Reading 17

Equity Valuation: Applications and Processes

1 modules 13 min
0/1

Exam Focus

This review is simply an introduction to the process of equity valuation and its application. Many of the concepts and techniques introduced are developed more fully in subsequent topic reviews. Candidates should be familiar with the concepts introduced here, including intrinsic value, analyst perception of mispricing, going concern versus liquidation value, and the difference between absolute and relative valuation techniques.

Modules

  1. Module 17.1Equity Valuation: Applications and ProcessesDefine valuation and intrinsic value and explain sources of perceived mispricing. · Explain the going concern assumption and contrast a going concern value to a liquidation value. · Describe definitions of value and justify which definition of value is most relevant to public company valuation. · Describe applications of equity valuation. · Describe questions that should be addressed in conducting an industry and competitive analysis. · Contrast absolute and relative valuation models and describe examples of each type of model. · Describe sum of the parts valuation and conglomerate discounts. · Explain broad criteria for choosing an appropriate approach for valuing a given company.13 min · 8 LOS
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