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plz refer to slide # 25, how did u compute additional investmetn x required rate= 8876x 5% = 443 what is this 443 .plz remove my confusion,,, how did u get 8236 cost of marginal investmet ???

thank you brother

Sir may i know what reference you use?

Interesting college

Please inform the document where i get the pdf

Can u share these slides

Uncleared,Sometimes you need to ellablrate your explaination and give a situational xample as well for others to visualize the effect of this,You're no longer explaining but reading

Sir thank you! Big help ❤

perfect sa lesson namin , ito gagamitin kong resources para mag aral at makapag ready sa recitation salamat po dito 💙

Thank you sir. Your new subscriber. Hihi.

What is offsetting po Sir?

thank you brohter

Thank you ✨🌷

This is best explanation for auditing the Sales Cycle among the tons of videos that I have seen. Thank you.

Paano po pag ganto On November 1,2020, a store six months rent in advance in the amount of P60000 which were credited to full rent revenue when collected.

Hello poo. thank you for sharing your knowledge to us po even to me na hindi niyo po student hehe. I just wanna ask lang po if may continuation po yung discussion niyo about sa Consolidate SFP po? about naman po sa Subsequent to Date of Acquisition? hehe. Thank you po and God Bless!! :)

thank u

Hi sir Sino po yung author na nag' basesan po ninyo? or what book po?😇

Thanks po,big help po sa recitation po namin

You explained everything perfectly!

11di6p #von.ngo

Thank you sir!

thank you sir.

In this discussion video, I learned the following points: To begin, I learned that preferred stock is a type of equity that is projected to pay a fixed annual dividend indefinitely. A preferred stock's value is equal to the present value of future dividend payments discounted at the stock's necessary rate of return. The percentage of dividends to be allocated in preferred stocks will be multiplied by the outstanding share capital to determine the amount of dividends to be allocated in preferred stocks. The preferred stock market price equals the following period's dividend payout over the discount rate is the formula for valuing preferred stocks. On the other hand, we have two methods for valuing common stocks based on the situation: the return on investment and the value of a share of common stock. To calculate the return on investment, it is important find the difference between the selling price of the share and the costs before of the stock then add the dividend of the next period and divided it by the cost before of the stock. To calculate the value of a common stock, add the dividend by the selling price and divide by the sum of 1 and the rate raised to the power of 1. Secondly, I became familiar with several valuation models. The zero growth valuation model assumes that the dividend remains constant throughout time, implying that there is no dividend growth. The value of the stock equals the dividend in the next year above the rate is the formula for the zero growth valuation model. The constant growth valuation model, also known as the Gordon growth model, predicts that the company's dividends will continue to grow at the same pace indefinitely. As a result, the constant rate falls short of the desired return. The value of the stock equals dividends over r-g is the formula for this approach. The variable growth valuation model, on the other hand, predicts that the dividend growth rate would fluctuate over time. In this model, we must add the present value of dividends throughout the initial growth phase and the present value of stock price at the conclusion of the initial growth phase to get the stock value.

In this video, I have learned the following concepts: First, I have learned that preferred stock is an equity security that is expected to pay a fixed annual dividend indefinitely. The value of a preferred stock equals the present value of its future dividend payments discounted at the required rate of return of the stock. The formula in getting the price or value of a share of preferred stock is equal to the annual dividend per share of preferred stock divided by the required rate of return. The annual dividend per share of preferred stock equals the par value (also called face value) of the stock multiplied by the stated dividend rate. The required rate of return reflects the market assessment of the risk inherent in the preferred stock. Second, I have learned the different valuation models. The first model is the zero growth valuation model assume the stock has a fixed stream of dividends. The dividend is expected to remain the same over time. The second model constant growth valuation model assumes that the dividend growth rate will vary during different periods of time. It is expected that dividends are going to continue to rise at a constant growth rate indefinitely. The third model is the variable growth valuation model assumes that the dividend growth rate will vary over time. It is expected that the dividend growth rate will change.

