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How to Price a Stock

A $500 stock can be cheap. A $5 stock can be expensive. This free course teaches you to tell the difference — from first principles to professional-grade DCF modelling.

Two companies with different share prices but the value comparison depends on share count Company A at 500 dollars per share with 10 million shares equals a 5 billion dollar market cap. Company B at 50 dollars per share with 1 billion shares equals a 50 billion dollar market cap. Company A $500 per share × 10 million shares = $5 billion Company B $50 per share × 1 billion shares = $50 billion
Same question, opposite answer: the “$50 stock” is the ten-times-bigger company. Price per share tells you nothing until you know the share count — and even then, nothing about value.
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What you'll be able to do

  • Value any profitable company with a discounted cash flow (DCF) model — by hand, and understanding every line.
  • Screen quickly and correctly with multiples, and spot when a “cheap” multiple is a value trap.
  • Value dividend payers with the Gordon and two-stage dividend discount models.
  • Adapt the toolkit for the hard cases — banks, REITs, resource cyclicals, and money-losing growth stocks.
  • Compute a margin of safety and turn analysis into a disciplined buy/pass decision.
  • Read any valuation someone hands you — your own or an analyst's — and know which assumptions are carrying it.

The syllabus

Ten modules plus a capstone. Foundation → Core → Advanced → Mastery. Advanced readers can skip ahead using the level badges; every module stands on its own.

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Educational purposes only — not investment advice. This course is for general education. Nothing here is a recommendation to buy or sell any security. Company figures in worked examples are illustrative or clearly date-stamped historical figures and may be out of date. RiskStock is not a registered dealer or adviser. Always do your own research and consult a licensed advisor.