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L1 51 Equity Valuation: Concepts and Basic Tools

This class was created by Brainscape user Steven Popovic. Visit their profile to learn more about the creator.

By: Steven Popovic
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Decks in this class (11)

A: Evaluate whether a security, given its current market price and a value estimate, is overvalued, fairly valued or undervalued by the market
SchweserNotes: Book 4 p.293 CFA Program Curriculum: Vol.5 p.248
4  cards
B: Describe major categories of equity valuation models
SchweserNotes: Book 4 p.294 CFA Program Curriculum: Vol.5 p.250
3  cards
C Explain the rationale for using present‐value of cash flow models to value equity and describe the dividend discount and free‐cash‐flow‐to‐equity models
SchweserNotes: Book 4 p.295 CFA Program Curriculum: Vol.5 p.252
6  cards
d: Calculate the intrinsic value of a non-callable, non-convertible preferred stock.
SchweserNotes: Book 4 p.298 CFA Program Curriculum: Vol.5 p.255
2  cards
e: Calculate and interpret the intrinsic value of an equity security based on the Gordon (constant) growth dividend discount model or a two-stage dividend discount model, as appropriate.
SchweserNotes: Book 4 p.299 CFA Program Curriculum: Vol.5 p.258
13  cards
f identify companies for which the constant growth or a multistage dividend discount model is appropriate;
0  cards
g explain the rationale for using price multiples to value equity and distinguish between multiples based on comparables versus multiples based on fundamentals;
0  cards
h calculate and interpret the following multiples: price to earnings, price to an estimate of operating cash flow, price to sales, and price to book value;
0  cards
i describe enterprise value multiples and their use in estimating equity value;
0  cards
j describe asset-based valuation models and their use in estimating equity value;
0  cards
k explain advantages and disadvantages of each category of valuation model.
0  cards

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L1 51 Equity Valuation: Concepts and Basic Tools

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