RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Declares dividend Mirage, The application of modeling is influenced by applicant, the variables or inputs you use and the potential errors of your future risk free rate and empirical data of the company might be in changing ahead?
What if what you are doing now with the various modeling methodologies (since stand-alone CAPM is unreliable, so as the applicant, you will have to use it to support your other models) is similar to the ones who attempted to do the same to Apple stock in 1997? Just before iMac, iPhone and Iwatch were introduced?
Financial stability is what management can control and use the cash flow for further business strategy and business development and acquisition.
Share price:
For companies this size, it's not about a individual mom and pop investor hoping to pump-and-dump or you trying to spread fear so that you can short and turn a quick profit. The cash flow management will build the foundation for their future acquisition & business expansion. Companies this size would utilize shares / options to acquire profitable companies and if the share price is optimal or trading at a premium, they will be able to continue expanding via prudent management (of course).
Growth, bankruptcy, financial stability:
When you put excessive emphasize on "Growth" and "Bankruptcy" as the two key detrimental factors of the company/stock, I would emphasize more on "financial stability" which can be controlled by management.
You have mentioned one example that a company can go bankrupt with Revenue becoming zero (but corporate managers are hired to run a company to achieve zero revenue, but are hired to seek avenues to increase the top-line and bottom-line as well), another faster way to achieve bankruptcy is a Growth-oriented company with poor financial management (I.e Gymboree, forever 21, I want to say Netflix though they are not really bankrupt yet... Netflix is mentioned because they are blindly chasing market share/viewer and create contents with the i-am-too-big-to-fail-and accumulate-as-much-debt-as-they-can-get-and-can-never-really-repay).
Since the market is never efficient because you don't know what product or management in the company will introduce that could potentially create a sustainable revenue stream for the company, investors should first observe a company's financial management roadmap to ensure they don't run like Gymboree, forever21 or Netflix. And buying back shares when shares are trading at a discount is in Mr Buffett's lecture, Berkshire never pays dividend but always has the spare cash for acquisition and investment and buy back shares when the benefit of share redemption exceeds investment or acquisition. How can they have the money to do so? They practiced prudent financial management and that is the very fundamental of corporate finance that comes even before share price movement (subjective) and revenue growth (which is the next important item on the list after ensuring your existing operation and financial obligations won't go under. Note: there are too many companies chasing for growth and have gone bankruptcy or got bought out and assets/market shares were split- simply because of poor financial management via junk bond issuance and accumulated too much debt that cannot repay)