Historical data may be used to roughly predict future dividends in the absence of other data.

Make variable D represent this figure. For example, the Widget Corp.

Usually, this is your purchase price, either historically or now, if you purchase it. Set this value as variable P.

How to Figure a Market Capitalization Rate for Stocks | The Finance Base

Assume that the Widget Corp. Determine the price of the stock at the end of the evaluation period.

This is either an estimate of its future price, or if examining historical prices, its current price. Set this value as p.

Investments and Securities Test Bank Chapter 13 Flashcards | Quizlet

In the example, Widget Corp. Apply variables into the formula to determine market capitalization rate, variable R. How to Figure a Market Capitalization Rate for Stocks by Wilhelm Schnotz More Articles How to Calculate Common Stock for Holding Period Returns Calculating Common Stock Value Difference Between the Straight Line Method of Depreciation and Unit of Production How to Calculate the Projected Stock Prices How to Calculate Rate of Return on a Price Weighted Index How to Calculate Growth Implied in Stock Price.

References 3 San Francisco State University: Introduction to Financial Management Yale School of Management; Lecture Notes to Accompany Brealey and Myers Principles of Corporate Finance; Matthew Spiegel South Texas College of Law: Using Comparative Ratios to Calculate Investment Value.

More Articles How to Calculate the Annualized Holding Period Return How to Calculate Daily Stock Return How to Calculate Beta for Individual Stocks in Excel How to Calculate Modified Duration.

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