In fact, it is sometimes known as the bottom line where a firm's worth is concerned, both literally (as the last item on the income statement) and figuratively. A higher EPS means a company is profitable enough to pay out more money to its shareholders. For example, a company might ...
Equity risk premium is calculated as the difference between the estimated real return on stocks and the estimated real return on safe bonds—that is, by subtracting the risk-free return from the expected asset return (the model makes a key assumption that current valuation multiples are roughly c...
When a company undergoes astock split, it increases the number of shares outstanding while reducing the price of each share by a similar proportion. For instance, in a 2:1 stock split, there will be twice as many shares, but at half the pre-split price. As a result, splits do not i...