Hello. How would you calculate ex post rational price for stock at particular time in history with discounted cash flow model? What cash flow to discount is clear - actual subsequent dividends. But what to use as cost of equity? And what about terminal value? Should it be current market price of stock?

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anonymous · Answer

Two loaded words here: "ex post" and "rational".. You may want to clarify what you are looking for.

anonymous · Answer

I am looking for the price of stock, that would someone be willing to pay, if he has perfect foresight. (sorry I am not native english speaker... sometimes it is difficult for me to express what I want)