Download or read book Implied Growth Horizons and the Cost of Equity written by Job Mangelmans and published by . This book was released on 2016 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: We introduce a straightforward method to estimate the implied cost of equity, allowing growth horizons to fluctuate both cross-sectionally and through time. Our results show substantial dispersion of implied growth horizons in cross-sections and time-series for US firms in the years 1988-2013. The cross-sectional difference in our implied cost of equity is a predictor of relative future returns. The return of an investment strategy based on the implied cost of equity improves, when expected growth horizons are allowed to fluctuate through time. Our findings suggest that valuation models using fixed growth horizons can be improved by the use of implied growth horizons.

Download or read book Estimating the Cost of Capital Implied by Market Prices and Accounting Data written by Peter Easton and published by Now Publishers Inc. This book was released on 2009 with total page 148 pages. Available in PDF, EPUB and Kindle. Book excerpt: Estimating the Cost of Capital Implied by Market Prices and Accounting Data focuses on estimating the expected rate of return implied by market prices, summary accounting numbers, and forecasts of earnings and dividends. Estimates of the expected rate of return, often used as proxies for the cost of capital, are obtained by inverting accounting-based valuation models. The author describes accounting-based valuation models and discusses how these models have been used, and how they may be used, to obtain estimates of the cost of capital. The practical appeal of accounting-based valuation models is that they focus on the two variables that are commonly at the heart of valuations carried out by equity analysts -- forecasts of earnings and forecasts of earnings growth. The question at the core of this monograph is -- How can these forecasts be used to obtain an estimate of the cost of capital? The author examines the empirical validity of the estimates based on these forecasts and explores ways to improve these estimates. In addition, this monograph details a method for isolating the effect of any factor of interest (such as cross-listing, fraud, disclosure quality, taxes, analyst following, accounting standards, etc.) on the cost of capital. If you are interested in understanding the academic literature on accounting-based estimates of expected rate of return this monograph is for you. Estimating the Cost of Capital Implied by Market Prices and Accounting Data provides a foundation for a deeper comprehension of this literature and will give a jump start to those who have an interest in these topics. The key ideas are introduced via examples based on actual forecasts, accounting information, and market prices for listed firms, and the numerical examples are based on sound algebraic relations.

Download or read book Equity Asset Valuation written by Jerald E. Pinto and published by John Wiley & Sons. This book was released on 2020-01-29 with total page 720 pages. Available in PDF, EPUB and Kindle. Book excerpt: Navigate equity investments and asset valuation with confidence Equity Asset Valuation, Fourth Edition blends theory and practice to paint an accurate, informative picture of the equity asset world. The most comprehensive resource on the market, this text supplements your studies for the third step in the three-level CFA certification program by integrating both accounting and finance concepts to explore a collection of valuation models and challenge you to determine which models are most appropriate for certain companies and circumstances. Detailed learning outcome statements help you navigate your way through the content, which covers a wide range of topics, including how an analyst approaches the equity valuation process, the basic DDM, the derivation of the required rate of return within the context of Markowitz and Sharpe's modern portfolio theory, and more.

