##### Document Text Contents

Page 1

Stock valuation

In financial markets, stock valuation is the method of

calculating theoretical values of companies and their

stocks. The main use of these methods is to predict fu-

ture market prices, or more generally, potential market

prices, and thus to profit from price movement – stocks

that are judged undervalued (with respect to their the-

oretical value) are bought, while stocks that are judged

overvalued are sold, in the expectation that undervalued

stocks will, on the whole, rise in value, while overvalued

stocks will, on the whole, fall.

In the view of fundamental analysis, stock valuation based

on fundamentals aims to give an estimate of the intrinsic

value of a stock, based on predictions of the future cash

flows and profitability of the business. Fundamental anal-

ysis may be replaced or augmented by market criteria –

what the market will pay for the stock, without any neces-

sary notion of intrinsic value. These can be combined as

“predictions of future cash flows/profits (fundamental)",

together with “what will the market pay for these prof-

its?" These can be seen as “supply and demand” sides –

what underlies the supply (of stock), and what drives the

(market) demand for stock?

In the view of others, such as John Maynard Keynes,

stock valuation is not a prediction but a convention, which

serves to facilitate investment and ensure that stocks are

liquid, despite being underpinned by an illiquid business

and its illiquid investments, such as factories.

1 Fundamental criteria (fair value)

The most theoretically sound stock valuation method,

called income valuation or the discounted cash flow

(DCF) method, involves discounting of the profits

(dividends, earnings, or cash flows) the stock will bring to

the stockholder in the foreseeable future, and a final value

on disposal.[1] The discounted rate normally includes a

risk premium which is commonly based on the capital

asset pricing model.

In July 2010, a Delaware court ruled on appropriate in-

puts to use in discounted cash flow analysis in a dispute

between shareholders and a company over the proper

fair value of the stock. In this case the shareholders’

model provided value of $139 per share and the com-

pany’s model provided $89 per share. Contested inputs

included the terminal growth rate, the equity risk pre-

mium, and beta.[2]

1.1 Stock valuation methods

Stocks have two types of valuations. One is a value cre-

ated using some type of cash flow, sales or fundamen-

tal earnings analysis. The other value is dictated by how

much an investor is willing to pay for a particular share of

stock and by how much other investors are willing to sell

a stock for (in other words, by supply and demand). Both

of these values change over time as investors change the

way they analyze stocks and as they become more or less

confident in the future of stocks.

The fundamental valuation is the valuation that people

use to justify stock prices. The most common example

of this type of valuation methodology is P/E ratio, which

stands for Price to Earnings Ratio. This form of valua-

tion is based on historic ratios and statistics and aims to

assign value to a stock based on measurable attributes.

This form of valuation is typically what drives long-term

stock prices.

The other way stocks are valued is based on supply and

demand. The more people that want to buy the stock,

the higher its price will be. And conversely, the more

people that want to sell the stock, the lower the price will

be. This form of valuation is very hard to understand or

predict, and it often drives the short-term stock market

trends.

There are many different ways to value stocks. The key is

to take each approach into account while formulating an

overall opinion of the stock. If the valuation of a company

is lower or higher than other similar stocks, then the next

step would be to determine the reasons.

1.1.1 Earnings per share (EPS)

EPS is the net income available to common sharehold-

ers of the company divided by the number of shares out-

standing. Usually there will be two types of EPS listed: a

GAAP (Generally Accepted Accounting Principles) EPS

and a Pro Forma EPS, which means that the income has

been adjusted to exclude any one time items as well as

some non-cash items like amortization of goodwill or

stock option expenses. The most important thing to look

for in the EPS figure is the overall quality of earnings.

Make sure the company is not trying to manipulate their

EPS numbers to make it look like they are more prof-

itable. Also, look at the growth in EPS over the past sev-

eral quarters / years to understand how volatile their EPS

is, and to see if they are an underachiever or an over-

1

https://en.wikipedia.org/wiki/Financial_markets

https://en.wikipedia.org/wiki/Stock

https://en.wikipedia.org/wiki/Undervalued_stock

https://en.wikipedia.org/wiki/Fundamental_analysis

https://en.wikipedia.org/wiki/Intrinsic_value_(finance)

https://en.wikipedia.org/wiki/Intrinsic_value_(finance)

https://en.wikipedia.org/wiki/John_Maynard_Keynes

https://en.wikipedia.org/wiki/Stock%2520valuation#Keynes%2527s_view

https://en.wikipedia.org/wiki/Liquidity

https://en.wikipedia.org/wiki/Discounted_cash_flow

https://en.wikipedia.org/wiki/Risk_premium

https://en.wikipedia.org/wiki/Capital_asset_pricing_model

https://en.wikipedia.org/wiki/Capital_asset_pricing_model

https://en.wikipedia.org/wiki/Equity_premium_puzzle

https://en.wikipedia.org/wiki/Equity_premium_puzzle

https://en.wikipedia.org/wiki/Beta_(finance)

