Chapter 5: Equity Valuation—Models, Applications, and Market Nuances

In this section

• Dividend Discount and Free Cash Flow Models
  A comprehensive guide examining how Dividend Discount and Free Cash Flow valuation models are applied in equity valuation, including theoretical underpinnings, practical examples, US/Canadian perspectives, and tips for CFA Level II candidates.
• Residual Income Valuation and Applications
  A comprehensive exploration of the Residual Income Model (RIM), highlighting single-stage and multi-stage approaches, real-world examples, IFRS vs. US GAAP nuances, and best practices for CFA® Level II candidates.
• Market-Based Valuation and Relative Valuation
  Learn how to value companies using comparables, price multiples, and enterprise value multiples, with practical examples and tips for CFA® Level II exam preparation.
• Private Company Valuation
  Discover the essential principles and practical applications of private company valuation, including income, market, and asset-based methodologies, crucial discounts and premiums, and cross-border considerations for both Canadian and U.S. contexts.
• Specialized and Advanced Valuation Perspectives
  Explore advanced equity valuation strategies for resource-sector companies, real options, ESG factors, cross-border listings, and synergy valuation in M&A under a practical and approachable lens. Learn specialized approaches, pitfalls, and best practices for your CFA® Level II studies.