ABF 305 INVESTMNET MANAGEMENT
What is stock
• The capital stock (or just stock) of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors. Stock is different from the property and the assets of a business which may fluctuate in quantity and value.
Intrinsic value • Intrinsic value is defined as the present value of all cash payment to the investor in the stock, including dividends as well as the proceeds from the ultimate sale of the stock.
Dividend Discount Model
Capital Asset Pricing Model (CAPM)
Security market line
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