In this article, I’ll try to use the method proposed by Mr. Aswath Damodaran to calculate the Equity Risk Premium of an Index. I’ll use the S&P BSE 500 index for our calculations. We can apply the same method of calculation to the equity risk premium (ERP) of individual stocks. But before proceeding further, allow…
Residual income method is a unique and a comparatively easier way to estimate intrinsic value of companies. What makes it unique is the factor called “residual income“. I’m a big fan of valuing companies using discounted cash flow method (DCF). Why? Because if done accurately, its computed intrinsic value can be very accurate. But its…
Stock market moves in cycles (up and down). Falling prices are almost a daily routine. So, in backdrop of this fact, what is a stock market correction? When stock market index falls by -10% or below, it can be termed as a “correction”. Stock market corrections are frequent, or it is a rare phenomenon? On…
