# Posts Tagged ‘valuation’

## 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## What Is Stock Valuation?

Stock valuation is the process of determining the current (or projected) worth of a stock at a given time period. There are 2 main ways to value stocks: absolute and relative valuation.

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