Page 4

4 1 FUNDAMENTAL CRITERIA (FAIR VALUE)

debt instead of equity, then the sales per share will seem

high (the P/S will be lower). All things equal, a lower P/S

ratio is better. However, this ratio is best looked at when

comparing more than one company.

1.1.10 Market Cap

Market cap, which is short for market capitalization, is

the value of all of the company’s stock. To measure it,

multiply the current stock price by the fully diluted shares

outstanding. Remember, the market cap is only the value

of the stock. To get a more complete picture, look at the

enterprise value.

1.1.11 Enterprise Value (EV)

Enterprise value is equal to the total value of the com-

pany, as it is trading for on the stock market. To compute

it, add the market cap (see above) and the total net debt of

the company. The total net debt is equal to total long and

short term debt plus accounts payable, minus accounts

receivable, minus cash. The enterprise value is the best

approximation of what a company is worth at any point in

time because it takes into account the actual stock price

instead of balance sheet prices. When analysts say that

a company is a “billion dollar” company, they are often

referring to its total enterprise value. Enterprise value

fluctuates rapidly based on stock price changes.

1.1.12 EV to Sales

This ratio measures the total company value as compared

to its annual sales. A high ratio means that the company’s

value is much more than its sales. To compute it, divide

the EV by the net sales for the last four quarters. This ra-

tio is especially useful when valuing companies that do

not have earnings, or that are going through unusually

rough times. For example, if a company is facing restruc-

turing and it is currently losing money, then the P/E ratio

would be irrelevant. However, by applying an EV to Sales

ratio, one could compute what that company could trade

for when its restructuring is over and its earnings are back

to normal.

1.1.13 EBITDA

EBITDA stands for earnings before interest, taxes, depre-

ciation and amortization. It is one of the best measures

of a company’s cash flow and is used for valuing both

public and private companies. To compute EBITDA, use

a company’s income statement, take the net income and

then add back interest, taxes, depreciation, amortization

and any other non-cash or one-time charges. This leaves

you with a number that approximates how much cash the

company is producing. EBITDA is a very popular figure

because it can easily be compared across companies, even

if not all of the companies are profitable.

1.1.14 EV to EBITDA

This is perhaps one of the best measurements of whether

or not a company is cheap or expensive. To compute,

divide the EV by EBITDA (see above for calculations).

The higher the number, the more expensive the company

is. However, remember that more expensive companies

are often valued higher because they are growing faster

or because they are a higher quality company. With that

said, the best way to use EV/EBITDA is to compare it to

that of other similar companies.

1.2 Approximate valuation approaches

1.2.1 Average growth approximation

Assuming that two stocks have the same earnings growth,

the one with a lower P/E is a better value. The P/E

method is perhaps the most commonly used valuation

method in the stock brokerage industry.[6][7] By using

comparison firms, a target price/earnings (or P/E) ratio

is selected for the company, and then the future earnings

of the company are estimated. The valuation’s fair price

is simply estimated earnings times target P/E. This model

is essentially the same model as Gordon’s model, if k-g is

estimated as the dividend payout ratio (D/E) divided by

the target P/E ratio.

1.2.2 Constant growth approximation

TheGordonmodel orGordon’s growthmodel[8] is the best

known of a class of discounted dividend models. It as-

sumes that dividends will increase at a constant growth

rate (less than the discount rate) forever. The valuation is

given by the formula:

P = D ·

∞∑

i=1

(

1 + g

1 + k

)i

= D ·

1 + g

k − g

and the following table defines each symbol:

Dividend growth rate is not known, but earnings growth

may be used in its place, assuming that the payout ratio is

constant.

