Throughout finance, one rule always holds true. The general belief is that the value of any asset or security is...
Read moreEquity valuation or the valuation of any asset is an art. Valuation is not a perfect science and there is...
Read more“Valuation” or the process of assigning a fixed numerical value to the present and potential of a business is considered...
Read moreEquity valuation is about guessing what the value of an organization is expected to be a decade from now or...
Read moreEquity valuation focuses on estimating what the likelihood of the company being a successful enterprise in the future is. Now,...
Read moreThe whole objective of equity valuation is to find mispriced securities. Investors can make abnormal profits when they find securities...
Read moreNow, since we are aware that there are actually multiple models that can be used to value any given company...
Read moreEquity valuation is usually conducted for an entire enterprise. For instance, if we are trying to come up with a...
Read moreDividend discount models are the first type of discounted cash flow models that we will study. The model simply discounts...
Read moreThe dividend discount model also has its fair share of criticism. While some have hailed it as being indisputable and...
Read moreTo understand the dividend discount model, we need to start from the basics. The simplest way to understand the dividend...
Read moreThe next step towards understanding the dividend discount model is to extend the conclusions derived from the single step dividend...
Read moreIn the previous two articles, we saw how information regarding the possible future price, dividends and rate of return expected...
Read moreIn the previous article, we became aware that the value of a stock can be split into two parts. One...
Read moreThe Gordon growth model is a well known and widely known model for valuing equity securities. However, as with every...
Read moreThe dividend discount model is also used to measure the value of preference equity in addition to forecasting the value...
Read moreValuing a corporation is a complex exercise. This is partly because there are multiple ways of looking at the same...
Read moreThe dividend discount model makes a lot of assumptions. Some of these assumptions are not considered to be viable by...
Read moreDividend discount models are based on the assumption of constant or linear growth. However, a mere look at the empirical...
Read moreIn corporate finance we studied that companies had an option when it came to compensating their equity shareholders. They could...
Read moreWe are now aware of the various models that are used for equity valuation like Gordon model, H model, 2...
Read moreWe have studied the various discounted cash flow valuation models in this module. These different models need to be applied...
Read moreWe now have a basic understanding of the concept of sustainable growth rate and how it related to the valuation...
Read moreIn the past few articles, we have studied about the various models that are available to help us predict the...
Read moreWe have discussed various types of dividend payout models. We have discussed the Gordon growth model, the H model, one...
Read moreThe dividend discount models assume that the investors have no control over the payout policy of the firm whatsoever. This...
Read moreFree cash flow models can be further categorized into two types. There are certain kinds of models which pertain to...
Read moreIn the previous article we learned that free cash flow to the firm is closely related to the concept of...
Read moreNow, it’s time to move on to the second metric which can be used to derive the free cash flow...
Read moreIn the previous articles, we learned about how to calculate the cash flow from operations if the cash flow statement...
Read moreWe studied the different methods to calculate the free cash flow to the firm (FCFF) in the previous articles. In...
Read moreIn the previous few articles we understood how to calculate free cash flows which accrue to the firm as a...
Read moreWhile valuing firms, free cash flow has to be calculated over a number of years. Hence, there is a good...
Read moreWe now have a fair understanding of what the concepts of free cash flow to the firm is. We also...
Read moreJust like we have the single stage Free Cash Flow to the Firm (FCFF) model, we also have the Free...
Read moreWe are now aware of how to use the basic single stage models for both free cash flow to the...
Read moreNetflix is one of the largest providers of content in the world. This is amazing given the fact that content...
Read moreDividend discount models are amongst the oldest category of valuation models that have been used by the market. However, there...
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