Damodaran on Valuation_ Security Analysis for Investment and Corporate Finance ( PDFDrive )
The stock can be valued using the H model: Thestockwastradingat£5.84inNovember2005,makingit close to fairly valued. Three-Stage ...
ga= Growth rate in high-growth phase (lastsn1 periods) gn= Growth rate in stable phase Πa= Payout ratio in high-growth phase Πn= ...
4 areexpectedtocontinuegrowingatthoseratesforaninitial period,butareexpectedtostartdeclininggraduallytowarda stablerateasthefirm ...
Afteryear5,weassumethatthebetawilldeclinetoward 1 in stablegrowth(whichwilloccurafterthe10thyear)andthat theriskpremiumforIndiaw ...
stable-growthperiodvalues.Sincethecostsofequitychange overtime,thecumulatedcostofequityisusedtocalculatethe presentvalueofdivide ...
sustainabilityofthebank’scurrenthighreturnonequity.If competitionarrivessoonerthanexpected,thevalueofequity willdrop drastically ...
gettothelatter,wehavetomakeassumptionsaboutcapital expenditures,depreciation,andworkingcapital.Togettothe former, we can begin w ...
assumingthatfirmscancontinuetodrawonexternalfunding to fund the dividend deficit in perpetuity. Applicability Notwithstandingits ...
regulatorycapitalratiosarecomputedonthebasisofbook value of equity. Insummary,then,thedividenddiscountmodelhasfarmore applicabil ...
been very strong, especially in the 1990s. By early 2000, more cash was being returned to stockholders in stock buybacks than in ...
unlikedividends,arenotsmoothedout.Inotherwords,afirm maybuyback$3billioninstockinoneyearandnotbuyback stockforthenextthreeyears. ...
In November 2005, ExxonMobil had the largest market capitalizationofanycompanyintheworld.Withthesurgein cash flowsgeneratedbyris ...
Atitsprevailingmarketpriceof$60ashare(inNovember 2005), ExxonMobil looks undervalued. Valuing Entire Markets or Sectors Allourex ...
Considerasimpleexample.Assumethatyouhaveanindex tradingat 700 andthattheaveragedividendyieldofstocksin the index is 5 percent. E ...
Theexpecteddividends(andstockbuybacks)ontheindexfor the next five years can be estimated from the current dividends and expected ...
model.Infact,onewaytodescribeafreecashflowtoequity model is that it represents a model where we discount potential dividends rat ...
TheFCFEmodeltreatsthestockholderinapubliclytraded firmastheequivalentoftheownerofaprivatebusiness.The lattercanlayclaimonallcash ...
Thereturnonequitymayalsohavetobemodifiedtoreflect thefactsthattheconventionalmeasureofthereturnincludes interest income from cas ...
Constant Growth FCFE Model TheconstantgrowthFCFEmodelisdesignedtovaluefirms thataregrowingatastablerateandarehenceinsteadystate. ...
1.Youcanusethetypicalreinvestmentratesforfirmsinthe industrytowhichthefirmbelongs.Asimplewaytodothisis tousetheaveragecapitalexp ...
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