Egorova Scheme

Egorov's scheme is a mathematical formula that is used to determine the value of a company's shares. It was developed by Russian mathematician and economist Igor Egorov in the 1990s.

Egorov's scheme is based on the assumption that the price of a share depends on two factors: the profitability of the company and the risk associated with its investment. The formula looks like this:

P = D / (1 + R),

where P is the share price, D is the company’s profitability, and R is the risk associated with investing.

In this formula, a company's profitability is defined as the ratio of profit to investment, and risk is defined as the standard deviation of the company's profitability. If a company has high returns and low risk, then its shares will be expensive. If a company has low profitability and high risk, then its shares will be cheap.

However, Egorov's scheme does not take into account many factors that can affect the price of shares, such as macroeconomic conditions, political risks, etc. Therefore, it cannot be used to accurately predict stock prices.

Nevertheless, Egorov's scheme remains popular among investors, as it allows you to estimate the value of shares without the need for complex calculations. It can also be used to compare stock prices of different companies and determine the most profitable investment opportunities.