《《Equity Investment Analysis TEXT NOTES 1_3》.pptxVIP

Equity Investment Analysis;READING 30 EQUITY VALUATION: APPLICATIONS AND PROCESSES;a define valuation and intrinsic value, and explain sources of perceived mispricing;;b explain the going concern assumption and contrast a going concern value to a liquidation value;;c describe definitions of value, and justify which definition of value is most relevant to public company valuation; ;d describe applications of equity valuation; ;e describe questions that should be addressed in conducting an industry and competitive analysis (1/2); ;e describe questions that should be addressed in conducting an industry and competitive analysis (2/2); ;f contrast absolute and relative valuation models, and describe examples of each type of model (1/2); ;f contrast absolute and relative valuation models, and describe examples of each type of model (2/2); ;g describe sum-of-the-parts valuation, and explain a conglomerate discount; ;h explain broad criteria for choosing an appropriate approach for valuing a given company. ;READING 31  RETURN CONCEPTS;a distinguish among realized holding period return, expected holding period return, required return, return from convergence of price to intrinsic value, discount rate, and internal rate of return (1/4); The holding period rate of return (for short, the holding period return ) is the return earned from investing in an asset over a specified time period.;a distinguish among realized holding period return, expected holding period return, required return, return from convergence of price to intrinsic value, discount rate, and internal rate of return (2/4); A required rate of return (for short, required return ) is the minimum level of expected return that an investor requires in order to invest in the asset over a specified time period, given the asset ’ s riskiness. It represents the opportunity cost for investing in the asset — the highest level of expected return available elsewhere from investments of similar risk. The required rate of re