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Chapter 13 Equity Valuation Fundamental Stock Analysis: Models of Equity Valuation Basic Types of Models Balance Sheet Models Dividend Discount Models Price/Earning Ratios Estimating Growth Rates and Opportunities Intrinsic Value and Market Price Intrinsic Value Self assigned Value Variety of models are used for estimation Market Price Consensus value of all potential traders Trading Signal IV MP Buy IV MP Sell or Short Sell IV = MP Hold or Fairly Priced Dividend Discount Models:General Model V0 = Value of Stock Dt = Dividend k = required return No Growth Model Stocks that have earnings an