The video is all about Stock Valuations and these are my learning points: 1. I learned concepts behind the PREFERRED AND COMMON STOCK VALUATIONS. First the procedure in the valuation of the preferred stock, I just learned this completely today and understand completely behind the line that "although the stocks and bonds are different in the main idea, a stock may have the qualities of both, and the example for it is this PREFERRED STOCK. As we can see, we use the formula of the present value of perpetuity to get the market price of the preferred stock, that have been discussed in the bonds valuation theories and formulas, with the previous videos. Preferred stock is an equity security that is expected to pay a fixed amount of dividend indefinitely (thus perpetuity). Next is the common stock valuation, which uses a more complex formula compared to the preferred stock. In order for the market price of the common stock to be solved, we must solve first for the ROI for the common stocks, and this is computed by adding the capital gains from the common shares (Selling price - cost or buying price of the share) and dividends to the next period. Then divide the result by the buying price of the share. In this way, we can solve for the return on investment then use it to the consequent formulas, which is the formula to be used to get the market price/value of the common shares/stock. 2. I learned about the VALUATION MODELS. The Zero Growth Valuation Model is the simplest approach that assumes a constant, non-growing dividend stream. This means that the formula will simply be only the same as the ones with the PV of Perpetuity. The dividend for the next period will be divided by the rate. The Constant Growth Valuation Model is another method of a valuation. It is presumptively assumed in this model that a company's dividends will continue to rise at a constant rate indefinitely. We may use that assumption to calculate what a fair price to pay for the shares now, based on those future dividend payments. Then next is the Variable Growth Valuation Model. This model predicts that the dividend growth rate will fluctuate over time. We simply sum the Present Value of dividends during the initial phase and the Present Value of the stock price at the conclusion of the initial growth phase to get the market value of the stock.

In this video, I learned the following: First, preferred stock(s) shares some characteristics with debt and others with equity. Mostly, this type of stock are found only in corporations and usually the shareholders of these stocks do not have voting rights. This is due to their prioritization in paying out dividends which makes them to be paid first before common stockholders. These stocks are similar to debt since it issues dividend payments based on certain percentages just like preferred stock(s). The dividend payment is computed by multiplying the rate by the amount of ordinary preferred stock or preference share capital, which was already discussed in the corporation accounting on how to allocate dividends so it is really a good point to learn again. However, the promised fixed annual dividend payment to be given to preferred stockholders are not legally enforceable. Another point that I learned is about common stocks or ordinary shares. Its par value has little economic relevance today since its fair value is not equal to its par value. Moreover, these stocks are authorized by the shareholders and board to sell to the public. There different terms to be associated with it regarding with its state of whether it is authorized to be issued to the public (shares authorized), is already issued to the public (shares issued), and how much is the overall stocks currently held by the public (shares outstanding). Also the amount received from selling the stocks that went above its par value is called additional paid-in capital. In addition, the rights of these common stockholders can be exercised in person or by a proxy.

In this video, here are the learning points I have pointed out: First, I learned about the valuation of both the preferred stocks and common stocks specifically the formulas associated in the valuation. I realized that the preferred stock is perpetual in nature, thus, its market price will be calculated by dividing the periodic dividend payment next year by the required discount rate. This is quite similar in calculating the present value of perpetuity which makes it easier for me to familiarize the formula. On the other hand, the valuation of common stocks involve the determination of the return on investment and value of a share of a common stock. In calculating the return on investment, divide the dividend on the next period plus the capital gain (difference between the price of the shares and the cost to buy the shares) by the cost to buy the shares. In calculating for the value of a share or a common stock, we need to the divide the sum of the dividend for the next period and the selling price by the rate plus 1 raise to the power of the number of of periods stated. The selling price here is determined by getting the present value of the expected stock price for the next period plus the dividend. Second, I also learned about valuing an enterprise through free cash flow approach. So free cash flow is the net remaining amount of cash flow after the company has met all operating needs and paid for investments both long-term and short-term. Basically, in this approach, it compares the total valuation of the firm with its ability to generate cash flow. In order to determine the enterprise' value or the firm's value, just estimate the free cash flow that the firm will generate over time and discount such at the firm’s weighted average cost of capital(assuming this is given). In case of determining the firm’s shares, the firm’s value will be subtracted by the values of the firm’s debt, and the preferred stock from the total value of the firm.

