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Analysis Tools In Finance

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-Present value of the future cash flows at the investor's required rate of return Preferred Stock: -Hybrid of Debt and Equity instruments -Commonly, dividend will be fixed

-Dividend will be variable based on firm's performance -The price of an asset minus its accumulated depreciation -BV does not necessarily fairly represent the actual market value of the asset -the buying/selling price calculated as a weighted average of everybody's intrinsic value Intrinsic Value: -Present value of the future cash flows at the investor's required rate of return -Different investors have different perception and expectation; therefore, IV is unique to each individual

-Assumption is"Holding stock perpetually, Dividend increase at constant growth. "Two-Stage growth Dividend Discount Model" -Assumption is -G'iOwth rate is one rate for early period (usually very high growth rate)

-Assumption is

-Growth rate is one rate for early period (usually very high growth rate) . -Then, growth rate is gradually decline (linear) to another constant growth rate ~ transition period -After that, growth rate is constant at another rate

L
t=l

n

-What are the expected cash flows? (CFt)

eFt (1+i)t

-When will the cash flows occur? (t) -What is the reqUired rate of return for this particular stream of cash flows? (i)

D
kp

-Present value of the future cash flows at the investor's required rate of return -Dividend of preferred stock is fixed -Equity instrument has no maturity ~ we use perpetuity concept

-See from secondary data & Calculate using Regression method -Function approach & Using SLOPEfunction

PAR

-Present value of the future cash flows at the investor's required rate of return

(1 tkd)n -PV annuity for periodic coupon payment + PV
of PAR at maturity

-y (dependent) 7 stock return

-x (independent)
Beta =

7 market return =-PV(Rate,Nper,Pmt,FV,Type) COY(Rm.Ril Var(Rm) 7 required rate of return (Kc.) 7 number of period to maturity (n)

-Cov =...

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"Analysis Tools In Finance". Anti Essays. 14 Dec. 2018

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Analysis Tools In Finance. Anti Essays. Retrieved December 14, 2018, from the World Wide Web: http://cassandralynndesignllc.com/free-essays/Analysis-Tools-In-Finance-140283.html