Modern Portfolio Theory and Portfolio Risk?
Modern Portfolio Theory is a theory presented in 1952 by Harry Markowitz on how risk-averse investors can create portfolios to maximize the return on investments based on the optimal levels of risk.Read Full Post