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Hi! I’m new to CasP (almost done with Chapter 9) and don’t have much of an economics background, so I was hoping to ask some really basic questions.
I’m not sure I’m correctly understanding some basic terminology. First, I’m not sure what “discounting” means as it’s used in the book. I gather it relates to the process of basing the price of an asset on estimations of its future earnings?
Also, what is the difference between “capitalization” as its used here and price/earnings ratios?
Please explain it to me like I’m a very dumb man, because I am a very dumb man.
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