FINA 4310 Chapter Notes - Chapter 13: Financial Technology, Operating Margin, Technical Analysis
Document Summary
Chapter 13: 13. 1 equity valuation, equity analysts aim to find mispriced stocks, fundamental vs. technical analysis, profit-motivated research keeps markets efficient, thought. Intrinsic value: present value of firm"s expected future net cash flows discounted by required ror, req. If s < v0 then positive expected a. If s > v0 then negative expected a: note: In finance: important to distinguish between: promised return, expected return (k, later we will learn how k is determined by: capm. If roc greater than or equal to k then firm earns positive eva (where k = wacc: 13. 3 dividend discount models (ddm, zero growth ddm. Free cash flow to the firm (fcff: fcff = ebit(1-t) + depreciation capital expenditures increase in nwc, 2. Free cash flow to equity holders (fcfe: fcff interest expense (1-t) + increases in net debt, 13. 5 free cash flow valuation approaches, comparing valuation models, model values differ in practice, differences stem from simplifying assumptions.
