Ch 9 stocks Part I-1

Ch 9 stocks Part I-1 - Chapter 9 Stock Valuation Part I 2

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Unformatted text preview: Chapter 9 Stock Valuation Part I 2 http://www.nytimes.com/2010/03/12/business/global/12bank.html?scp=13&sq=Bonds%20in%20China&st=cse Click here 3 http://www.nytimes.com/2010/03/19/business/global/19ipo.html?ref=global Click here 4 http://seekingalpha.com/article/186327-bonds-for-the-long-run 5 http://seekingalpha.com/article/189848-long-term-stock-outperformance-vs-bonds-mainly-due-to-dividends-not-capital-appreciation 6 c http://www.cnbc.com/id/34510635 Click here 7 Stocks Videos c February 11, 2010 – Credit Spreads important for stock markets c http://www.ft.com/cms/bfba2c48-5588-11dc-b971-0000779fd2ac.html?_i_referralObject=14385031&fromSearch=n c The Top Mistakes that Traders Make c http://www.minyanville.com/audiovideo/8319/1/45 8 Stocks can make you happy 9 Stocks can make you not so happy 10 FINA 111 – Part II FINA 111 Part II Valuation of Securities Measuring and Pricing Risk Financing Policy Bonds Ch 6 Stocks Ch 9 Risk-Return Tradeoff Ch 10 Risk Diversification and Risk Pricing Ch 11 Cost of Capital Ch 12 Debt Policy Ch 15 Payout Policy Ch 16 Done Next 11 Firm Valuation Firm Valuation Measuring and Pricing Risk Ch 10,11 Asset Valuation Ch 4,7,8,18 Financing Policies: Cost of Capital Ch 12 Capital Structure Ch 15 Payout Policy Ch 16 Securities Valuation: Bonds Ch 6 Stocks Ch 9 External Factors 12 Stock Pricing Pricing Models: DDM, Payout, FCF, Relative Valuation models Market Price of Stock Supply (Company) Factors Macro Factors: •Economic situation •Regulatory environment •Market condition (supply and demand) Micro Factors: •Industry & Firm situation Demand (Investor) Factors •Market Efficiency – Information and competition – Ch 9 •Risk- Risk Aversion, Systematic risk, Risk-Return Tradeoff, Risk Pricing – Ch 10, 11 13 Stock Valuation – Outline 1 . Stock Basics 2. Intrinsic Valuation of Stock 2A. The Dividend-Discount Model 2A1. Estimating Dividends in the Dividend- Discount Model (3 ways) 2B. Total Payout Model 2C. Free Cash Flow Valuation Model 3. Valuation Based on Comparable Firms 4. Information, Competition, and Stock Prices 14 Stock Valuation Approaches Stock Valuation Cash Flow Valuation Dividend Discount Model Total Payout Model Discounted Free Cash Model Relative Valuation Efficient Market Hypothesis Estimating Dividends (3 ways) 15 Learning Objectives c Value a stock as the present value of its expected future dividends r Understand the tradeoff between dividends and growth in stock valuation c Value a stock as the present value of either the company’s total payout or its free cash flows c Value a stock by applying common multiples based on the values of comparable firms c Compare and contrast different approaches to valuing a stock c Understand how information is incorporated into stock prices through competition in efficient markets 16 Stock Valuation – Outline 1 . Stock Basics 2. Intrinsic Valuation of Stock 2A. The Dividend-Discount Model 2A1. Estimating Dividends in the Dividend- Discount Model (3 ways)...
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Ch 9 stocks Part I-1 - Chapter 9 Stock Valuation Part I 2

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