《投资分析与组合管理 Frank K. Reilly》ch10.pptVIP

Lecture Presentation Software to accompanyInvestment Analysis and Portfolio ManagementSeventh Editionby Frank K. Reilly Keith C. Brown Chapter 10 - An Introduction to Security Valuation Questions to be answered: What are the two major approaches to the investment process? What are the specifics and logic of the top-down (three-step) approach? What empirical evidence supports the usefulness of the top-down approach? When valuing an asset, what are the required inputs? Chapter 10 - An Introduction to Security Valuation After you have valued an asset, what is the investment decision process? How do you determine the value of bonds? How do you determine the value of preferred stock? What are the two primary approaches to the valuation of common stock? Chapter 10 - An Introduction to Security Valuation Under what conditions is it best to use the present value of cash flow approach for valuing a company’s equity? Under what conditions is it best to use the present value of cash flow approach for valuing a company’s equity? How do you apply the discounted cash flow valuation approach and what are the major discounted cash flow valuation techniques? Chapter 10 - An Introduction to Security Valuation What is the dividend discount model (DDM) and what is its logic? What is the effect of the assumptions of the DDM when valuing a growth company? How do you apply the DDM to the valuation of a firm that is expected to experience temporary supernormal growth? How do you apply the relative valuation approach? Chapter 10 - An Introduction to Security Valuation What are the major relative valuation ratios? How can you use the DDM to develop an earnings multiplier model? What does the DDM model imply are the factors that determine a stock’s P/E ratio? What two general variables need to be estimated in any of the cash flow models and will affect all of the relative valuation models? Chapter 10 - An Introduction to Security Valuation How do you estimate the major inputs to the