1. P/E ratio is one of the most commonly used formulas for calculating stock prices. It compares the company's market value (total market share capital multiplied by stock price) with the company's profit (earnings per share). The P/E ratio can be expressed by the following formula:
P/E ratio = share price/earnings per share
The higher the P/E ratio, the higher the market's expectation of future earnings. P/E ratio also has limitations, such as not considering the company's potential growth and risk factors.
2. P/BRatio P/B ratio is another commonly used formula for calculating stock price, which compares the market value of a company with its net assets. The price-to-book ratio can be expressed by the following formula:
P/B ratio = share price/net assets per share
The P/B ratio can be used to evaluate whether the value of a company is undervalued or overvalued. A low P/B ratio may mean that the market underestimates the value of the company, while a high P/B ratio may mean that the market overestimates the value of the company. The P/B ratio also has limitations, such as not considering the future profitability of the company and the emotional factors of the market.
3. DividendYield Dividend yield is an indicator to measure the dividend return of stocks, which compares the dividend per share of the company with the stock price. The dividend yield can be expressed by the following formula:
Dividend rate = dividend per share/share price
The higher dividend yield means that investors can get higher returns through dividends. The dividend yield can help investors to judge whether the dividend return of stocks is attractive, but it cannot consider the growth potential and risks of stocks.
4. discounted cash flow method model discounted cash flow method model is a complicated method to calculate the stock price, which determines the reasonable stock price according to the company's future cash flow. Discounted cash flow model considers the potential growth and risk of the company, and uses discount rate to convert future cash flow into present value. Discounted cash flow method model has high computational complexity, and needs to consider multiple assumptions and variables, but it can provide a more comprehensive and accurate evaluation of stock prices.
The stock price calculation formula is a mathematical formula used to determine a reasonable stock price. P/E ratio, P/B ratio, dividend yield and discounted cash flow method model are common stock price calculation methods, and each method has its advantages and disadvantages. Investors and analysts can choose appropriate calculation methods according to their own needs and risk preferences, and make more informed investment decisions by combining other factors for comprehensive analysis.