This paper presents an equation mathematically derived by using discounted cash flow method. This equation has several advantages. It is easy to use. It can be used for all the three popular models. It can be programed into calculator or electronic spreadsheet. It is more versatile than the...

It is generally believed that excessive stock market volatility reflects non-mathematical market expectations that are driven by “irrational exuberance” or “animal spirits”. As shown in this paper, there is an alternative explanation. If ex-ante and ex-post expectations are calculated in...