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Steven Popovic
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Decks in this class (18)
a distinguish between the method of comparables and the method based on forecasted fundamentals as approaches to using price multiples in valuation, and explain economic rationales for each approach;
No deck description has yet been added by the author.
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b calculate and interpret a justified price multiple;
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c describe rationales for and possible drawbacks to using alternative price multiples and dividend yield in valuation;
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d calculate and interpret alternative price multiples and dividend yield;
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e calculate and interpret underlying earnings, explain methods of normalizing earnings per share (EPS), and calculate normalized EPS;
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f explain and justify the use of earnings yield (E/P);
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g describe fundamental factors that influence alternative price multiples and dividend yield;
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h calculate and interpret the justified price-to- earnings ratio (P/E), price-to- book ratio (P/B), and price-to- sales ratio (P/S) for a stock, based on forecasted fundamentals;
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i calculate and interpret a predicted P/E, given a cross-sectional regression on fundamentals, and explain limitations to the cross-sectional regression methodology;
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j evaluate a stock by the method of comparables, and explain the importance of fundamentals in using the method of comparables;
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k calculate and interpret the P/E-to- growth ratio (PEG), and explain its use in relative valuation;
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l calculate and explain the use of price multiples in determining terminal value in a multistage discounted cash flow (DCF) model;
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m explain alternative definitions of cash flow used in price and enterprise value (EV) multiples, and describe limitations of each definition;
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n calculate and interpret EV multiples, and evaluate the use of EV/EBITDA;
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o explain sources of differences in cross-border valuation comparisons;
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p describe momentum indicators and their use in valuation;
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q explain the use of the arithmetic mean, the harmonic mean, the weighted harmonic mean, and the median to describe the central tendency of a group of multiples;
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r evaluate whether a stock is overvalued, fairly valued, or undervalued based on comparisons of multiples.
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More about
l2 37 market-based valuation: price and enterprise value multiples
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