Business, Management and Accounting
8 years ago

P/E and M/B Ratios Revolutionize Equity Valuation for Investors

1 view
Journal of business and behavioral sciences
Price-Toearnings and Market-to-Book Metrics in the Practical Application of the Discounted Dividend Theory of Equity Valuation
Charles Rayhorn, Kenneth E. Jansen

Paper Summary

The article explores how to value stocks using the Dividend Discount Model. It suggests that using the P/E ratio and M/B ratio can help investors determine if a stock is a good buy or sell. The main idea is to find stocks that are undervalued based on their potential future cash flows.

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