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  • What is a share?

  • A share represent part of companies value. It's worth what the company can generate during its life, discounted back to today's value at a apropreate discount rate. It's nothing else. If anybody buys it, it should be able to generate and pay the cash it worth. Discount rate may vary depending on the riskyness of the cashflow as well.

    When you invest in any stock, think of it as a cashflow, whether this perticular share can generate this much of cash during its life time.

    Evaluate GREG also in the same line, if you understand that GREG is not going to make it, it will one day collapse, but nobody knows when.. it will happpn any day, its going to happen....


    If this company work of Rs 80 bn today, just imagine how much monay they should make annually to generate, say 10% ROE..., yes you are correct, you got the maths...
  • 0 replies posted by Baba, 31 Jul 10
This post has been viewed 67 times, by 4 logged-in users the last being smalik.
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{#} Use # when referring to a stock to help people locate posts and replies related to that stock.ex: #JKH or #SPEN, no company names and remember to keep NO SPACES between the # and the stock symbol.