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19 Cards in this Set
- Front
- Back
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Formula for Big Dividend |
Beginning Owners Equity +Comprehensive Income - End Owners' Equity |
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Formula for Estimated Value per Share |
Estimated Value /Shares Outstanding |
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Formula for Dividend Discount Model |
Estimated Value at time zero = Forecasted dividend for period/ (1 + cost of equity capital)^period |
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Formula for Book Value |
Book Value of owner's equity at time t = Book Value at time t-1 + Comprehensive Income - Big Dividend |
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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. |
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"Big Dividends" |
Dividends used to value firms |
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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. |
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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. |
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Formula for weighted average cost of capital |
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Formula for Cash Flow |
Cash Flow = Big Dividend + After-tax Interest Expense - Change in Long Term Debt |
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Cost of Equity Capital |
The return that investors expect to receive from an equity investment. |
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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. |
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Formula for Capital Asset Pricing Model - CAPM |
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What are "transitionary" components of income? |
Components of income not expected to recur. |
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What are "persistent" components of income? |
Components of income which are expected to recur. |
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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. |
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Special Items |
A transaction or an event that is relatively unusual or expected to be non-recurring that affects net-imcome |
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What are Restructurings |
A restructuring is a package of changes to the company's operations intended to improve efficiency and profitability. |
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Pro Forma (Non - GAAP) Income |
Alternative Measures of income that don't abide by Generally Accepted Accounting Principles. |
