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115.060.06.01 Equity Investments - Reading 41 - 1. Estimated Value and Market Price
1. Estimated Value and Market Price
a. evaluate whether a security, given its current market price and a value estimate, is overvalued, fairly valued, or undervalued by the market;
## b. describe major categories of equity valuation models;
What are the three major categories of equity valuation models? 1. Present value models. Both dividend discount models and free-cash-flow-to-equity models belong to this category. 2. Multiplier models. These are relative valuation models. 3. Asset-based valuation models. These are based on the book value of assets and liabilities.
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CFA
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- 115.060.06 Equity Investments - Reading 41 - Equity Valuation Concepts and Basic Tools to 115.060.06.01 Equity Investments - Reading 41 - 1. Estimated Value and Market Price