this is for holding javascript data
Pascal edited section_textit_DDM_textit_RIM__.tex
almost 8 years ago
Commit id: 3d79f3e3c59742842c33a32ebbc8fe90ae0440a6
deletions | additions
diff --git a/section_textit_DDM_textit_RIM__.tex b/section_textit_DDM_textit_RIM__.tex
index e3d8c1e..512e701 100644
--- a/section_textit_DDM_textit_RIM__.tex
+++ b/section_textit_DDM_textit_RIM__.tex
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\end{itemize}
$EV_{t}=\displaystyle\sum_{i=t+1}^{t+K}\frac{FCFF_i}{(1+R)^i}+EV_{t+K}$
This should allow to contourner caveats of earnings/dividends valuation model. We build a new Profitability/Valuation framework that hinges on the cash-flows a firm is able to generate. Using cash-flows allows to neutralize the leverage effect at the operating level of a firm as well as the balance sheet level. The paper is organized as follow. As a means of introduction we remind the basic principles behind asset valuation and show how they can be translated into equity valuation models. In the first section, we give a brief description of the links between the \textit{DDM}, the \textit{RIM} and the \textit{PB-ROE} framework. We also show how the \textit{PB-ROE} framework can be used as a screening tool for equity investors. In the second section, we show how we can build a new Profitability/Valuation framework based on a firm's cash-flows instead of a firms earnings. the deals with accounting relationship.
