What’s a Stock Worth?

In a world where investors are inundated with advertisements for the latest and best ways to value stocks, it is easy to see why so many are overwhelmed by the choice in models and confused about their merits. It is worth noting, in the midst of all the hype, that valuation today is fundamentally not that different from valuation 20 or even 50 years ago. We might have more data to work with and more powerful computers to help build our models, but there remain two basic approaches to valuation.

Editor’s Note: this link is a .pdf of the entire Fall 1998 STERNbusiness magazine – find this article on page 20; you might also find the articles “Currency: A Short History” on page 18 and “The Dark Side of Executive Stock Options” on page 25 interesting.

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