Introduction to Corporate Finance

Ross et al.: Fundamentals

of Corporate Finance, Sixth

Edition, Alternate Edition

III. Valuation of Future

Cash Flows

(^294) 8. Stock Valuation © The McGraw−Hill
Companies, 2002
SUMMARY AND CONCLUSIONS
This chapter has covered the basics of stocks and stock valuation. The key points include:

1. The cash flows from owning a share of stock come in the form of future dividends.
   We saw that in certain special cases it is possible to calculate the present value of
   all the future dividends and thus come up with a value for the stock.

264 PART THREE Valuation of Future Cash Flows

FIGURE 8.2

Source: Reprinted by permission ofThe Wall Street Journal,September 25, 2001. Reprinted by permission of Dow Jones

& Company, Inc. via Copyright Clearance Center, Inc. © 2001 Dow Jones & Company, Inc. All Rights Reserved

Worldwide.

Sample Stock Quotation from The Wall Street Journal

8.4