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Valuation And Investment Profession

Author

Listed:
  • Dedi, Lidija

    (Faculty of Economics and Business Zagreb, Zagreb, Croatia)

  • Giraudon, Philippe

    (Maître de conférences, Sciences Po, Paris, France)

Abstract

Investment professionals, particularly financial analysts or security analysts evaluate securities and try to determine characteristics of securities and to identify mispriced securities. For that purpose they use different models to estimate the intrinsic value of the common stocks. Traditional valuation models based on the present value of future cash flows are affected by estimated growth rate of the variable used and by the investor’s required rate of return. These models can be used for valuing fixed income securities, such as bonds and preferred stocks. However, in valuing companies with significant growth opportunities they have to expand traditional analysis with option valuation.

Suggested Citation

  • Dedi, Lidija & Giraudon, Philippe, 2013. "Valuation And Investment Profession," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 4(2), pages 93-100.
    • Handle: RePEc:ris:utmsje:0071
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    More about this item

    Keywords

    investment professions; valuation; dividend discount models; free cash flow model; option value;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G13 - Financial Economics - - General Financial Markets - - - Contingent Pricing; Futures Pricing

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