Financial Terms / U - V / Valuation

Valuation

Valuation is the process of determining the present (or future expected) value of an asset or an organization. The purpose of valuing a particular asset is to compare your valuation with the asset's current market price to find attractive investment opportunities.

Some of the few valuation methods that are used to arrive at the value of a stock or company are the Dividend Discount Model (DDM), Discounted Cash Flow model (DCF), and the Capital Asset Pricing Model (CAPM).