Concepts in Valuation

Syllabus

 PAPER - VI: CONCEPTS IN VALUATION

 Unit -I:

Calculation of Simple Interest, Compound Interest, Present value and Future Values.

 Unit-II:

Annuity: Ordinary Annuity, Annuity Due, Future Value of Annuity, Determining Present Value and Future Value of Annuity, Compounding Frequency, Present Value of Perpetuities, Present Value of uneven Cash Flow Streams, Present Value of Deferred Annuities, Net Present Value.

 Unit-III:

The Characteristics of Fixed-Income (debt and preferred stock), Interpreting Financial Market Data, Including Stock and Bond Price Quotations, Capitalization of Cash Flows From the Asset and the Risk-Free Rate. The Value of a Bond with a Finite Maturity Date, the Yield to Maturity of a Bond, the Value of a Perpetual Bond/Perpetuity, Preferred Stocks.

 Unit-IV:

The Characteristics of Variable Income (common stock) Securities – Stockholder Rights, Features, Advantages and Disadvantages, Methods of Selling Securities in the Primary Capital Markets – Public, Cash Offering, Direct Placement, Rights Offering to Shareholders. The General Dividend Valuation Model, Constant Growth Dividend Valuation Model, Zero Growth Dividend Valuation, Non-Constant Growth Dividend Valuation Model.