Pascal edited section_textit_DDM_textit_RIM__.tex  almost 8 years ago

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\section{\textit{DDM}, \textit{RIM} and the \textit{PB-ROE} approach}  \subsection{Valuing assets}  We start off firslty by reminding the general model for valuing assets. A well know accounting identity expresses the relation between the value of an asset, the income stream it generates and to which the holder of the asset is entitled(C_{1},C_{2}, . . . C_{n}) and an endogeneous return R  $V_{t}=\displaystyle\sum_{i=1}^{K}\frac{C_{t+i}}{(1+R)^i}+V_{t+K}$  $EV_{t}=\displaystyle\sum_{i=t+1}^{t+K}\frac{FCFF_i}{(1+R)^i}+EV_{t+K}$