Canadian Stock Market Value Measurement

Overview of Value Measurement The purpose of this report is to understand the Canadian stock market and evaluate the stock price of the following six Canadian companies: Montreal Bank, Toronto Dominion Bank, Canada Tire, Sears, Husky Energy and Petro - Canada. Based on a safe market line theory, we used 10 years of data to test the prices of six companies in Canada. The stock price of these companies comes from Yahoo Finance and MSN Finance. A simple linear regression method is used to calculate risk premium and beta.

The value of the company can be determined in various ways. There are many different ways to determine the value of their stocks. Whether it is a company or a stock, the most fundamental and easiest way to measure this value must take into account the company's market value. This is also called the market capitalization or market capitalization of the company. Market value is the value obtained by multiplying all outstanding shares of the company stock by the current price of a single stock.

Market value measurement refers to the price at which investors buy and sell shares in the open market. Market value shows the company's current financial condition and the future position in the future. Earnings per share is the share price of one share divided by the number of shares of one share. The market capitalization ratio is the fair value of one share divided by the carrying amount or the cost per share. Normally, a value greater than 1 indicates that the company's inventory value is increasing. Arrow's P / E ratio in 1999 was 20.23 according to current domestic standards 21. In the three years discussed, in the years 1999, 98 and 97, Arrow's earnings per share was 1 , Showing an increase in stock price. Mitsubishi Electric's 1999 P / E ratio was 89.2 which is very high. People can interpolate this high P / E ratio and show that Mitsubishi has a prospect of significant growth. However, when analyzing this ratio it is clear that the EPS value of 11 is very low.

So, is the current market expensive? Answering this question may be due to the fact that investors are willing to pay for a certain "value". In its most basic sense, the value of a stock can be measured by its revenue. What is the company's earnings for a particular year? Then, do you think we are willing to pay for these benefits? Normally you hear P / E (P / E ratio). Generally, if the price-earnings ratio of the stock is 10, the stock is considered cheap. If the price-earnings ratio is 15, the stock price is reasonable. When the price-earnings ratio exceeds 25, investors think that the stock price is high. This is a very general statement, we hope to be able to answer the question just whether the entire market is negotiating at the moment. Currently, the P / E ratio of S & P 500 is about 21 (last 12 months). So it is getting increasingly "expensive", but there is still room for us to explain it this way