In this video, I have learned the following concepts: First, I have learned the concept between debt and equity. Debt securities represent a legally enforceable claim. Debt securities allow an institution to borrow money from investors and repay the loan with interest. It also offers fixed or floating cash flows. Some debt securities pay a fixed rate of interest over a fixed period in exchange for the use of the principal. Second, I have learned the concept between preferred and common stock. Preferred stock gives its owners certain advantages over common shareholders. These special benefits relate either to the receipt of dividends when declared before the common shareholders or to priority claims on assets in the event of corporate liquidation. Such dividends can be in a fixed amount or established in a benchmark interest.

The video is all about Stocks Valuation and these are my learning points: 1. I learned the theory and ideas about the DEBT VERSUS EQUITY! Debt and equity securities have substantially different marginal benefits and marginal costs. That's why these two must not be used interchangeably. The first main idea is that debt securities are legally enforceable claims that offer fixed or floating cash flows, and persons who hold such debt securities/bondholders do not have any control of the company issuing the debt securities. While equity securities, offer sort of cash sources, however, it is not legally enforceable. However, holders of equity securities have control over the company issuing the equity securities, indirectly. One example of it is that some of them have voting rights for the important decisions that the specific company will conduct. 2. Consequent to my learning points at number 1, I learned the complete concept behind the SHARES and SHAREHOLDERS, and the different essential terms involved with it. First is that Shares or stocks will have dividends as the shares from the profit of the corporation, and those dividends are depending on the value of the accumulated profits and losses. That is why the dividends that will be sent out will be varied every now and then if the value is increasing then the shares have capital gains and if it's not then it has capital losses. These are some of the essential terms about the SHARES: Shares authorized are shares of the corporation that the board and holders authorize the firm to sell to the public. Shares issued are shares of the corporation that have been issued or sold to the public. Shares outstanding are shares that are currently held by the public. This means that these are shares that are issued and sold to the public but excluding the treasury shares. Treasury shares means shares that have not been sold after biddings and were bought back by the company.

After watching the video, the following are the learning points I’ve noted: First, I’ve learned about the stock valuation of preferred stock formula. The value of a preferred stock is basically equal to the present value of its future dividend payments discounted at the required rate of return of the stock. Also, in most cases the preferred stock is perpetual in nature, therefore, it is computed like how we compute the present value of a perpetuity which, in this case is, the price of a share of preferred stock equals the periodic dividend divided by the required rate of return. So, the formula for getting the preferred stock’s market price is Dp (next period’s dividend payment) divided by Rp (discount rate). So, for example, we will get the stock price of an investment that has 12% return on preferred stock that pays $3, that will become 3 divided by 0.12 which is equal to 25, this means that the price is $25 per share. Second, I’ve learned about the valuation of a stock using the variable growth model. So, in this computation, this will consists of two amounts; the present value of dividends during the rapid growth phase and the present value of the constant growth perpetuity which will begins after the rapid growth phase. The computation using the formula was somehow similar to the bond valuation topic we had last quarter, for the bond valuation topic, the bond price consists of the present value of the ordinary annuity of the interest and present value of the principal. While in stock valuation, specifically, using the variable growth model formula, the structure of the formula is somehow the same. So, for example to better understand this, example there is a 3 year of rapid growth phase in which the dividends are $2.50, $2.55, and $3.00. And the steady growth phase distributes a dividend of $2.88. The return of stock is 10% and the expected growth of dividends is 2%. First, we are going to divide the dividends by the 1.10 (derived from (1+10%). Next is get the valuation for constant growth that is $2.88 divided by 0.07 (derived from 0.10 minus 0.03) equals 41.14. Lastly, the overall answer would be 48.46.

