Unit 3: Dividend Discount Model and Discounted Cash Flow Valuations
Estimating Discount Rates
Cost of Equity and Cost of Capital Estimating the appropriate discount rate is crucial for any va...
Betas
Types and Calculation Beta is a measure of a stock's systematic risk, or its sensitivity to movem...
Numericals
Numerical Examples: Estimating Discount Rates and Betas These examples illustrate how to calculat...
Dividend Discount Models (DDM)
Two-Stage and Three-Stage Dividend Discount Models (DDMs) are valuation models that estimate the ...
Numerical Example
Two-Stage Dividend Discount Model Problem: We want to value a stock, "GrowthCo," using a two-stag...
Numerical Example
Three-Stage Dividend Discount Model Problem: We want to value a stock, "EvolvingTech," using a th...
Issues in Using the Dividend Discount Model (DDM)
While the Dividend Discount Model (DDM) is a theoretically sound valuation method, its practical...
Free Cash Flow to Equity (FCFE) Discount Models
Free Cash Flow to Equity (FCFE) Discount Models are valuation models that estimate the intrinsic...
Numerical Examples
FCFE Valuation Models These examples illustrate how to value a stock using the Constant Growth FC...
FCFE Valuation vs. Dividend Discount Model Valuation
Both Free Cash Flow to Equity (FCFE) valuation and Dividend Discount Model (DDM) valuation are e...
Firm Valuation: Free Cash Flow to the Firm (FCFF)
Firm valuation, also known as enterprise valuation, aims to determine the total value of a compa...
Numerical Example
Firm Valuation using FCFF Problem: We want to value a company, "GlobalTech," using the FCFF appro...
Firm Valuation Approaches
The Cost of Capital Approach, The Adjusted Present Value (APV) Approach, Cost of Capital Vs. APV ...
Applied Valuation of a Company using Excel
This topic focuses on the practical application of valuation principles, using Excel to perform ...
Example excel file
Company_Valuation_Detailed.xlsx