Chap018 Equity Valuation Models 《投资学》博迪 第九版 英文知识讲稿.pptVIP

INVESTMENTS | BODIE, KANE, MARCUS INVESTMENTS | BODIE, KANE, MARCUS Copyright ? 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin CHAPTER 18 Equity Valuation Models Valuation: Fundamental Analysis Fundamental analysis models a company’s value by assessing its current and future profitability. The purpose of fundamental analysis is to identify mispriced stocks relative to some measure of “true” value derived from financial data. Balance Sheet Models Dividend Discount Models (DDM) Price/Earnings Ratios Free Cash Flow Models Models of Equity Valuation Valuation by Comparables Compare valuation ratios of firm to industry averages. Ratios like price/sales are useful for valuing start-ups that have yet to generate positive earnings. Limitations of Book Value Book values are based on historical cost, not actual market values. It is possible, but uncommon, for market value to be less than book value. “Floor” or minimum value is the liquidation value per share. Tobin’s q is the ratio of market price to replacement cost. The intrinsic value (IV) is the “true” value, according to a model. The market value (MV) is the consensus value of all market participants Trading Signal: IV MV Buy IV MV Sell or Short Sell IV = MV Hold or Fairly Priced Intrinsic Value and Market Price V0 =current value; Dt=dividend at time t; k = required rate of return The DDM says the stock price should equal the present value of all expected future dividends into perpetuity. Dividend Discount Models (DDM) Constant Growth DDM g=dividend growth rate No growth case Value a preferred stock paying a fixed dividend of $2 per share when the discount rate is 8%: Example 18.1 Preferred Stock and the DDM Example 18.2 Constant Growth DDM A stock just paid an annual dividend of $3/share. The dividend is expected to grow at 8% indefinitely, and the market capitalization rate (from CAPM) is 14%. DDM Implications The constant-growth rate DDM implies that a stock’s value will be g