Page 98 - DCOM504_SECURITY_ANALYSIS_AND_PORTFOLIO_MANAGEMENT

Unit 3: Introduction to Security Analysis
Mahesh Kumar Sarva, Lovely Professional University

Unit 3: Introduction to Security Analysis Notes

CONTENTS
Objectives
Introduction

3.1 Equity Value and Enterprise Value
3.2 Valuation Methods
3.3 Free Cash Flow Calculation

3.4 Leverage
3.5 Calculating the Cost of Capital
3.6 Share Buy-back
3.6.1 Reasons to Buyback
3.6.2 Restrictions on Buyback by Indian Companies

3.6.3 Finding the Feasibility of the Buyback
3.7 Project Valuation
3.8 Warrant Valuation

3.9 Treatment of Goodwill
3.10 Summary
3.11 Keywords
3.12 Self Assessment
3.13 Review Questions

3.14 Further Readings

Objectives

After studying this unit, you will be able to:
Explain the concept of Security Analysis

Discuss equity value and enterprise value
Describe Valuation Methods
Understand free cash flow calculation
Define Leverage
Explain calculation of the Cost of Capital

Discuss Share Buy-Back
Understand the concept of project warrant valuation
Analyze P/E Ratio

Discuss treatment of Goodwill

LOVELY PROFESSIONAL UNIVERSITY 93