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19 Cards in this Set

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Formula for Big Dividend

Beginning Owners Equity +Comprehensive Income - End Owners' Equity

Formula for Estimated Value per Share

Estimated Value /Shares Outstanding

Formula for Dividend Discount Model

Estimated Value at time zero = Forecasted dividend for period/ (1 + cost of equity capital)^period

Formula for Book Value

Book Value of owner's equity at time t = Book Value at time t-1 + Comprehensive Income - Big Dividend

Dividend Discount Model

The dividend discount model (DDM) is a method of valuing a company's stock price based on the theory that its stock is worth the sum of all of its future dividend payments, discounted back to their present value.

"Big Dividends"

Dividends used to value firms

Book Value

Book value of an asset is the value at which the asset is carried on a balance sheet and calculated by taking the cost of an asset minus the accumulated depreciation.

Weighted average cost of capital

is the average rate of return a company expects to compensate all its different investors. The weights are the fraction of each financing source in the company's target capital structure.

Formula for weighted average cost of capital

Formula for Cash Flow

Cash Flow = Big Dividend + After-tax Interest Expense - Change in Long Term Debt

Cost of Equity Capital

The return that investors expect to receive from an equity investment.

Capital Asset Pricing Model - CAPM

The capital asset pricing model (CAPM) is a model that describes the relationship between systematic risk and expected return for assets, particularly stocks.

Formula for Capital Asset Pricing Model - CAPM

What are "transitionary" components of income?

Components of income not expected to recur.

What are "persistent" components of income?

Components of income which are expected to recur.

What are Discontinued Operations

When a company decides to sell or dispose of a part of its business and the disposal represents a strategic shift that has a major effect on an entities operations and financial results.

Special Items

A transaction or an event that is relatively unusual or expected to be non-recurring that affects net-imcome

What are Restructurings

A restructuring is a package of changes to the company's operations intended to improve efficiency and profitability.

Pro Forma (Non - GAAP) Income

Alternative Measures of income that don't abide by Generally Accepted Accounting Principles.