1.2.3 Limited high-growth period approximation

When a stock has a significantly higher growth rate

than its peers, it is sometimes assumed that the earnings

growth rate will be sustained for a short time (say, 5

years), and then the growth rate will revert to the mean.

https://en.wikipedia.org/wiki/Enterprise_value

https://en.wikipedia.org/wiki/Enterprise_value

https://en.wikipedia.org/wiki/Earnings_growth

https://en.wikipedia.org/wiki/P/E

https://en.wikipedia.org/wiki/P/E

https://en.wikipedia.org/wiki/Gordon_model

https://en.wikipedia.org/wiki/Dividend_discount_model

https://en.wikipedia.org/wiki/Earnings_growth

https://en.wikipedia.org/wiki/Earnings_growth

https://en.wikipedia.org/wiki/Earnings_growth

https://en.wikipedia.org/wiki/Regression_toward_the_mean

Page 6

6 6 EXTERNAL LINKS

are thus made 'liquid' for the indi-

vidual.

— The General Theory, Chapter 12

4 See also

• Stock selection criterion

• Bond valuation

• Real estate appraisal

• Active portfolio management

• List of valuation topics

• Capital asset pricing model

• Value at risk

• Mosaic theory

• Fundamental analysis

• Technical analysis

• Fed model theory of equity valuation

• Undervalued stock

• John Burr Williams: Theory

• Chepakovich valuation model

5 References

[1] William F. Sharpe, “Investments”, Prentice-Hall, 1978,

pp. 300 et.seq.

[2] Delaware Provides Guidance Regarding Discounted Cash

Flow Analysis. Harvard Law School Forum on Corporate

Governance and Financial Regulation.

[3] Brown, Christian; Abraham, Fred (October 2012). “Sum

of PerpetuitiesMethod for Valuing Stock Prices”. Journal

of Economics 38 (1): 59–72. Retrieved 20 October 2012.

[4] Walter, James (March 1956). “Dividend Policies and

Common Stock Prices”. Journal of Finance 11 (1):

29–41. doi:10.1111/j.1540-6261.1956.tb00684.x. Re-

trieved 20 October 2012.

[5] Yee, Kenton K., Earnings Quality and the Equity Risk

Premium: A BenchmarkModel, Contemporary Account-

ing Research, Vol. 23, No. 3, pp. 833-877, Fall 2006 |

URL= http://papers.ssrn.com/sol3/papers.cfm?abstract_

id=921914

[6] Imam, Shahed, Richard Barker and Colin Clubb. 2008.

The Use of ValuationModels by UK Investment Analysts.

European Accounting Review. 17(3):503-535

[7] Demirakos, E. G., Strong, N. and Walker, M. (2004)

What valuation models do analysts use?. Accounting

Horizons 18 , pp. 221-240

[8] Corporate Finance, Stephen Ross, Randolph Westerfield,

and Jeffery Jaffe, Irwin, 1990, pp. 115-130.

[9] Discounted Cash Flow Calculator for Stock Valuation

[10] The Uncomfortable Dance Between V'ers and U'ers, Paul

McCulley, PIMCO

• Stock valuation calculator by P/E values

6 External links

https://en.wikipedia.org/wiki/The_General_Theory

https://en.wikipedia.org/wiki/Stock_selection_criterion

https://en.wikipedia.org/wiki/Bond_valuation

https://en.wikipedia.org/wiki/Real_estate_appraisal

https://en.wikipedia.org/wiki/Active_management

https://en.wikipedia.org/wiki/List_of_finance_topics#Valuation

https://en.wikipedia.org/wiki/Capital_asset_pricing_model

https://en.wikipedia.org/wiki/Value_at_risk

https://en.wikipedia.org/wiki/Mosaic_theory_(investments)

https://en.wikipedia.org/wiki/Fundamental_analysis

https://en.wikipedia.org/wiki/Technical_analysis

https://en.wikipedia.org/wiki/Fed_model

https://en.wikipedia.org/wiki/Undervalued_stock

https://en.wikipedia.org/wiki/John_Burr_Williams#Theory

https://en.wikipedia.org/wiki/Chepakovich_valuation_model

http://blogs.law.harvard.edu/corpgov/2010/07/16/delaware-provides-guidance-regarding-discounted-cash-flow-analysis/

http://blogs.law.harvard.edu/corpgov/2010/07/16/delaware-provides-guidance-regarding-discounted-cash-flow-analysis/

http://business.uni.edu/economics/joe.htm

http://business.uni.edu/economics/joe.htm

http://www.jstor.org/stable/2976527

http://www.jstor.org/stable/2976527

Stock valuation

In financial markets, stock valuation is the method of

calculating theoretical values of companies and their

stocks. The main use of these methods is to predict fu-

ture market prices, or more generally, potential market

prices, and thus to profit from price movement – stocks

that are judged undervalued (with respect to their the-

oretical value) are bought, while stocks that are judged

overvalued are sold, in the expectation that undervalued

stocks will, on the whole, rise in value, while overvalued

stocks will, on the whole, fall.

