CFA Level 2 | Equity: Continuing Residual Income

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  • Опубліковано 9 лют 2025
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    CFA Level 2
    Topic: Equity Valuation
    Reading: Residual Income Valuation
    Continuing residual income refers to the residual income after the forecast horizon.
    This video covers the valuation of equity based on:
    the persistence factor.
    premium over book value.
    Find out more about the CFA Level 2 exam preparatory courses offered at Noesis (www.noesis.edu.sg/programme/cfa). We offer face-to-face tuition classes (lecture and revision/review) in Malaysia and the Blended Online (B/O) mode for candidates from Malaysia, Singapore, and Vietnam.

КОМЕНТАРІ • 14

  • @Parkerrr6
    @Parkerrr6 6 місяців тому +1

    bro has a special skill of making things easier!! thanks alot fabian please continue to make these videos

  • @newmercies1
    @newmercies1 Рік тому +2

    This is by far best explanation ever on Multi-stage RI Model. To recap for a 4 year scenario valuation the generic formula would be V0 = B0 + RI/(1+r) + RI2/(1+r)^2 + (RI3 + TV)/(1+r)^3 where TV= RI4/(1+r-ω) no matter what the omega value from 0 to 1.

  • @aquila573
    @aquila573 Рік тому +1

    Amazing! I have been struggling with the Terminal value calculation and its variations for the RI model. UA-cam was my last resort and I found you. Thank you so much.

  • @hy1955
    @hy1955 Рік тому +1

    Very helpful, thanks!

  • @dhirajkapur2315
    @dhirajkapur2315 3 роки тому

    Very well explained. Thanks for this.

  • @mattguarino8139
    @mattguarino8139 Рік тому

    Thank you!

  • @johnnywong9652
    @johnnywong9652 Рік тому

    nice tutorial thanks

  • @Hungvuong-g6h
    @Hungvuong-g6h 3 роки тому

    Is this formula correct?
    P/B3=(ROE-g)/(r-g)
    TV3=P3-B3=B3(P/B3-1)=B3((ROE-g)/(r-g)-1)=B3(ROE-r)/(r-g)=RI4/(r-g)
    →TV3=RI4/(r-g) or TVt=RIt+1/(r-g)

  • @ndumisolushaba2403
    @ndumisolushaba2403 3 роки тому

    why did you discount terminal value value twice ? when w=0.

    • @FabianMoa
      @FabianMoa  3 роки тому +1

      I was just showing that you could either:
      1) discount the $2.50 back by 4 years, OR
      2) discount $2.50 back by 1 year (to Year 3), then discount it back 3 years to Year 0.
      The textbook uses Method 2 in their workings, but I personally prefer Method 1.