PPT-STOCK VALUATION PART - I

Notes Compiled by Dr RUCHIKA KAURA Assistant Professor Department of Commerce INVESTING IN STOCK MARKETS Important Questions What do you mean by valuation of stock What are the objectives of stock valuation. (chapter . 10). Present value approach. Capitalization of expected income. Intrinsic value based on the discounted value of the expected stream of cash flows. Multiple of earnings approach. Valuation relative to a financial performance measure. www.rothmanandcompany.com.  steve@rothmanandcompany.com. (310) 993-9664. Stephen P. Rothman, Esq.. Startup Equity Allocations, . Cap Tables, . Pricing Negotiations. UCLA Office of Intellectual . Property. Riley J. Busenlener, CPA/ABV, ASA, JD. The Report. Cover of the report. Math. Signatories. Standards. Assumptions. The Cover of the Repot. Subject Entity. Valuation Date. Standard of Value. Appraisers. Stock Valuation . Fundamental. Analysis – looks at financials, product, mgt., history, etc.. PE ratio – . Price / E.P.S.. Zero-Growth Dividend (preferred stock). Constant Growth Dividend (DCF). Nonconstant. ch14. Company Analysis vs. Stock Valuation. Good companies are not necessarily good . investments. Why?. Compare the intrinsic value of a stock to its market . value. Stock of a great company may be . Jiajun. Chen. 364657. Value the . cash flows . or . earnings. . under new ownership. Value the . dividends. . under the existing management. Value the . assets. MAX. MIN. Introduction. Ask: if stock market is . Investment decision process. Determine the required rate of return. Evaluate the investment to determine if its market price is consistent with your required rate of return. Estimate the value of the security based on its expected cash flows and your required rate of return. MBA Finance 571. Week 2. Stock Valuation and Analysis. 2. Stock Valuation and Analysis. 3. Stock Valuation and Analysis. 4. Stock Valuation and Analysis. 5. 5. The student will find answers for:. a. Enterprise Value. Stock Market Equilibrium. 2. Topics in Chapter. Features of common stock. Valuing common stock. Preferred stock. Stock market equilibrium. Efficient markets hypothesis. Implications of market efficiency for financial decisions. Alexander Motola, CFA. Alexander Motola, 2013. 1. What is “Valuation”?. It is NOT the stock price. It is NOT the market capitalization. Is a $50 stock expensive?. What if it was $25 3 months ago?. Zagg (NASDAQ: ZAGG) April 3, 2014 1 Jason Chan Michael DeRenzo Rodrigo Serna Agenda Introduction Company Overview Macroeconomic Outlook Relevant Stock Market Prospects Financial Analysis Valuation Cautionary Note. Stock valuation is often a topic dedicated to one or more 3-credit elective courses.. FINC852 at UD is a stock valuation and portfolio theory course.. Think of this chapter as a “scratching the surface” of the topic, or as the “tip of the iceberg.”. Assume a perpetuity that pays an annual coupon C with a required return of R. Show a graph that illustrates how the price of the perpetuity changes over time.. 1. Discrete versus continuous time.. Debt. Cash Flow Models of Equity Valuation.. Dividend Discount Models. Accrual Discount Models . Determining the Value Drivers. Cases in Valuation Model Analysis. Reading: SAIS, sec. 8.1, 8.2 and 8.3 and .