Equity Investments: Study Session 12
Study Session Materials
Complete List of CFA Program Readings
Topic Overview
Valuation Models
This study session addresses the valuation methodologies that, in many cases, may provide a good estimate of a firm’s real value. The dividend discount model remains a baseline model. The free cash flow approach to valuation is an important alternative to the dividend discount model when dividends are not the best representation of a company’s value. Price multiples are among the most familiar and widely used valuation measures because of their simplicity and the ease with which they can be used and communicated.
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Complete List of CFA Program Readings
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“Discounted Dividend Valuation” |
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“Free Cash Flow Valuation” Ch. 3, Equity Asset Valuation, John D. Stowe, Thomas R. Robinson, Jerald E. Pinto, and Dennis W. McLeavey (Wiley, 2007) Member download (PDF) |
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“Market-Based Valuation: Price Multiples” Ch. 4, Equity Asset Valuation, John D. Stowe, Thomas R. Robinson, Jerald E. Pinto, and Dennis W. McLeavey (Wiley, 2007) |
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