Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
46 Cards in this Set
- Front
- Back
Measure of Industry Concentration
|
|
|
ROE
|
|
|
Intrinsic P/E:
FF, g, & G |
|
|
Effect of inflation on leading P/E
|
1 / real required return + [ ( 1-inflation flow-through rate) x inflation rate]
|
|
Holding Period Return
|
(P1 - P0 + CF1) / P0 = [ (P1 + CF1) / P0 ] - 1
|
|
Adjusted Beta
|
(2/3) x (regression beta) + (1/3) x (1.0)
|
|
Weighted Average Cost of Capital
|
|
|
Gordon Growth Model Equity Risk Premium
|
= One year forecasted dividend yield on market index + consensus long-term earnings growth rate - long term governments bond yield
|
|
Gordon Growth Model (V0)
|
[ D0 x ( 1 + g ) ] / ( r - g ) = D1 / ( r - g)
|
|
Two-stage Model
|
|
|
Value of Perpetual Preferred Shares
|
Dp / rp
|
|
Present Value of Growth Opportunities
|
(E / r ) + PVGO
|
|
H - Model
|
|
|
Sustainable Growth Rate
|
|
|
Value with Free Cash Flow Models
|
firm value = FCFF discounted at the WACC
equity value = FCFE discounted at the required return on equity |
|
Free Cash Flow to the Firm
|
FCFF = Nl + NCC + [Int x (1 -tax rate)] - FCInv - WCInv
= [EBIT x (1 - tax rate)] + Dep - FCInv - WCInv = [EBITDA x (1 - tax rate)] + (Dep x tax rate) - FCInv - WCInv = CFO + [lnt x (1 -tax rate)] - FCInv |
|
Free Cash Flow to Equity:
|
=FCFF- [lnt x (I -tax rate}] + net borrowing
=NI + NCC - FCInv - WCInv + net borrowing =CFO - FCInv + net borrowing =Nl - [(I - DR) x (FCInv - Dep)] - [(I - DR) x WCInv] |
|
Weighted average cost of capital:
|
= (We x r) + [Wd x rd x (1- tax rate)]
|
|
Single-Stage FCFF Model:
Value of the Firm |
= FCFF1 / ( WACC - g )
= [ FCFF0 x ( 1 + g ) ] / ( WACC - g ) |
|
Single-Stage FCFE Model:
Value of Equity |
= FCFE1 / ( r - g ) = [ FCFE0 x ( 1 + g ) ] / ( r - g )
|
|
Trailing P/E
|
market price per share / EPS over previous 12 months
|
|
Leading P/E
|
market price per share / forecasted EPS over next 12 months
|
|
P/B Ratio
|
=market value of equity / book value of equity = market price per share / book value per share
|
|
P/S Ratio
|
=market value of equity / total sales
=market price per share / sales per share |
|
P/CF Ratio
|
=market value of equity / cash flow
=market price per share / cash flow per share where: cash flow= CF, adjusted CFO, FCFE, or EBITDA |
|
EV / EBITDA Ratio
|
Enterprise value / EBITDA
|
|
Trailing D/P
|
( 4 x most recent quarterly dividend ) / market price per share
|
|
Leading D/P
|
forecasted dividends over next four quarters / market price per share
|
|
Justified Trailing P/E
|
|
|
Justified Leading P/E
|
|
|
Justified P/B Ratio
|
( ROE - g ) / ( r - g )
|
|
Justified P0 / S0
|
[ (E0 / S0) x ( 1 - b ) x ( 1 + g) ] / ( r - g )
|
|
Justified P/CF Multiple
|
[ FCFE0 x (1+ g) ] / ( r - g)
|
|
Justified Dividend Yield D0 / P0
|
P/E Ratio / g
|
|
Weighted Harmonic Mean
|
|
|
Residual Income
|
|
|
Economic Value Added
|
NOPAT- $WACC
|
|
NOPAT
|
=EBIT x (I - t)
=(sales- COGS - SGA - dep) x (I - t) |
|
$WACC
|
WACC x invested capital
|
|
invested capital
|
= net working capital + net property, plant, and equipment
=long-term debt + stockholders' equity |
|
EVA spread
|
= ROC - WACC
= EVA / Invested Capital |
|
ROC
|
NOPAT / Invested Capital
|
|
Vf
|
= invested capital + ( EVA / WACC)
= invested capital + MVA |
|
Implied Growth
|
g = r - [ (B x (ROE - r)) / V - B ]
|
|
Market Value Added (MVA)
|
= MV of firm - invested capital
|
|
MV of Firm
|
=MV of debt + MV of equity
|