In the view of fundamental analysis, stock valuation based

on fundamentals aims to give an estimate of the intrinsic

value of a stock, based on predictions of the future cash

flows and profitability of the business. Fundamental anal-

ysis may be replaced or augmented by market criteria –

what the market will pay for the stock, without any neces-

sary notion of intrinsic value. These can be combined as

“predictions of future cash flows/profits (fundamental)",

together with “what will the market pay for these prof-

its?" These can be seen as “supply and demand” sides –

what underlies the supply (of stock), and what drives the

(market) demand for stock?

In the view of others, such as John Maynard Keynes,

stock valuation is not a prediction but a convention, which

serves to facilitate investment and ensure that stocks are

liquid, despite being underpinned by an illiquid business

and its illiquid investments, such as factories.

1 Fundamental criteria (fair value)

The most theoretically sound stock valuation method,

called income valuation or the discounted cash flow

(DCF) method, involves discounting of the profits

(dividends, earnings, or cash flows) the stock will bring to

the stockholder in the foreseeable future, and a final value

on disposal.[1] The discounted rate normally includes a

risk premium which is commonly based on the capital

asset pricing model.

In July 2010, a Delaware court ruled on appropriate in-

puts to use in discounted cash flow analysis in a dispute

between shareholders and a company over the proper

fair value of the stock. In this case the shareholders’

model provided value of $139 per share and the com-

pany’s model provided $89 per share. Contested inputs

included the terminal growth rate, the equity risk pre-

mium, and beta.[2]

1.1 Stock valuation methods

Stocks have two types of valuations. One is a value cre-

ated using some type of cash flow, sales or fundamen-

tal earnings analysis. The other value is dictated by how

much an investor is willing to pay for a particular share of

stock and by how much other investors are willing to sell

a stock for (in other words, by supply and demand). Both

of these values change over time as investors change the

way they analyze stocks and as they become more or less

confident in the future of stocks.

The fundamental valuation is the valuation that people

use to justify stock prices. The most common example

of this type of valuation methodology is P/E ratio, which

stands for Price to Earnings Ratio. This form of valua-

tion is based on historic ratios and statistics and aims to

assign value to a stock based on measurable attributes.

This form of valuation is typically what drives long-term

stock prices.

The other way stocks are valued is based on supply and

demand. The more people that want to buy the stock,

the higher its price will be. And conversely, the more

people that want to sell the stock, the lower the price will

be. This form of valuation is very hard to understand or

predict, and it often drives the short-term stock market

trends.

There are many different ways to value stocks. The key is

to take each approach into account while formulating an

overall opinion of the stock. If the valuation of a company

is lower or higher than other similar stocks, then the next

step would be to determine the reasons.

1.1.1 Earnings per share (EPS)

EPS is the net income available to common sharehold-

ers of the company divided by the number of shares out-

standing. Usually there will be two types of EPS listed: a

GAAP (Generally Accepted Accounting Principles) EPS

and a Pro Forma EPS, which means that the income has

been adjusted to exclude any one time items as well as

some non-cash items like amortization of goodwill or

stock option expenses. The most important thing to look

for in the EPS figure is the overall quality of earnings.

Make sure the company is not trying to manipulate their

EPS numbers to make it look like they are more prof-

itable. Also, look at the growth in EPS over the past sev-

eral quarters / years to understand how volatile their EPS

is, and to see if they are an underachiever or an over-

1

https://en.wikipedia.org/wiki/Financial_markets

https://en.wikipedia.org/wiki/Stock

https://en.wikipedia.org/wiki/Undervalued_stock

https://en.wikipedia.org/wiki/Fundamental_analysis

https://en.wikipedia.org/wiki/Intrinsic_value_(finance)

https://en.wikipedia.org/wiki/Intrinsic_value_(finance)

https://en.wikipedia.org/wiki/John_Maynard_Keynes

https://en.wikipedia.org/wiki/Stock%2520valuation#Keynes%2527s_view

https://en.wikipedia.org/wiki/Liquidity

https://en.wikipedia.org/wiki/Discounted_cash_flow

https://en.wikipedia.org/wiki/Risk_premium

https://en.wikipedia.org/wiki/Capital_asset_pricing_model

https://en.wikipedia.org/wiki/Capital_asset_pricing_model

https://en.wikipedia.org/wiki/Equity_premium_puzzle

https://en.wikipedia.org/wiki/Equity_premium_puzzle

https://en.wikipedia.org/wiki/Beta_(finance)

