KIC000037 - [, Fundamental Analysis Fundamental Analysis...

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[, Fundamental Analysis Fundamental Analysis Macroeconomic and Industry Analysis - Looking at the environment in which the firm operates - Beta lumps all systematic risk into a single measure - However, some firms or industries may be more sensitive to certain sources of systematic risk than others (e.g. interest rate risk, exchange rate risk, or political risk) Fundamental Analysis Determining proper stock prices by analyzing earnings and dividend prospects of the firm, expectations of future interest rates, and risk. If the estimated value exceeds the stock price, the fundamental analyst would recommend buying the stock. Fundamental analysis involves - Macroeconomic and industry analysis - Individual firm analysis . Fundamental Analysis Firm-Specific Analysis - Use financial statements to assess the health and earnings prospects of the firm - Estimate future earnings and dividends - Determine the appropriate risk premium for the finn - Estimate current value using discounted cash flow
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This note was uploaded on 09/07/2011 for the course FINANCE 320 taught by Professor Sapp during the Fall '10 term at Iowa State.

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KIC000037 - [, Fundamental Analysis Fundamental Analysis...

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