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.