These are the learning points that I’ve got from the video: I learned that in the case of a liquidation, preferred stockholders can have a wide variety of voting rights, from none to complete influence over the entity's final disposal. Preferred stockholders must be paid off before common stockholders, but not after secured debt holders, in the event of liquidation. The company that owns the preferred stock is more likely to go into liquidation than the one that doesn't. Lastly, Stock valuation is essentially a way of assessing a stock's intrinsic (or theoretical) worth. An investor can evaluate if a stock is over-or under-valued at its present market price by understanding its intrinsic value. valuing stocks is a highly complex process that may be seen as a blend of art and science.

For this video, these are some of my insights: 1. Preferred and Ordinary Shares: Preferred shares typically offer a fixed stream of cash with no maturity date that is why it can be treated as simple perpetuity, other than its usual valuation method used. Ordinary shares, on the other hand, are considered more difficult compared to preferred shares for the reason that the cashflows its shareholders receive are not set in advance by a contract. The approach used in valuing ordinary shares usually depends on the investor’s expectations of dividend growth. However, the same principle of valuation is applied to both preferred and ordinary shares in which the value of the share depends on the cash flow in which the share is expected to pay its owner over time. 2. Valuing shares: The process in valuing stocks includes first, we estimate the cash flows that are expected to be received. Second, we determine the discount rate that of course is dependent on the risk mirrored to those cash flows. Lastly, we estimate the share’s price by calculating the present value of its expected future cash flows. Finding the discount rate of the bonds can be easily done but not for the shares especially for ordinary shares since its cash flows are uncertain and the maturity date is unidentified. That is why it is needed to be estimated by other means. Also, it is said that the price of a share today is equal to the present value of the entire dividend stream that the share will pay in the future.

These are the learning points that I’ve got from the video First, I learned about what is debt security as a financial asset established when one party lends money to another. Debt securities are sometimes known as fixed-income securities because their interest payments provide a consistent stream of income. Unlike equity investments, where the investor's return is reliant on the stock issuer's market performance, debt instruments ensure that the investor will get repayment of their initial principal plus a fixed stream of interest. Lastly, Common stockholders, common shareholders, or simply stockholders or shareholders, are the people who possess common stock. Only a small number of businesses issue preferred stock in addition to common stock. Cash dividends on common shares are frequently increased as businesses grow more profitable. The disadvantage of common stock is that it is the last in line to receive compensation if a business is dissolved.

From this part one of the stock valuation video, I learned the following concepts and points: 1. BASIC CONCEPTS OF STOCK VALUATION First, I learned the difference of debt securities and equity. Debt securities consist of claim that is legally enforceable and it offer a fixed cash flows. On the other hand, equity constitutes two types. The first type is common share, which basically no claim for earnings not until all the superior liabilities or claims is paid or extinguished. Substantially, this share is more on high risk but high return. The second type of equity is the preferred share. This is way different from common share since it has the priority on the claim on asset. The dividend payment of this share is based on a certain percentage and such dividend payments are not tax deductible. 2. ISSUING NEW SECURITIES I learned the concepts and terminologies of issuing new securities. First, primary market means the original market where the firm issue their securities. Market capitalization means the number of shares outstanding multiplied by its price. Treasury stock are the common shares issued but held delinquent by the investors and as a result, the corporation buyback such shares. Moreover, Investment banks are the intermediary for investment activities of the corporation and the investors. We have the so called investment bankers that plays a big role in investing activities such as trading, asset management, and corporate finance. The IPO or initial public offering is the first ever sale of the corporation’s stock to the public while the sale of stock that has already been sold to the public is called an “unseasoned offering”.

