Research Of Stock Valuation Based On Cash Flow Model

Value is the premise and basis of all economic behaviors.Whether company acquisitions or stock trading,valuation is the core of the entire transaction process.So far stock valuation is still a world-class challenge,there is no perfect theory to predict the short-term price of stocks.Because of the stock price may fluctuate due to the influence of the overall market performance,group psychological fluctuations,sudden political events,etc.However,in a relatively long period,company value is the main factor determining the stock price,the stock price is a manifestation of the value of the company.In the chapter of basic theory,studying domestic and foreign literature.Identifying the company's nature and value,and sorting out the nature of financial markets and stocks.Researching on commonly used valuation theory such as Free Cash Flow Valuation Model,Ohlson Residual Income Valuation Model,Economic Value Added Valuation Model,Black-Scholes Option Pricing Model.In-depth researching the theoretical essence of Free Cash Flow Valuation Model,lucubrating the calculation method of all valuation parameters(Free Cash Flow,Reinvestment Rate,Growth Rate,Discount Rate,Risk Premium and Future Value).In the chapter of empirical analysis,taking the XinZhouBang Company as the research object.First of all,from the qualitative analysis level,researching the company's market prospect and management capabilities,to verify the company possessing enough competitiveness to keep persistent growing in the future.Then,using a statistical analysis method,combining with the big data of the overall market and the stock investment income of XinZhouBang to calculate the company's Investment Beta Coefficient ?;Calculating the Risk-free Interest Rate and Equity Risk Premium based on the overall market performance;Calculating the company's expected Free Cash Flow,Reinvestment Rate,Growth Rate,and other valuation parameters based on the analysis of the original data such as the balance sheet,income statement,and cash flow statement gathered from the company's annual financial report,and then gradual calculating and valuating the reasonable stock value of the XinZhouBang.In the process of collecting raw data,comprehensive acquiring bulks of data from Tongdaxin Stock Trading Terminal Platform,Wind Data,Public Financial Data Platform,and historical annual reports;in the process of statistical analysis,applying the IBM SPSS statistical software and Microsoft Excel inline programming function.Finally,based on the view of maximizing the value both of corporate and shareholder wealth,suggesting XinZhouBang's management should pay attention to the growth of profit,the effectiveness of reinvestment,the reduction of capital costs,and getting control of stock issuance quantity.And suggesting stock investors should be concerned that the company's large amount of new investment does not translate into actual production output,which may reduce the company's profitability financial indicators.