Find Flashcards
Why It Works
More
Educators
Businesses
Academy
About

Brainscape's Knowledge Genome^TM

Browse over 1 million classes created by top students, professors, publishers, and experts.

Entrance Exams
Professional Certifications
Foreign Languages
Medical & Nursing
Science
English
Humanities & Social Studies
Mathematics
Law
Vocations
Health & Fitness
Business & Finance
Technology & Engineering
Food & Beverage
Fine Arts
Random Knowledge

See full index

L2 37 Market-Based Valuation: Price and Enterprise Value Multiples > r evaluate whether a stock is overvalued, fairly valued, or undervalued based on comparisons of multiples. > Flashcards

r evaluate whether a stock is overvalued, fairly valued, or undervalued based on comparisons of multiples. Flashcards

L2 37 Market-Based Valuation: Price and Enterprise Value Multiples (18 decks)

a distinguish between the method of comparables and the method based on forecasted fundamentals as approaches to using price multiples in valuation, and explain economic rationales for each approach;

b calculate and interpret a justified price multiple;

c describe rationales for and possible drawbacks to using alternative price multiples and dividend yield in valuation;

d calculate and interpret alternative price multiples and dividend yield;

e calculate and interpret underlying earnings, explain methods of normalizing earnings per share (EPS), and calculate normalized EPS;

f explain and justify the use of earnings yield (E/P);

g describe fundamental factors that influence alternative price multiples and dividend yield;

h calculate and interpret the justified price-to- earnings ratio (P/E), price-to- book ratio (P/B), and price-to- sales ratio (P/S) for a stock, based on forecasted fundamentals;

i calculate and interpret a predicted P/E, given a cross-sectional regression on fundamentals, and explain limitations to the cross-sectional regression methodology;

j evaluate a stock by the method of comparables, and explain the importance of fundamentals in using the method of comparables;

k calculate and interpret the P/E-to- growth ratio (PEG), and explain its use in relative valuation;

l calculate and explain the use of price multiples in determining terminal value in a multistage discounted cash flow (DCF) model;

m explain alternative definitions of cash flow used in price and enterprise value (EV) multiples, and describe limitations of each definition;

n calculate and interpret EV multiples, and evaluate the use of EV/EBITDA;

o explain sources of differences in cross-border valuation comparisons;

p describe momentum indicators and their use in valuation;

q explain the use of the arithmetic mean, the harmonic mean, the weighted harmonic mean, and the median to describe the central tendency of a group of multiples;

r evaluate whether a stock is overvalued, fairly valued, or undervalued based on comparisons of multiples.

Key Links
Subjects
Company
- About Us
- Earn Money!
- Academy
- Swag Shop
- Contact
- Terms
- Podcasts
Find Us

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions