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Using Today's P/E Multiples to Estimate Continuing Value Is Recommended

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Using today's P/E multiples to estimate continuing value is recommended.


Definitions:

Demand And Supply Shocks

Unexpected events that cause sudden and significant changes in the demand or supply of goods and services in the economy.

Marginal Revenue

The increase in income resulting from the sale of one extra unit of a product or service.

Average Revenue

The amount of revenue a company receives per unit of sales, calculated by dividing total revenue by the number of units sold.

Market Equilibrium

A condition in which market supply and demand balance each other, and as a result, prices become stable.

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