The accounting-based stock valuation formula calculates the value of a stock as the book value of the net operating assets plus the present value of future expected dividends discounted at the cost of equity.

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The accounting-based stock valuation formula typically calculates the value of a stock based on the book value of the company's equity, not by adding the present value of future expected dividends. The dividend discount model (DDM) is the valuation method that calculates stock value based on the present value of future dividends.

The Accounting-Based Stock Valuation Formula Calculates the Value of a Stock