Valuation bingo

Exercise and reference answers

Clues and terms

1. Clue

   Price over earnings.

   Item

   P/E ratio

2. Clue

   Uses forecast profit.

   Item

   Forward P/E

3. Clue

   All shares at price.

   Item

   Market cap

4. Clue

   Dividend over price.

   Item

   Dividend yield

5. Clue

   Stands in for cash.

   Item

   EBITDA

6. Clue

   Values future payouts.

   Item

   DDM

7. Clue

   Steady growth forever.

   Item

   Gordon model

8. Clue

   Dividend never moves.

   Item

   Zero growth

9. Clue

   Payments never end.

   Item

   Perpetuity

Instructions

Read each clue and tap the term it describes.

Explanation