Page 4

4 1 FUNDAMENTAL CRITERIA (FAIR VALUE)

debt instead of equity, then the sales per share will seem

high (the P/S will be lower). All things equal, a lower P/S

ratio is better. However, this ratio is best looked at when

comparing more than one company.

1.1.10 Market Cap

Market cap, which is short for market capitalization, is

the value of all of the company’s stock. To measure it,

multiply the current stock price by the fully diluted shares

outstanding. Remember, the market cap is only the value

of the stock. To get a more complete picture, look at the

enterprise value.

1.1.11 Enterprise Value (EV)

Enterprise value is equal to the total value of the com-

pany, as it is trading for on the stock market. To compute

it, add the market cap (see above) and the total net debt of

the company. The total net debt is equal to total long and

short term debt plus accounts payable, minus accounts

receivable, minus cash. The enterprise value is the best

approximation of what a company is worth at any point in

time because it takes into account the actual stock price

instead of balance sheet prices. When analysts say that

a company is a “billion dollar” company, they are often

referring to its total enterprise value. Enterprise value

fluctuates rapidly based on stock price changes.

1.1.12 EV to Sales

This ratio measures the total company value as compared

to its annual sales. A high ratio means that the company’s

value is much more than its sales. To compute it, divide

the EV by the net sales for the last four quarters. This ra-

tio is especially useful when valuing companies that do

not have earnings, or that are going through unusually

rough times. For example, if a company is facing restruc-

turing and it is currently losing money, then the P/E ratio

would be irrelevant. However, by applying an EV to Sales

ratio, one could compute what that company could trade

for when its restructuring is over and its earnings are back

to normal.

1.1.13 EBITDA

EBITDA stands for earnings before interest, taxes, depre-

ciation and amortization. It is one of the best measures

of a company’s cash flow and is used for valuing both

public and private companies. To compute EBITDA, use

a company’s income statement, take the net income and

then add back interest, taxes, depreciation, amortization

and any other non-cash or one-time charges. This leaves

you with a number that approximates how much cash the

company is producing. EBITDA is a very popular figure

because it can easily be compared across companies, even

if not all of the companies are profitable.

1.1.14 EV to EBITDA

This is perhaps one of the best measurements of whether

or not a company is cheap or expensive. To compute,

divide the EV by EBITDA (see above for calculations).

The higher the number, the more expensive the company

is. However, remember that more expensive companies

are often valued higher because they are growing faster

or because they are a higher quality company. With that

said, the best way to use EV/EBITDA is to compare it to

that of other similar companies.

1.2 Approximate valuation approaches

1.2.1 Average growth approximation

Assuming that two stocks have the same earnings growth,

the one with a lower P/E is a better value. The P/E

method is perhaps the most commonly used valuation

method in the stock brokerage industry.[6][7] By using

comparison firms, a target price/earnings (or P/E) ratio

is selected for the company, and then the future earnings

of the company are estimated. The valuation’s fair price

is simply estimated earnings times target P/E. This model

is essentially the same model as Gordon’s model, if k-g is

estimated as the dividend payout ratio (D/E) divided by

the target P/E ratio.

1.2.2 Constant growth approximation

TheGordonmodel orGordon’s growthmodel[8] is the best

known of a class of discounted dividend models. It as-

sumes that dividends will increase at a constant growth

rate (less than the discount rate) forever. The valuation is

given by the formula:

P = D ·

∞∑

i=1

(

1 + g

1 + k

)i

= D ·

1 + g

k − g

and the following table defines each symbol:

Dividend growth rate is not known, but earnings growth

may be used in its place, assuming that the payout ratio is

constant.

