Equity Asset Valuation Workbook

YOUR COMPLETE GUIDE TO EQUITY ASSET VALUATION

Equity Asset Valuation Workbook, Third Edition provides the key component of effective learning: practice. This companion workbook conveniently aligns with the text chapter–by–chapter, provides brief chapter summaries to refresh your memory on key points before you begin working, and explicitly lays out the learning objectives so you understand the "why" of each problem. These features reinforce essential theories and their practical application, assist you in gaining proficiency in the core concepts behind these theories, and accurately determine when and how to implement them. Those who self study will find solutions to all exercise problems. This workbook lets you:

Refresh your memory with succinct chapter summaries Enhance your understanding with topic–specific practice problems Work toward explicit chapter objectives to internalize key information Practice important techniques with real–world applications Prepare for the third step in your CFA certification program with confidence

For everyone who wants a practical route to mastering the general analysis of stock shares held by individuals and funds, Equity Asset Valuation Workbook, Third Edition lives up to its reputation for clarity and world–class practice based on actual scenarios investors face every day.

Part I Learning Objectives, Summary Overview, and Problems 1

Chapter 1 Equity Valuation: Applications and Processes 3

Learning Outcomes 3

Summary Overview 3

Problems 5

Chapter 2 Return Concepts 9

Learning Outcomes 9

Summary Overview 9

Problems 11

Chapter 3 Introduction to Industry and Company Analysis 17

Learning Outcomes 17

Summary Overview 18

Problems 20

Chapter 4 Industry and Company analysis 25

Learning Outcomes 25

Summary Overview 26

Problems 26

Chapter 5 Discounted Dividend Valuation 33

Learning Outcomes 33

Summary Overview 34

Problems 36

Chapter 6 Free Cash Flow Valuation 45

Learning Outcomes 45

Summary Overview 46

Problems 48

Chapter 7 Market–Based Valuation: Price and Enterprise Value Multiples 61

Learning Outcomes 61

Summary Overview 62

Problems 65

Chapter 8 Residual Income Valuation 75

Learning Outcomes 75

Summary Overview 76

Problems 77

Chapter 9 Private Company Valuation 85

Learning Outcomes 85

Summary Overview 86

Problems 87

Part II Solutions 95

Chapter 1 Equity Valuation: Applications and Processes 97

Solutions 97

Chapter 2 Return Concepts 101

Solutions 101

Chapter 3 Introduction to Industry and Company Analysis 107

Solutions 107

Chapter 4 Industry and Company Analysis 109

Solutions 109

Chapter 5 Discounted Dividend Valuation 113

Solutions 113

Chapter 6 Free Cash Flow Valuation 123

Solutions 123

Chapter 7 Market–Based Valuation: Price and Enterprise Value Multiples 137

Solutions 137

Chapter 8 Residual Income Valuation 145

Solutions 145

Chapter 9 Private Company Valuation 157

Solutions 157

About the CFA Program 161

JERALD E. PINTO, PHD, CFA, has been at CFA Institute since 2002 as Visiting Scholar, Vice President, and now Director, Curriculum Projects in the Credentialing Division for the CFA and CIPM Programs.

ELAINE HENRY, PHD, CFA, is a Clinical Associate Professor of Accounting at Fordham University.

THOMAS R. ROBINSON, PHD, CFA, is president and CEO of AACSB International The Association to Advance Collegiate Schools of Business (AACSB).

JOHN D. STOWE, PHD, CFA, is the JPMorgan Professor of Finance at Ohio University.