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R = Next Year's Dividend Yield + Long-Term Earnings Growth Rate - Current Long-Term Government Bond Yield
= Net Income - (Equity Capital * Beginning Book Value of Equity)=
(Return on Equity - Required Rate of Return) * Beginning Book Value of
Equity
R = {[(1 + Expected Inflation)(1 + Expected Growth in Real
Earnings/Share)(1 + Estimated Growth in PE) - 1] + Dividend Yield} -
Risk Free Rate
PVGO = Stock Value - (Today's Earnings / Required Return on Equity)
PE = (1 / Required Return on Equity) + (PVGO / Today's Earnings)
-Measures the value added for shareholders by management during a
given year-EVA = NOPAT - (WACC * Invested Capital)-EVA = [EBIT * (1 -
Tax Rate)] - $WACC
-Difference between the market value of a firm's long-term debt and
equity and the book value of invested capital supplied by
investors-Measures the value created by management's decisions since the
firm's inception-MVA = Market Value - Invested Capital
= (Residual Income) / (1 + Required Return on Equity)
-Low payout ratios-Historically high persistence in industry
= (Residual Income) / (1 + Required Return on Equity - Persistence Factor)
= (Residual Income) / (Required Return on Equity)
-High ROE-Lots of nonrecurring items-High accounting accruals
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