Download or read book Cost of Capital written by Shannon P. Pratt and published by John Wiley & Sons. This book was released on 2010-11-04 with total page 794 pages. Available in PDF, EPUB and Kindle. Book excerpt: Praise for Cost of Capital, Fourth Edition "This book is the most incisive and exhaustive treatment of this critical subject to date." —From the Foreword by Stephen P. Lamb, Esq., Partner, Paul, Weiss, Rifkind, Wharton & Garrison LLP, and former vice chancellor, Delaware Court of Chancery "Cost of Capital, Fourth Edition treats both the theory and the practical applications from the view of corporate management and investors. It contains in-depth guidance to assist corporate executives and their staffs in estimating cost of capital like no other book does. This book will serve corporate practitioners as a comprehensive reference book on this challenging topic in these most challenging economic times." —Robert L. Parkinson Jr., Chairman and Chief Executive Office, Baxter International Inc., and former dean, School of Business Administration and Graduate School of Business, Loyola University of Chicago "Shannon Pratt and Roger Grabowski have consolidated information on both the theoretical framework and the practical applications needed by corporate executives and their staffs in estimating cost of capital in these ever-changing economic times. It provides guidance to assist corporate practitioners from the corporate management point of view. For example, the discussions on measuring debt capacity is especially timely in this changing credit market environment. The book serves corporate practitioners as a solid reference." —Franco Baseotto, Executive Vice President, Chief Financial Officer, and Treasurer, Foster Wheeler AG "When computing the cost of capital for a firm, it can be fairly said that for every rule, there are a hundred exceptions. Shannon Pratt and Roger Grabowski should be credited with not only defining the basic rules that govern the computation of the cost of capital, but also a road map to navigate through the hundreds of exceptions. This belongs in every practitioner's collection of must-have valuation books." —Aswath Damodaran, Professor, Stern School of Business, New York University "Pratt and Grabowski have done it again. Just when you thought they couldn't possibly do a better job, they did. Cost of Capital, Fourth Edition is a terrific resource. It is without a doubt the most comprehensive book on this subject today. What really distinguishes this book from other such texts is the fact that it is easy to read—no small feat given the exhaustive and detailed research and complicated subject matter. This book makes you think hard about all the alternative views out there and helps move the valuation profession forward." —James R. Hitchner, CPA/ABV/CFF, ASA, Managing Director, Financial Valuation Advisors; CEO, Valuation Products and Services; Editor in Chief, Financial Valuation and Litigation Expert; and President, Financial Consulting Group "The Fourth Edition of Cost of Capital continues to be a 'one-stop shop' for background and current thinking on the development and uses of rates of return on capital. While it will have an appeal for a wide variety of constituents, it should serve as required reading and as a reference volume for students of finance and practitioners of business valuation. Readers will continue to find the volume to be a solid foundation for continued debate and research on the topic for many years to come." —Anthony V. Aaron, Americas Leader, Quality and Risk Management, Ernst & Young Transaction Advisory Services

Download or read book The Cost of Capital written by Seth Armitage and published by Cambridge University Press. This book was released on 2005-03-17 with total page 380 pages. Available in PDF, EPUB and Kindle. Book excerpt: A thorough exposition of the theory relating to the cost of capital.

Download or read book Cost of Capital Website written by Shannon P. Pratt and published by John Wiley & Sons. This book was released on 2014-04-21 with total page 1344 pages. Available in PDF, EPUB and Kindle. Book excerpt: A one-stop shop for background and current thinking on the development and uses of rates of return on capital Completely revised for this highly anticipated fifth edition, Cost of Capital contains expanded materials on estimating the basic building blocks of the cost of equity capital, the risk-free rate, and equity risk premium. There is also discussion of the volatility created by the financial crisis in 2008, the subsequent recession and uncertain recovery, and how those events have fundamentally changed how we need to interpret the inputs to the models we use to develop these estimates. The book includes new case studies providing comprehensive discussion of cost of capital estimates for valuing a business and damages calculations for small and medium-sized businesses, cross-referenced to the chapters covering the theory and data. Addresses equity risk premium and the risk-free rate, including the impact of Federal Reserve actions Explores how to use Morningstar's Ibbotson and Duff Phelps Risk Premium Report data Discusses the global cost of capital estimation, including a new size study of European countries Cost of Capital, Fifth Edition puts an emphasis on practical application. To that end, this updated edition provides readers with exclusive access to a companion website filled with supplementary materials, allowing you to continue to learn in a hands-on fashion long after closing the book.

Download or read book The Degrees of Freedom Problem and Implied Cost of Equity Capital written by Abdul H. Rahman and published by . This book was released on 2007 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recently, Easton and Sommers (2006) provide evidence of a pervasive upward bias of about 3.5 per cent in implied cost of equity estimators arising from persistent optimistic analysts' forecast of earnings. Deng, Kim and Yeo (2006) derive an estimation procedure that infers the bias in earnings forecasts for different horizons and present evidence that investors, on average, adjust one-year earnings forecasts downwards by about 10 percent. In this paper, we assert that another source of bias arises from a degrees-of-freedom problem and we present a general solution to this problem by deriving an equity valuation model that incorporates a forecast horizon of T periods. We also derive an estimate of the implied cost of equity capital as the solution of a polynomial equation of degree T+1. Hence the common practice (e.g., Gode and Mohanram, 2003; Botosan and Plumlee, 2005) of adjusting the forecast horizon beyond two years and yet retain a quadratic equation implied by the Ohlson and Juettner-Nauroth model, may be incorrect. Furthermore, we show that this polynomial equation has a very interesting nested property, where any the polynomial equation of degree n is obtained as a simple algebraic transformation of the polynomial equation of degree n-1.

