投资学课件chap13.ppt

CHAPTER 13 Equity Valuation Fundamental Stock Analysis: Models of Equity Valuation Basic Types of Models Balance Sheet Models Dividend Discount Models Price/Earnings Ratios Estimating Growth Rates and Opportunities Models of Equity Valuation Valuation models use comparables Look at the relationship between price and various determinants of value for similar firms The internet provides a convenient way to access firm data. Some examples are: EDGAR F Table 13.1 Microsoft Corporation Financial Highlights Valuation Methods Book value Market value Liquidation value Replacement cost Expected Holding Period Return The return on a stock investment comprises cash dividends and capital gains or losses Assuming a one-year holding period Required Return CAPM gave us required return: If the stock is priced correctly Required return should equal expected return Intrinsic Value and Market Price Market Price Consensus value of all potential traders Current market price will reflect intrinsic value estimates This consensus value of the required rate of return, k, is the market capitalization rate Trading Signal IV MP Buy IV MP Sell or Short Sell IV = MP Hold or Fairly Priced General Model V0 = Value of Stock Dt = Dividend k = required return No Growth Model Stocks that have earnings and dividends that are expected to remain constant Preferred Stock No Growth Model: Example E1 = D1 = $5.00 k = .15 V0 = $5.00 / .15 = $33.33 Constant Growth Model g = constant perpetual growth rate Constant Growth Model: Example E1 = $5.00 b = 40% k = 15% (1-b) = 60% D1 = $3.00 g = 8% V0 = 3.00 / (.15 - .08) = $42.86 Stock Prices and Investment Opportunities g = growth rate in dividends ROE = Return on Equity for the firm b = plowback or retention percentage rate (1- dividend payout percentage rate) Figure 13.1 Dividend Growth for Two Earnings Reinvestment Policies Present Value of Growth Opportunities If the stock price equals its IV, growth rate is sustained, the stock should s