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5
votes
1answer
110 views

Why are Bank of America and Citi trading so far below book value?

In 2008, a famously wealthy man bet big on Bear Sterns, citing that it was absurd that it was trading below book value. That man is now only slightly wealthy. The lesson was that you should trust book ...
3
votes
2answers
155 views

How come we can find less than 1 Price to Book stocks?

I was wondering, if there is such a stock, why isn't everyone getting it as there is supposedly no risk. For instance, a stock like NYSEARCA:VDE has Price to Book: 0.78. Div yield: 1.99. Growing ...
0
votes
2answers
170 views

How to measure the cost/value of an Asset in the Financial Statement

I am currently working on my own Financial Statements. I have several blogs and derive considerable income from it then i decided to put all the assets and liabilities in the books. My problem is ...
3
votes
1answer
1k views

What prices are compared to decide a security is over-valued, fairly valued or under-valued?

The Capital Asset Pricing Model (CAPM) for asset i is E(R_i) = R_f + \beta_{i} (E(R_m) - R_f) It can be used for asset pricing We can compare the expected/required rate of return, E(R_i), ...
3
votes
3answers
15k views

How to calculate stock price (value) based on given values for equity and debt?

If a company has $80 million in equity and $20 million in debt, this means that total firm value = D + E = $100 million. Am I then right to assume that if there are 1 million shares outstanding, then ...
7
votes
2answers
458 views

Correct calculation for determining real business book value per share?

I'm trying to calculate the real value of a business and, as an example, I picked Netflix. From their latest financial statements I can see that: Assets value is: $3,065,709,000 Liabilities value ...
3
votes
2answers
3k views

If a stock is selling for less than book value, is the company headed for bankruptcy?

A company's book value is the worth of all their assets. If its stock value is less than its book value, does that mean its business is worthless and bankruptcy is imminent? This is a followup to my ...
6
votes
4answers
2k views

What could cause a stock to trade below book value?

A company's book value is the worth of all their assets. What would cause a stock to trade below book value?