Just call us Bond. Amortized bond.
Over 700 finance terms, Shmooped to perfection.
What's it worth? Why? If you can answer those two questions, you can snatch the pebble from our hand.
Let's pick a few systems which Wall Streeters use to "formally" value companies:
- Comparable multiple. That is, MyCompany.com trades at 27x this year's earnings; the S&P average is 16.5x earnings. But MyCompany.com is growing way faster than the "average" S&P company. But that S&P company pays a dividend. Yours doesn't. (Neener.) That's more or less how the conversation goes, anyway.
- This thing.
- Discounted Cash Flow Analysis.