Cost of capital

Analysis of the ever-changing price of money

Stock prices rose last fortnight. The S&P 500 index of big American companies climbed 3% to 4,906 as corporate earnings rose. Earnings per share for the index rose $2.60 to $214.20. At the current price, it offers an 8.7% expected return, still some of the highest returns on offer in over a decade.

Valuabl’s discounted cash flow model suggests the S&P 50…