Foundations of Finance: Equity Valuation Prof. Alex Shapiro 1 Lecture Notes 11 Equity Valuation I. Readings and Suggested Practice Problems II. Valuation and its Uses III. Present Value Models IV. Approaches to Expected Return Determination V. Constant Growth DDM VI. DDM, Investment Opportunities, and Payout Policy VII. The Price/Earnings Ratio VIII. Additional Readings Buzz Words: Dividend Discount Model (DDM), Gordon Model, Intrinsic Value, Discount Rate, Capitalization Rate, Growing Perpetuity, Plowback, ROE, Growth StocksFoundations of Finance: Equity Valuation 2 I. Readings and Suggested Practice Problems BKM, Chapter 18, Sections 1-4, 7. Suggested Problems, Chapter 18: 1-9. Web: www.multexinvestor.com - enter a stock name (e.g. IBM) and view a snapshot of company data, including P/E ratios and
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