From this video, I learned the following concepts and formulas that are helpful in valuing stocks: 1. PREFERRED and COMMON STOCK VALUATION Preferred stock is an equity securities that pay an annual fixed dividend. Thus, the formula for getting the value or the market price of the preferred stock is basically the Dividend payment divided by the discount rate. On the other hand, the formula for getting the value or market price of a common stock would be the total cash flow received in form of dividends divided by the 1 + rate to the power of 1 or n. As to return on investment for common stock, the formula would be dividends received plus the price to sell the stock minus the value of the common stock today, divided by value of the common stock today. 2. VALUATION MODELS I learned the different valuation models that is used to valuate stocks and its market value. First, Zero growth valuation model - this model is the simplest approach since it assumes a constant non-growing dividend stream. The formula for getting the market value of the stock would only be dividend divided by the rate. Second, Constant growth valuation model or the Gordon growth model- this model emphasize that dividends will grow at a constant rate that is less than the required return. The formula for getting the market value of the stock would be dividends divided by the difference of constant rate and the required rate of return. Lastly, Variable growth valuation model - this model assumes that the growth rate of dividend will vary in every period of time. In getting the market value of the stock, we just need to add the Present Value of dividends during the initial phase and present value of the stock price at the end of the initial growth phase

The following are my learning points after watching this second part of Valuing Stocks. Firstly, I learned about Zero Growth Valuation Model and Constant Growth Valuation Model. Zero Growth Valuation Model, which basically is the simplest approach to stock valuation assumes a constant, non-growing dividend stream. This means that the dividend payment always stays the same. Therefore, the stock price would be equal to the annual dividends divided by the required rate of return. Furthermore, this model assumes that dividends will grow at a constant rate (g) that is less than the required rate of return. However, if the dividends will grow at constant rate forever, then one can value the stock as a growing perpetuity which is commonly known as Gordon Growth Model or Constant Growth Valuation Model. Secondly, I learned about Variable Growth Valuation Model, in which it assumes that the dividend growth rate will vary during different periods of time. This model can be simplified by getting the summation of present value of dividends during the initial growth phase and the present value of stock price at the end of the initial growth phase also known as terminal value. In short, this is a valuation technique used when a firm's current growth rate is expected to change some time in the future. Furthermore, I’ve learned that to estimate its growth, we need to get the product of the retention rate by which the company is keeping from the retained earnings and the return on equity.

The following are my learnings on the video about valuation on stocks (part II): First, I learned how to value the stocks on both preferred and common stocks. Preferred stock is equal to the present value of its future dividend payments discounted at the required rate of return of the stock. In most cases the preferred stock is perpetual in nature, hence the price of a share of preferred stock equals the periodic dividend divided by the required rate of return. On the other hand, common stocks is equals to the sum of dividends received and the price of common stocks of today divided by the quantity of one plus the rate raise to the power of one period. Second, I learned the three different valuation model, these are zero growth valuation model, constant growth valuation model and variable growth variable model. Zero growth valuation model is the most simple approach in stock valuation. It is used when the stream of dividends assumes to be constant and non-growing. The second valuation model is constant growth valuation model. This model is also called as Gordon growth model. This is used when the dividend stream is assumed to be growing at a constant rate. The last model is the variable growth valuation model. It is used when there is a growth of the stream that vary in every periods.

After watching the second video discussing the computation for stock valuation, I have realized the following the learning points: First, I learned that computing for the value of the return on investment of common stocks involves computing for capital gain. The ROI for common stocks is valued by adding the capital gain, computed by deducting the buying price from the selling price, to the dividend payment in the next period. The result will then be divided by the buying price in order to get the ROI for the common share. Capital gain is essential in the computation for common shares in order to determine the profit made in selling the securities. Second, I learned that if no dividends will be indicated for the next period, the concepts of free cash flow and weighted average cost of capital will be used. The steps in computing the value of the stock will then involve estimating the free cash flow and then discounting such at the rate of the WACC. The result from the discounting will be the firm’s total value. From there, we subtract the value of the firm’s debt, preferred stock to obtain finally the value of the firm’s shares. This is similar to squeezing and/or approximating the firm’s shares from the other accounts of the company.

