这道题想问什么？

问题如下：

An investor wants to determine the intrinsic value of the common stock for a company with the following characteristics:

选项：

A.Free cash flow to equity model B.Gordon dividend growth model C.Asset-based valuation model

解释：

Solution

1. Correct. The free cash flow to equity (FCFE) model is a measure of the firm’s dividend-paying capacity, which should be reflected in the cash flow estimates rather than expected dividends. Analysts must make projections of financials to forecast future FCFE, and thus the constant growth assumption, as in the Gordon growth model, is not an issue. An asset-based valuation model is not appropriate because of the high proportion of intangibles (goodwill and patents) in the firm’s assets.

2. Incorrect. The Gordon model is not appropriate because the investor focuses on the firm’s capacity to pay dividends rather than expected dividends. Further, the cyclical nature of the firm’s earnings and the constant payout ratio are not consistent with the constant growth rate of dividends assumed under the Gordon model.

3. Incorrect. An asset-based valuation model is not appropriate considering the high proportion of intangibles (goodwill and patents) in the firm’s assets.

Equity Valuation: Concepts and Basic Tools

• explain the rationale for using present value models to value equity and describe the dividend discount and free-cash-flow-to-equity models