Download or read book Equity Asset Valuation Workbook written by Jerald E. Pinto and published by John Wiley & Sons. This book was released on 2015-10-20 with total page 176 pages. Available in PDF, EPUB and Kindle. Book excerpt: Your complete guide to equity assets valuation Equity Asset Valuation Workbook, Third Edition was designed as a companion to Equity Asset Valuation, Third Edition, the most comprehensive text on this subject available on the market. This workbook provides key study tools, such as learning outcomes, chapter summaries, practice problems, and detailed solutions, that guide you in your preparation for the third step in the CFA certification program. These features reinforce essential theories and their practical application, and assist you in understanding the core concepts behind these theories, as well as when and how to implement them. Integrating both accounting and finance concepts, the workbook and its companion text offer a collection of valuation models—and challenge you to determine which models are most appropriate for given companies and circumstances. When you make an equity investment, you purchase and hold a share of stock. Through the payment of dividends and capital gains, this investment can result in income that can boost the performance of your portfolio—but determining which investments are going to be profitable and which are best passed over is key to building a successful equity investment strategy. Access targeted features, such as practice problems, chapter summaries, and learning outcomes, that reiterate your newfound knowledge Prepare for the third step in your CFA certification program with confidence Reinforce the ideas presented by the workbook's companion text, sold separately Expand your understanding of equity assets through versatile material that blends theory and practice to provide you with a realistic understanding of the field Equity Asset Valuation Workbook, Third Edition complements the revised Equity Asset Valuation, Third Edition, and guides your study efforts for the third step in the CFA certification program.

Download or read book Equity Valuation and Analysis with EVal written by Russell James Lundholm and published by McGraw-Hill/Irwin. This book was released on 2007 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: While focusing on the underlying theories of financial analysis and valuation, this work aims to answer the question, "What is this company really worth?". It takes the view that sound forecasts of financial statements are the key input to a good valuation, and that other aspects of the valuation process are mechanical.

Download or read book Focus on Value written by James L. Grant and published by John Wiley & Sons. This book was released on 2001-10-25 with total page 218 pages. Available in PDF, EPUB and Kindle. Book excerpt: Praise for Focus on Value "Focus on Value-with its theoretical and practical focus on economic profit fundamentals-is a modern day 'Graham and Dodd' primer on company and equity securities analysis."-Robert S. Hamada, Edward Eagle Brown Distinguished Service Professor of Finance, The University of Chicago Graduate School of Business "Now that investors have abandoned momentum and are migrating back to fundamental investing, the market has become a more rational place. This book is a manual for serious investors who believe that identifying growing corporate earning power is the foundation of value creation. Those following its precepts should minimize risk and be rewarded over the long term."-Byron R. Wien, Chief U.S. Investment Strategist, Morgan Stanley Dean Witter & Co. "Economic profit is one of the most useful managerial tools as well as a key to understanding the valuation of companies. Focus on Value is an outstanding piece of work. It captures the full spectrum of the 'Metric Wars' without ever confusing the reader. The serious student of economic profit will be richly rewarded by reading this excellent book from cover to cover."-Mario A. Corti, Chairman and Chief Executive Officer, Swissair Group, Zurich "Messrs. Grant and Abate have provided an analytical tool for corporate executives and investment managers which takes the concepts of economic profit and value maximization to the next level."-Suresh Thadhani, Chief Financial Officer and Executive Vice President, Alcan, Inc. "This book makes a real contribution to the most critical element in helping companies implement efficient capital resource allocation by highlighting the direct linkage between economic profit and stock price."-Jack Warner, Chairman, Kerry Inc. "The authors have put together an excellent piece of work and finally provide readers seriously interested in applying economic profit with a practical, market-oriented approach to integrate the basic building blocks of economic profit with valuation and market expectations."-David King, Director of Research, North America, PricewaterhouseCoopers, Corporate Value Consulting "In an era of following the herd toward indexation and price momentum, it is refreshing to see thinking out of the box and substantiating the tenets of an investment process that equates value with real investment opportunity."-Eric Colson, Senior Vice President, Callan Associates www.wileyfinance.com

Download or read book Estimating the Intertemporal Risk return Tradeoff Using the Implied Cost of Capital written by Luboš Pástor and published by . This book was released on 2006 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt: We reexamine the time-series relation between the conditional mean and variance of stock market returns. To proxy for the conditional mean return, we use the implied cost of capital, computed using analyst forecasts. The usefulness of this proxy is shown in simulations. In empirical analysis, we construct the time series of the implied cost of capital for the G-7 countries. We find strong support for a positive intertemporal mean-variance relation at both the country level and the world market level. Some of our evidence is consistent with international integration of the G-7 financial markets.

