Common Stock Valuation

Value of Common Stock (Po) Po = PV(First 6-Year's Dividends) + PV(P6) = 10.034 + 12.904 = 22.94. Example using the two period growth formulae: ... P/E ratio is the strength with which investors value earnings as expressed in stock price. Divide the current market price of the stock by the latest 12-month earnings. Price paid for each $1of earnings. ................
................