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FMGT 7105 - Equity Analysis

Financial Management Part-time Studies Course

School of Business

Course Details

This course begins with the essential tools of equity valuation: the discounted cash flow technique and the relative valuation approach. Also addressed is estimating a company’s earnings per share by forecasting sales and profit margins. We examine price multiples, one of the most familiar and widely used tools in estimating the value of a company, and introduce the application of commonly used price multiples to valuation.

Prerequisite(s)

FMGT 7030 and OPMT 1197 (with a grade of 65% or better).

Credits

3.0

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Learning Outcomes

At the end of this course the student will be able to:

  • Assess the value of a preferred stock and a common stock using the dividend discount model (DDM)
  • Justify how to use the DDM to develop an earnings multiplier model
  • Describe the factors in the DDM that affect a stock’s price-to-earnings (P/E) ratio
  • Calculate and interpret P/E, P/BV, P/S, and P/CF
  • Assess and interpret free cash flow to the firm (FCFF) and free cash flow to equity (FCFE)
  • Apply the basic principles of capital budgeting, including the choice of the proper cash flows and determining the proper discount rate
  • Calculate and interpret the weighted average cost of capital (WACC) of a company
  • Calculate and interpret liquidity measures using selected financial ratios for a company
  • Compare liquidity measures of peer companies

Effective as of Fall 2011

Related Programs

FMGT 7105 is offered as a part of the following programs:

School of Business

  1. Financial Analyst
    Part-time   Advanced Certificate

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