1.2.3 Limited high-growth period approximation

When a stock has a significantly higher growth rate

than its peers, it is sometimes assumed that the earnings

growth rate will be sustained for a short time (say, 5

years), and then the growth rate will revert to the mean.

https://en.wikipedia.org/wiki/Enterprise_value

https://en.wikipedia.org/wiki/Enterprise_value

https://en.wikipedia.org/wiki/Earnings_growth

https://en.wikipedia.org/wiki/P/E

https://en.wikipedia.org/wiki/P/E

https://en.wikipedia.org/wiki/Gordon_model

https://en.wikipedia.org/wiki/Dividend_discount_model

https://en.wikipedia.org/wiki/Earnings_growth

https://en.wikipedia.org/wiki/Earnings_growth

https://en.wikipedia.org/wiki/Earnings_growth

https://en.wikipedia.org/wiki/Regression_toward_the_mean

Page 6

6 6 EXTERNAL LINKS

are thus made 'liquid' for the indi-

vidual.

— The General Theory, Chapter 12

4 See also

• Stock selection criterion

• Bond valuation

• Real estate appraisal

• Active portfolio management

• List of valuation topics

• Capital asset pricing model

• Value at risk

• Mosaic theory

• Fundamental analysis

• Technical analysis

• Fed model theory of equity valuation

• Undervalued stock

• John Burr Williams: Theory

• Chepakovich valuation model

5 References

[1] William F. Sharpe, “Investments”, Prentice-Hall, 1978,

pp. 300 et.seq.

[2] Delaware Provides Guidance Regarding Discounted Cash

Flow Analysis. Harvard Law School Forum on Corporate

Governance and Financial Regulation.

[3] Brown, Christian; Abraham, Fred (October 2012). “Sum

of PerpetuitiesMethod for Valuing Stock Prices”. Journal

of Economics 38 (1): 59–72. Retrieved 20 October 2012.

[4] Walter, James (March 1956). “Dividend Policies and

Common Stock Prices”. Journal of Finance 11 (1):

29–41. doi:10.1111/j.1540-6261.1956.tb00684.x. Re-

trieved 20 October 2012.

[5] Yee, Kenton K., Earnings Quality and the Equity Risk

Premium: A BenchmarkModel, Contemporary Account-

ing Research, Vol. 23, No. 3, pp. 833-877, Fall 2006 |

URL= http://papers.ssrn.com/sol3/papers.cfm?abstract_

id=921914

[6] Imam, Shahed, Richard Barker and Colin Clubb. 2008.

The Use of ValuationModels by UK Investment Analysts.

European Accounting Review. 17(3):503-535

[7] Demirakos, E. G., Strong, N. and Walker, M. (2004)

What valuation models do analysts use?. Accounting

Horizons 18 , pp. 221-240

[8] Corporate Finance, Stephen Ross, Randolph Westerfield,

and Jeffery Jaffe, Irwin, 1990, pp. 115-130.

[9] Discounted Cash Flow Calculator for Stock Valuation

[10] The Uncomfortable Dance Between V'ers and U'ers, Paul

McCulley, PIMCO

• Stock valuation calculator by P/E values

6 External links

https://en.wikipedia.org/wiki/The_General_Theory

https://en.wikipedia.org/wiki/Stock_selection_criterion

https://en.wikipedia.org/wiki/Bond_valuation

https://en.wikipedia.org/wiki/Real_estate_appraisal

https://en.wikipedia.org/wiki/Active_management

https://en.wikipedia.org/wiki/List_of_finance_topics#Valuation

https://en.wikipedia.org/wiki/Capital_asset_pricing_model

https://en.wikipedia.org/wiki/Value_at_risk

https://en.wikipedia.org/wiki/Mosaic_theory_(investments)

https://en.wikipedia.org/wiki/Fundamental_analysis

https://en.wikipedia.org/wiki/Technical_analysis

https://en.wikipedia.org/wiki/Fed_model

https://en.wikipedia.org/wiki/Undervalued_stock

https://en.wikipedia.org/wiki/John_Burr_Williams#Theory

https://en.wikipedia.org/wiki/Chepakovich_valuation_model

http://blogs.law.harvard.edu/corpgov/2010/07/16/delaware-provides-guidance-regarding-discounted-cash-flow-analysis/

http://blogs.law.harvard.edu/corpgov/2010/07/16/delaware-provides-guidance-regarding-discounted-cash-flow-analysis/

http://business.uni.edu/economics/joe.htm

http://business.uni.edu/economics/joe.htm

http://www.jstor.org/stable/2976527

http://www.jstor.org/stable/2976527