ACCT3013 Lecture Notes - Lecture 6: Efficient-Market Hypothesis, Cash Flow Statement, Dividend Discount Model
Document Summary
Terminal and going concern investments: terminal investment: has a maturity date, has a predefined rate of risk and return. Valuation of terminal investments: periodic payoffs: returns a steady cash flow, terminal payoff: get a cash flow at (cid:1846). Valuation of going concern investments: periodic payoffs: may or may not return steady cash, terminal payoff: get a cash flow payout (ending dividend) plus capital gain (loss) (the change price) when sell the investment. To calculate the present value of these investments, we need an estimate for periodic payoffs; terminal value; and discount rate. Equity financing: efficient markets (cid:1842)(cid:2869)+(cid:1856)(cid:2869) (cid:1842)(cid:2869)+(cid:1856)(cid:2869) (cid:1842)(cid:2868) (cid:1842)(cid:2869)+(cid:1856)(cid:2869) (cid:1842)(cid:2868) (cid:1842)(cid:2868) (cid:1831)(cid:4666)(cid:1842)(cid:2869)(cid:4667)+(cid:1831)(cid:4666)(cid:1856)(cid:2869)(cid:4667) (cid:1842)(cid:2868) (cid:1831)(cid:4666)(cid:1842)(cid:2869)(cid:4667)+(cid:1831)(cid:4666)(cid:1856)(cid:2869)(cid:4667) (cid:1842)(cid:2868) (cid:1842)(cid:2868) (cid:1831)(cid:4666)(cid:1842)(cid:2869)(cid:4667)+(cid:1831)(cid:4666)(cid:1856)(cid:2869)(cid:4667) (cid:1842)(cid:2868) (cid:1842)(cid:2868) (cid:1842)(cid:2869)+(cid:1856)(cid:2869) (cid:1842)(cid:2868) (cid:1842)(cid:2868: shares are issued at market price value per share remains the same as firm has done nothing yet with new finance, so both existing and new shareholders are equal.
