H Model – Dividend Discount Model
H model is another form of Dividend Discount Model under Discounted Cash flow (DCF) method which breaks down the cash flows (dividends) into two phases or stages. It is …
Investment Decisions
Constant Growth Rate Discounted Cash Flow Model/Gordon Growth Model
Gordon Growth Model is a part of Dividend Discount Model. This model assumes that both the dividend amount and the stock’s fair value will grow at a constant rate. …
Two Stage Growth Model – Dividend Discount Model
The two-stage dividend discount model takes into account two stages of growth. This method of equity valuation is not a model based on two cash flows but is a …
Single Period Model – Discounted Cash Flow Model
Single Period Model, one of the discounted cash flow models, is an income valuation approach that aims to find the fair value of a stock/firm using single projected cash …
Tobin’s Q / Q Ratio
Tobin’s Q ratio is a popular method of estimating a stock’s fair value and can be practically used by market participants to make informed decisions. It is also known …
Replacement Value Method of Equity Valuation
Replacement value method takes into account ‘the amount required to replace the existing company’ as the valuation of a company. In other words, if one is to create a …
Liquidation Value Method of Equity Valuation
Liquidation value method of equity valuation is one of the techniques under Balance Sheet based methods of valuation which assumes that value of the company under this method will …
Portfolio Management
For understanding portfolio management (PM), it is important to understand the term ‘portfolio’, meaning of PM, who is a portfolio manager, what does PM service involve, classification of PM …
Capital Rationing – Its Assumptions, Advantages and Disadvantages
Capital rationing is a common practice in most of the companies as they have more profitable projects available for investment as compared to the capital available. In theory, there …
Types of Capital Rationing – Hard and Soft
Capital rationing is the strategy of picking up the most profitable projects to invest the available funds. Hard capital rationing and soft capital rationing are two different types of …