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CFA Study Guide

CFA Level II

Module 29.3 LOS 29.o: Using DuPont ROE to estimate a sustainable growth rate

May 17, 2019 by CFA Study Guide
CFA Equity

The sustainable growth rate, the rate at which earnings and dividend can grow indefinitely, can be calculated by multiplying the …

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Module 31.4 LOS 31.h: Relating Justified PE to Justified PS and Justified PB

May 17, 2019 by CFA Study Guide
CFA Equity

From the justified PE equation we can derive several relationships to PS and PB ratios: where: V0 = fundamental value D0 = …

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Module 20.3 LOS 20.h: Economic Income in capital budgeting

May 17, 2019 by CFA Study Guide
CFA Financial Analysis & Reporting

A project’s economic income is the after-tax cash flow plus the change in the investment’s market value. Interest is ignored for cash …

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Module 25.3 LOS 25.j: Estimate the value of a target company using comparable company and comparable transaction analyses

May 17, 2019 by CFA Study Guide
CFA Corporate Finance

In comparable company analysis, we calculate an estimate of firm value using relative valuation metrics, and then add a takeover …

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Module 25.4 LOS 25.n Carve outs, spin-offs and liquidations

May 17, 2019 by CFA Study Guide
CFA Corporate Finance

Firm can decrease in size through divestitures, which usually involve a sale of a portion of a firm to an …

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Module 25.4 LOS 25.k, 25.i: Post-acquisition value created using different payment methods

May 17, 2019 by CFA Study Guide
CFA Corporate Finance

For mergers to occur in a rational sense, the value of the combined firm should be worth more than the …

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Module 29.2 LOS 29.f: Justified Leading and Trailing P/E

May 17, 2019 by CFA Study Guide
CFA Equity

Justified P/Es are based on firm fundamentals. The leading P/E uses earnings forecasts from the next period while the trailing …

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Module 19.5 LOS 19.e: Balance Sheet Accruals Ratios

May 17, 2019 by CFA Study Guide
CFA Financial Analysis & Reporting

The fewer accrual accounting adjustments that are made from operating cash flow, the higher the earnings quality will be. We …

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Module 17.2 – 17.5: CAMELS: Capital Adequacy and Liquidity Position

May 17, 2019 by CFA Study Guide
CFA Financial Analysis & Reporting

CAMELS is an acronym for the six factor analysis of bank health. It covers capital adequacy, asset quality, management, earnings, …

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Module 17.1 LOS 17.b: Capital Requirements of Financial Institutions

May 17, 2019 by CFA Study Guide
CFA Financial Analysis & Reporting

Financial institutions must meet the Basel III minimum standards for capital levels, liquidity and stable funding. The Basel III standards …

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