EV = Market value of common stock + Market value of preferred stock + Market value of debt – (Cash + ST investments) Enterprise value is a measure of the total value of a company. It is often viewed as the cost to acquire the company. See also: Enterprise value multiple
EV multiple = EV / EBITDA A multiplier model used in equity valuation. Compare the EV multiple to industry average.
The intrinsic P/E ratio of a company based on the present value of its future cash flows. This is derived from the Gordon Growth Model.
A form of Dividend Discount Model which is often used to model rapidly growing companies where they are expected to experience an initial finite period of high growth, but slowing to an infinite period of sustainable slower growth. The Gordon Growth Model can be used to estimate the value for this second phase of growth, but the value has to …
A form of Dividend Discount Model which allows us to simplify all future dividends to one value by making assuming a constant growth rate of dividends. See also: 2-stage Growth Model, Sustainable growth rate
An alternative to Dividend Discount Model, the FCFE Model is often used to valuate growth companies that pay little or no dividend. FCFE is an appropriate alternative as it represents the amount of cash collected during the period, that is available for distribution to common shareholders. That is, FCFE reflects the firm’s capacity to pay dividends.
A present value model that estimates the intrinsic value of an equity share based on the present value of its expected future dividends. The fundamental dividend discount model which is impractical because it requires us to estimate every dividend in the future. The Gordon Growth Model simplifies this process by assuming that dividends will grow in perpetuity at a single …
Valuation models that estimate the intrinsic value of a security as the present value of the future benefits expected to be received from the security. The dividend discount model define such benefits as the expected future dividends to be distributed to shareholders. For companies that pay little or no dividend, the FCFE model can be used. FCFE reflects the …
The day that a company actually mails out or electronically transfers a dividend payment to the shareholders. See also: Declaration date, Ex-dividend date, Holder-of-record date
One or two business days after Ex-dividend date is the holder-of-record date. This is the date that all shareholders listed on the company’s books are recorded down for receiving the upcoming dividend. The reason for this gap is because trades on a stock exchange typically takes 1 to 2 business days to settle. See also: Declaration date, Ex-dividend date, …
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