Reflexive review of academic literature on the relative merits and accuracy of the main different valuation methods – multiple screening, dividends, cash flow and earnings

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This will require more than simply understanding how the main equity valuation models (DDM, DCF, RIVM) measure financial data need to understand complex theories of how measurements of accrual-based earnings, cash flow and dividends compare with each other for accuracy and efficiency of equity valuation This will require more than simply understanding how the main equity valuation models (DDM, DCF, RIVM) measure financial data You will need to understand complex theories of how measurements of accrual-based earnings, cash flow and dividends compare with each other for accuracy and efficiency of equity valuation The further developments of equity valuation theory (such as Abnormal Earnings and Operating Income Growth, Linear Information Dynamics, conservative accounting, inflation impact) are significantly more difficult to understand than the basic comparisons between DDM, DCF and RI valuation models 1. SIMPLE BENCH-MARKING Book asset value Relative multiples of entity/equity value to various measures of earnings, cash flow, dividends, sales and book value Screening of companies by multiple measures 2. INTRINSIC CORPORATE VALUE Compute Present Value (PV) of forecast stream of: Dividends – DDM Free Cash Flow – DCF (Residual) Earnings – RE or RIVM HOW TO DEVELOP THE ARGUMENT Define objectives of literature review Plan a clear line of argument through the valuation models Use references to specific academic research articles to support each argument throughout the review Show a good understanding of the differences between: Valuation models preferred in most academic research studies Valuation methods applied in practice by most equity analysts Try to link review of academic literature to the valuation conclusions from your company case study Show understanding of all valuation models Compare advantages and limitations of each Understand difference between theory of corporate valuation and its practice in financial markets by applied equity analysts Use references to academic research literature to support each stage of the argument Try to use academic research articles as much as possible