Business Finance Ch 7
forward PE ratio
A PE ratio that is based on estimated future earnings
comparison of other companies or the company's own history
A benchmark PE ratio can be determined using _____
decreases
All else constant, the dividend yield will increase if the stock price ____________.
cumulative
If unpaid preferred dividends must be "caught up" before any common dividends can be paid, they are called _____ dividends.
a physical location and a face-to-face auction market
The NYSE differs from NASDAQ primarily because NYSE has:
growth rate
The ______ can be interpreted as the capital gains yield.
order flow
The fundamental business of the NYSE is to attract _____
target price
Using a benchmark PE ratio against current earnings yields a forecasted price called a ________
stock has no set maturity, dividends are unknown and uncertain, and the required rate of return is unobservable
What are reasons that valuing stock is more difficult than valuing bonds?
discount rate and dividend
What info is needed in order to determine the value of a stock using a zero growth model?
dividend yield and growth rate
In the dividend discount model, the expected return for investors comes from which two sources?
