Reading 2.3 and Reading 2.4

what model is most suitable for long term valuation

discounted cash flow model

in equity markets whats the most common DCF and whats its used for

Gordon growth or constant growth

used to back out the expected ROE

in equity and in gordan growth model what is often a proxy for growth rate

nominal gdp (real growth + inflation)

what three main components can the grindold kroner be broken down into

expected income return

expected nominal growth in earnings

expected repricing return

why can the grindol kroner model lead to irrational results

bc of the infinite time horizon it ignores investors time horizon

what does the financial equilibrium approach assume

financial models will value securities correctly

singer-terhaar model

weighted average of:

-international CAP w global assets markets fully integrated and another fully segmented

Risk premium for an asset is equal to..

correlation w global market portfolio Standard deviation sharpre ratio for global portfolio

whats a frequent cause of market segmentation

government restrictions

what’s an idiosyncratic risk emerging countries face

local country effects tend to be more important than global effects