Download or read book CFA Program Curriculum 2019 Level II Volumes 1 6 Box Set written by CFA Institute and published by John Wiley & Sons. This book was released on 2018-08-24 with total page 3431 pages. Available in PDF, EPUB and Kindle. Book excerpt: Master the practical aspects of the CFA Program curriculum with expert instruction for the 2019 exam The same official curricula that CFA Program candidates receive with program registration is now publicly available for purchase. CFA Program Curriculum 2019 Level II, Volumes 1-6 provides the complete Level II curriculum for the 2019 exam, with practical instruction on the Candidate Body of Knowledge (CBOK) and how it is applied, including expert guidance on incorporating concepts into practice. Level II focuses on complex analysis with an emphasis on asset valuation, and is designed to help you use investment concepts appropriately in situations analysts commonly face. Coverage includes ethical and professional standards, quantitative analysis, economics, financial reporting and analysis, corporate finance, equities, fixed income, derivatives, alternative investments, and portfolio management organized into individual study sessions with clearly defined Learning Outcome Statements. Charts, graphs, figures, diagrams, and financial statements illustrate complex concepts to facilitate retention, and practice questions with answers allow you to gauge your understanding while reinforcing important concepts. While Level I introduced you to basic foundational investment skills, Level II requires more complex techniques and a strong grasp of valuation methods. This set dives deep into practical application, explaining complex topics to help you understand and retain critical concepts and processes. Incorporate analysis skills into case evaluations Master complex calculations and quantitative techniques Understand the international standards used for valuation and analysis Gauge your skills and understanding against each Learning Outcome Statement CFA Institute promotes the highest standards of ethics, education, and professional excellence among investment professionals. The CFA Program curriculum guides you through the breadth of knowledge required to uphold these standards. The three levels of the program build on each other. Level I provides foundational knowledge and teaches the use of investment tools; Level II focuses on application of concepts and analysis, particularly in the valuation of assets; and Level III builds toward synthesis across topics with an emphasis on portfolio management.

Download or read book CFA Program Curriculum 2018 Level II written by CFA Institute and published by John Wiley & Sons. This book was released on 2017-08-01 with total page 3282 pages. Available in PDF, EPUB and Kindle. Book excerpt: Master the practical aspects of the CFA Program Curriculum with expert instruction for the 2018 exam The same official curricula that CFA Program candidates receive with program registration is now publicly available for purchase. CFA Program Curriculum 2018 Level II, Volumes 1-6 provides the complete Level II Curriculum for the 2018 exam, with practical instruction on the Candidate Body of Knowledge (CBOK) and how it is applied, including expert guidance on incorporating concepts into practice. Level II focuses on complex analysis with an emphasis on asset valuation, and is designed to help you use investment concepts appropriately in situations analysts commonly face. Coverage includes ethical and professional standards, quantitative analysis, economics, financial reporting and analysis, corporate finance, equities, fixed income, derivatives, alternative investments, and portfolio management organized into individual study sessions with clearly defined Learning Outcome Statements. Charts, graphs, figures, diagrams, and financial statements illustrate complex concepts to facilitate retention, and practice questions with answers allow you to gauge your understanding while reinforcing important concepts. While Level I introduced you to basic foundational investment skills, Level II requires more complex techniques and a strong grasp of valuation methods. This set dives deep into practical application, explaining complex topics to help you understand and retain critical concepts and processes. Incorporate analysis skills into case evaluations Master complex calculations and quantitative techniques Understand the international standards used for valuation and analysis Gauge your skills and understanding against each Learning Outcome Statement CFA Institute promotes the highest standards of ethics, education, and professional excellence among investment professionals. The CFA Program Curriculum guides you through the breadth of knowledge required to uphold these standards. The three levels of the program build on each other. Level I provides foundational knowledge and teaches the use of investment tools; Level II focuses on application of concepts and analysis, particularly in the valuation of assets; and Level III builds toward synthesis across topics with an emphasis on portfolio management.

