Th E Apparen T Magnitud E O F a Sta

question 16

Short Answer

Th e apparen t magnitud e o f a sta r observe d fro m a distanc e o f 1 0 pc is called _____.

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Definitions:

P/E Ratio

A valuation ratio of a company's current share price compared to its per-share earnings, used to evaluate if the stock is over or underpriced.

Intrinsic Value

The perceived or calculated true value of an asset, based on fundamental analysis, irrespective of its current market price.

Mispriced Stock

A stock that is selling for a price which does not accurately reflect its intrinsic value, either undervalued or overvalued.

FCFE Valuation Model

A method used to estimate the value of a company by discounting its expected free cash flows to equity holders at an appropriate risk-adjusted rate.