08 - Equity Valuation

The net worth of common equity according to a firm's balance sheet.

Net amount that can be realised by selling the assets of a firm and paying off the debt.

Cost to replace a firm's assets.

Ratio of market value of the firm to replacement cost.

The present value of a firm's expected future net cash flows discounted by the required rate of return.

The market-consensus estimate of the appropriate discount rate for a firm's cash flows.

A formula for the intrinsic value of a firm equal to the present value of all expected future dividends.

A form of the dividend discount model that assumes dividends will grow at a constant rate

Percentage of earnings paid out as dividends.

The proportion of the firm's earnings that is reinvested in the business (not paid out as dividends).

Net present value of a firm's future investments.

Dividend discount model in which dividend growth is assumed to level off only at some future date.

The ratio of a stock's price to its earnings per share.

Ratio of P/E multiple to earnings growth rate.

The practice of using flexibility in accounting rules to improve the apparent profitability of the firm.