Sum Of The Parts (SOTP) Valuation
What is Sum Of The Parts (SOTP) Valuation? Sum Of The Parts (SOTP) valuation is an approach to valuing a firm by separately assessing the value of each business segment or subsidiary and adding them up to get the total value of the firm. It can be used in conjunction with various valuation techniques such...
Relative Valuation Models
What are Relative Valuation Models? Relative valuation models are used to value companies by comparing them to other businesses based on certain metrics such as EV/Revenue, EV/EBITDA, and P/E ratios. The logic is that if similar companies are worth 10x earnings, then the company that’s being valued should also be worth 10x its earnings. This...
P/E Ratio Template
P/E Ratio Template This P/E ratio template will show you how to calculate the Price-to-Earnings multiple using share price and earnings per share. Here is a screenshot of the template: Download the Free Template What is the Price Earnings Ratio? The Price Earnings Ratio (P/E ratio) is the relationship between a company’s stock price and...
Multiple-Period Dividend Discount Model
What is the Multiple-Period Dividend Discount Model? A multiple-period dividend discount model is a variation of the dividend discount model. It is often used in situations when an investor is expecting to buy a stock and hold it for a finite number of periods and sell the stock at the end of the holding period....
Dividend Discount Model
What is the Dividend Discount Model? The Dividend Discount Model (DDM) is a quantitative method for valuing a company’s stock price, assuming that the current fair price equals the sum of all future dividends discounted to present value. Breaking Down the Dividend Discount Model The dividend discount model was developed under the assumption that the intrinsic value of...