Download or read book Advances in Quantitative Analysis of Finance and Accounting New Series 2013 Vol 11 written by Cheng F. Lee and published by Center for PBBEFR & Airiti Press. This book was released on 2013-12-01 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Advances in Quantitative Analysis of Finance and Accounting (New Series) is an annual publication designed to disseminate developments in the quantitative analysis of finance and accounting. The publication is a forum for statistical and quantitative analyses of issues in finance and accounting as well as applications of quantitative methods to problems in financial management, financial accounting, and business management. The objective is to promote interaction between academic research in finance and accounting and applied research in the financial community and the accounting profession.

Download or read book Portfolio Management in Practice Volume 1 written by CFA Institute and published by John Wiley & Sons. This book was released on 2020-11-11 with total page 1328 pages. Available in PDF, EPUB and Kindle. Book excerpt: Portfolio Management in Practice, Volume 1: Investment Management delivers a comprehensive overview of investment management for students and industry professionals. As the first volume in the CFA Institute’s new Portfolio Management in Practice series, Investment Management offers professionals looking to enhance their skillsets and students building foundational knowledge an essential understanding of key investment management concepts. Designed to be an accessible resource for a wide range of learners, this volume explores the full portfolio management process. Inside, readers will find detailed coverage of: Forming capital market expectations Principles of the asset allocation process Determining investment strategies within each asset class Integrating considerations specific to high net worth individuals or institutions into chosen strategies And more To apply the concepts outlined in the Investment Management volume, explore the accompanying Portfolio Management in Practice, Volume 1: Investment Management Workbook. The perfect companion resource, this workbook aligns chapter-by-chapter with Investment Management for easy referencing so readers can draw connections between theoretical content and challenging practice problems. Featuring contributions from the CFA Institute’s subject matter experts, Portfolio Management in Practice, Volume 1: Investment Management distills the knowledge forward-thinking professionals will need to succeed in today’s fast-paced financial world.

Download or read book 2024 CFA Program Curriculum Level II Box Set written by CFA Institute and published by John Wiley & Sons. This book was released on 2023-07-25 with total page 5866 pages. Available in PDF, EPUB and Kindle. Book excerpt: Discover the official resource for success on the 2024 CFA Level II exam. Get your copy of the CFA® Program Curriculum now. The 2024 CFA Program Curriculum Level II Box Set contains the content you need to perform well on the Level II CFA exam in 2024. Designed for candidates to use for exam preparation and professional reference purposes, this set includes the full official curriculum for Level II and is part of the larger CFA Candidate Body of Knowledge (CBOK). Organized to get you accustomed to the Level II exam’s heavy reliance on vignettes, the Level II curriculum will help you master mini case studies and accompanying analyses. The 2024 CFA Program Curriculum Level II Box Set allows you to: Develop critical knowledge and skills essential in the industry. Learn from financial thought leaders. Access market-relevant instruction. The set also offers practice questions to assist with your mastery of key terms, concepts, and formulas. The volumes in Level II’s box set are: Volume 1: Quantitative Methods and Economics Volume 2: Financial Statement Analysis Volume 3: Corporate Issuers and Equity Valuation Volume 4: Equity Valuation and Fixed Income Volume 5: Derivatives, Alternative Investments, and Portfolio Management Volume 6: Portfolio Management and Ethical and Professional Standards Indispensable for anyone preparing for the 2024 Level II CFA exam, the 2024 CFA Program Curriculum Level II Box Set is a must-have resource for those seeking the intermediate skills required to become a Chartered Financial Analyst®.

Download or read book Valuation Techniques written by David T. Larrabee and published by John Wiley & Sons. This book was released on 2012-11-06 with total page 628 pages. Available in PDF, EPUB and Kindle. Book excerpt: Analysis and insights from top thought leaders on a pivotal topic in investing and asset management Valuation is the cornerstone for investment analysis, and a thorough understanding and correct application of valuation methodologies are critical for long-term investing success. Edited by two leading valuation experts from CFA Institute, this book brings together the insights and expertise of some of the most astute and successful investment minds of the past 50 years. From Benjamin Graham, the “father of value investing,” to Aswath Damodaran, you’ll learn what these investment luminaries have to say about investment valuation techniques, including earnings and cash flow analysis. Features the best thinking on valuation from the industry’s masters on the topic, supplemented with dozens of fascinating and instructive real-world examples Comprehensively discusses special valuation situations, such as real options, employee stock options, highly leveraged firms, corporate takeovers, and more Supplies you with the tools you need to successfully navigate and thrive in the ever-changing financial markets Is being produced with the full support and input of CFA Institute, the world’s leading association of investment professionals