1. Absolute Stock Market Valuation
2. Relative Stock Market Valuation
I'll explain these two stock valuation methods one by one, however this post would explain the Absolute Stock Valuation Method only. Relative Stock Valuation method would be explained in another post as I do not want to make this post too heavy for understanding. Step by step approach is better then a heavy dose.
Absolute Stock valuation methods can be applied using two approaches which are as follows:
1. Dividend Discount Method
2. Discounted Cash Flow Method