| terminalValueUsingPE {stockAnalyst} | R Documentation |
Calculates Terminal Value (TV) of the stock using PEs.
Description
Terminal Value at time n is calculated by taking benchmark value of trailing PE that is multiplied by EPS of the stock at time n where the final growth stage begins . This also means that Terminal Value of the stock is obtained by using comparable benchmark PE without considering growth or using multistage GGM and thereby incorporating the impact of growth (Jerald E. Pinto, 2020).
Usage
terminalValueUsingPE(
avg = c("comparable", "GGM"),
benchmarkPE,
En,
payout,
g,
r
)
Arguments
avg |
character vector. |
benchmarkPE |
number. |
En |
number. |
payout |
number. |
g |
number. |
r |
number. |
Details
According to information obtained from Jerald E. Pinto (2020), the method terminalValueUsingPE is developed for computing Terminal Value (TV) of the stock using PEs for the values passed to its six arguments. Here, avg is character string, either comparable or GGM , benchmarkPE is benchmark PE Multiple,En is EPS of the stock at time n where the final growth stage begins, payout is payout ratio, g is sustainable growth rate from GGM, and r is required rate of return on the equity.
Value
Input values to six arguments avg, benchmarkPE,En,payout,g, and r.
Author(s)
MaheshP Kumar, maheshparamjitkumar@gmail.com
Examples
terminalValueUsingPE("comparable",benchmarkPE=14.3,En=3,payout=0.45,g=0.0715,r=0.10)
terminalValueUsingPE("GGM", benchmarkPE=14.3,En=3,payout=0.45,g=0.0715,r=0.10)