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19-01-2018

Only write 3 parts

1 Executive summary

3 Residual earnings valuation 

4 Implied growth rates     

 

 

 

 

 

 

 

 

 

 

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Residual earnings valuation method is used to calculate the intrinsic value of the stock based on the expected residual income of the company in the coming years. The residual income is discounted back to present value using the total cost of equity. Implied growth rate is one of the important metric for investors to assess the long-term earnings growth potential of a company. It is defined as the growth that is implied in the earnings of a company when some portion of the net income is retained and invested back in the business.

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