How Indian Stock Market Is Affected By Other Foreign Market

Step 1: Being able to calculate the present value of the companies' stocks, we should first calculate the present value of the companies'

Based on the suggestion that the focus should be on market values, compute the weights of debt, preferred stock, and common stock.

In which, old market index refers to the index for year t and new index is the index for year (t+1).

2. Another advantage of using this method requires a calculation of one cost and to use this cost for all calculations, thus making paperwork easier. The need for detailed records for each purchase is unnecessary; businesses would maintain records for totals only. Weighted average is good for companies with commoditized items such as computers, auto parts, oil, or even air transportation services.

When investing in a company, the goal is to buy shares at a low price and then sell them at a higher price. Individual stocks may go up or down independent of how “The Market” is doing overall. Stock market indices such as the Dow Jones Average, the NASDAQ, and the Standard and Poors 500 report how “The Market” is doing “on average.” To check

The weights of debt and equity are calculated using the market values of debt and equity as follows:

1. Determine the Weighted Average Cost of Capital (WACC) based on using retained earnings in the capital structure.

The Equity beta for the whole company and for the commercial division is calculated in the appendix.

Moreover, let’s calculate the Weighted Average Cost of Capital (WACC). And in order to calculate it we need to know the capital structure of the company. Knowing the capital structure of the

After coming up with all of the financial ratios the financial statements are able to provide, management can figure out the trend analysis,

Market capitalization is calculated by the shares outstanding times share price, indicating the total market value of company equity.

Stock market performance indicators are companies that focus on certain areas of the stock market and are then used to predict the movement of the stock market. 2 major companies are DJIA (Dow Jones Industrial Average) and S&P 500 (Standard & Poor’s 500 Stock Index). DJIA represents a quarter of the stock market, since only 30 major companies are part of DJIA. S&P 500 is a better representation of the entirety of the stock market because it represents 80% of the total value of stocks. DJIA is not as good of an indicator since it’s a price weighted index (which is not as accurate since there are now added components to this index than before, such as stock splits).

3. An analysis of stock market conditions including recent returns on stock market indexes and average valuation ratios such as P/E ratios of stock market indexes.

It istaking the company’s stock price and comparing it to its earnings, cash flow, or book value (Nishi &Doering, 2000).

We use the Capital Asset Pricing Model (CAPM) to determine the cost of equity. As