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 0.8% to 5,070 as corporate earnings rose. Earnings per share for the index rose to $221.10. At the current price, it offers an 8.9% annual expected return, some of the highest returns in over a decade.

𝑉𝑎𝑙𝑢𝑎𝑏𝑙’s discounted cash flow model suggests the S&P 500 is …