This article explains the meaning of equity valuation. It also explains the need, importance and the process followed while conducting an equity valuation.
Articles on Equity Valuation
This article provides the basic concepts related to valuation. It provides a definition for the three different types of values. It also compares and contrasts these values to explain the difference amongst them.
This article explains the applications of equity valuation. The applications in varied fields like portfolio management companies and investment banks have been described in this article.
This article explains the role of assumptions in equity valuation. It lists down some of the common assumptions which are explicitly and implicitly listed in the valuation report.
This article explains the role of qualitative factors in equity valuation. It also explains how these factors play a massive role in influencing the valuation of any company.
This article explains the role of qualitative factors in equity valuation. It also explains how these factors play a massive role in influencing the valuation of any company.
This article explains the two broad approaches to equity valuation. It provides a brief overview and introduction regarding the type of models that are used in absolute as well as relative valuation approaches.
This article tells the students about how to choose between multiple valuation models. It also provides examples of different scenarios where different valuation models may be useful.
This article explains the concept of sum of the parts valuation. It also explains the concept of conglomerate discount and the debate regarding its existence.
This article provides a basic introduction and lists down the advantages of the dividend discount model. It also explains the type of investor groups that prefer this model and the reasons behind their preference.
This article explains the disadvantages of dividend discount model. This helps us understand the situations when we should not apply this model.
This article explains the concept of single period dividend discount model. It also explains the same with the help of a solved example.
This article explains the concept of two period dividend discount model. An illustration has also been provided to facilitate understanding.
This article explains in detail the generic dividend discount model. It also explains why dividends remain the sole factor behind the valuation of any stock.
This article introduces the concept of Gordon growth model. This concept is one of the most important ones in equity valuation. Hence illustrations have been provided to simplify the calculation.
This article lists down the pros and cons of Gordon growth model. The idea is to give the student a feel of what the possible pitfalls associated with this model could be.
This article explains how the dividend discount model can be used for the valuation of preference shares. The logic behind the process has been clearly explained with the help of illustrations.
This article explains the link between dividend discount model and present value of growth opportunities i.e. two seemingly unrelated concepts. It also explains how this link proves useful while conducting the valuation.
This article provides information regarding the H model which is used in equity valuation. An illustration is also provided to facilitate better understanding by the students.
This article explains how the growth stage at which the company currently is influences the selection of the appropriate model which can be used to value it.
This article provides information about how companies which use share repurchases programs are to be valued. The focus is on distinguishing this valuation approach from the dividend discount model.
This article helps us understand the concept as well as the calculation behind implied dividend growth rate.
This article explains the concept of sustainable growth rate. It also explains how this concept is extremely important and useful when it comes to valuation.
This article explains the relationship between the famous and important Du-Pont ratio analysis and the concept of sustainable growth rate. It also explains how the concepts interact to affect the valuation of the firm.
This article explains why spreadsheets have become an important tool in equity valuation. It also lists some of the benefits that are derived from their usage.
This article explains the multiple methods which can be used for projecting future dividends. It also explains the pros and cons associated with the usage of each method.
This article contrasts that dividend discount models with free cash flow models. It brings out the ownership perspective implied in the two models and also highlights their advantages and disadvantages.
This article compares and contrasts the free cash flow to the firm with the concept of free cash flow to equity. The differences are subtle and potentially confusing, thereby needing clarification.
This article explains the different types of cases that may arise while calculating net fixed capital investment which is used to derive the free cash flow to the firm.
This article explains the step by step procedure to calculate the free cash flow to the firm by using cash flow from operations as an input. An illustration is provided to facilitate better understanding.
In this article we discuss how to derive the free cash flow to the firm if we are given EBIDTA or EBIT as the starting point. The step by step procedure has been discussed.
This article explains the different methods of calculating free cash flow to equity (FCFE). The concept of net borrowing and its application have also been explained.
This article explains how preferred equity needs to be treated while calculating free cash flows to the firm as well as to equity. The adjustments that need to be made have been described in detail.
This article provides information about which changes in the financing policy are relevant when calculating free cash flow to the firm and free cash flow to equity.
This article introduces the single stage free cash flow to the firm model. It explains how this model can be used for valuation and what the assumptions are when this model is used.
This article explains the single stage free cash flow to equity valuation model in detail. It outlines the possible sources of confusion between this model and other similar model.
This article explains the basis on which multiple models of free cash flow valuation stand. It explains the core assumptions varying which can provide us the different free cash flow based valuation models.
This article explains the rise of a subscription-based business model. It also lists the various metrics that are commonly used by investors to evaluate the growth potential of a subscription-based company.
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