TY - JOUR T1 - Explaining Stock Price Volatility with Terminal Value<br/>Estimates JF - The Journal of Private Equity SP - 16 LP - 25 DO - 10.3905/jpe.2011.15.1.016 VL - 15 IS - 1 AU - Harlan Platt AU - Marjorie Platt AU - Sebahattin Demirkan Y1 - 2011/11/30 UR - https://pm-research.com/content/15/1/16.abstract N2 - Stock price volatility has become more extreme and, as a consequence, investor’s portfolios have grown more risky and many investors have given up on the stock market. Undoubtedly, geopolitical turmoil and natural disasters played a major role in heightening the volatility of equities. Another argument for this volatility is presented in this article: analysts’ near-uniform reliance on discounted cash flow methodology with its oversized terminal value estimate is responsible for large stock price movements, both upward and downward, when new information causes analysts to modify their assumptions.TOPICS: Private equity, volatility measures, analysis of individual factors/risk premia, statistical methods ER -