In this second part about valuing stocks or stocks valuation, in connection to the previous one I noted the following key learning insights: First, I learned that in valuing preferred stocks it is just the same as calculating the present value of a perpetuity where in the numerator is the dividend payment for the next period and the denominator is the discount rate applicable for such preferred stock. On the other hand, valuing common stocks still involves present value but PV of entire dividend stream that such stock will pay in the future. I also noted the formula and how the rate and present value of such common stock is to be determine before actually valuing the price of the such, that is if such dividend stream is not constant but if such is constant it all boils down to the zero growth valuation model and will have a formula similar to the preferred stocks valuation. Aside from that, there is also constant growth valuation model or Gordon growth model, I find it similar to the growing perpetuity, where in it assumes that dividend has a constant growth rate that is less than the rate of return and has the same formula as growing perpetuity. Second, I realize that if there is constant rate there will also be those that is not constant and is variable which is where variable growth valuation model comes in when valuing stocks. In this case the computation is similar to computing the present value of the dividend stream and if such involves growing perpetuity then that becomes part in computing the valuation of such stocks. These valuation model and formula to compute for the price of the stocks is possible if dividends payments or stream is present but if such is not present then I noted other valuation techniques such as free cash flow approach, which I find similar like when one is determining the price of liquid assets and you consider the present value of all cash flows expected to flow to the entity, in this case in terms of stock valuation. Still, other common stock valuation approaches are also available and were tackled which are valuing it at book value or liquidation value, or at price/earnings multiples. Overall, stocks can be preferred, which has both debt and equity like features so I need to carefully value such stocks, or it can be common stocks, which is basically the residual equity of the firm, and that stocks valuation of either or both preferred and common, nevertheless, apply the same principles.

The following are my learning points after watching this video: First, I learned the stocks valuation of preferred and common stock. Preferred stock is an equity security that is intended to pay a fixed yearly dividend in perpetuity. The formula for preferred stock in which the amount of the dividend of the next period divided by the discount rate. In addition, I learned that the method for calculating the value of common stock in terms of return on investment, rate equals the dividend on the next period plus the difference between the selling price of the share less its cost before it bought divided by the cost before. While the formula for calculating the value of a share of common stock is the sum of the next period's dividend and the share's selling price divided by the quantity 1 plus r to the power of 1. Second, I was able to grasp the concepts of zero growth valuation model, constant growth valuation model, and variable growth valuation model. The zero growth valuation model is constant value of dividends throughout time. The formula for this model is the stock's value equals the dividend in the next year above the rate. There is a constant rate of growth in the constant growth valuation model (Gordon Growth Model), which is generally lesser than the needed return. In which the formula of constant growth valuation model is stock value equals dividends over r-g. The growth rate in the variable growth valuation model, on the other hand, will vary with time. To calculate the stock value using this valuation model's formula, we must sum the present value of dividends during the initial growth phase and the present value of stock price at the end of the initial growth phase.

Learning points in this video: I learned the different computations, in which the preferred stock formula for valuing a perpetuity is computed as: next period’s dividend payment to be divided by the discount rate. It is quite easy from the given example as the value given will just be divided to the discount rate and come up with the price per share. In terms of computing common stock, the return on investment would be computed as: dividend on the next period plus the difference of the price of the stock that he immediately sells and the price of the stock at the time he bought it divided by the price the moment he bought it. I also learned the Constant Growth Valuation Model or the Gordon growth model that assumes dividends will grow at a constant rate forever that is less than the required return. Its formula will be: Next year’s dividend divided by the difference of the required return and the growth at a constant rate. I noticed that its formula is somewhat a modification from valuing a perpetuity in preferred stocks in that its unique feature is the percentage growth which is deducted from the rate in the denominator part of the formula.

Learning points in this video: In the first part of the video, I learned the difference of debt and equity in which debt represents a legally enforceable claim. If for example we are the creditors, then we can basically get the claims from the debtor and usually it is in the form of principal and interest. However, In terms of equity, common stockholders are residual claimants, meaning no claim to earnings until all senior claims are paid in full. I have also learned the concept of dividing dividends by which, the preferred shareholders which we now known as preference shareholders, are receiving in advance compared to the common or ordinary shareholders. The issued shares would be in the form of percentage from the issuing corporation. So, the residual from all the payments given to the preferred shareholders will be taken for the common stockholders who are the last in line when dividing the assets of the company in cases of liquidity.

First, I’ve learned about the different models for common stock valuation. As for the value of a common stock, dividends are not fixed unlike preferred shares. The zero-growth model is the simplest approach to common stock valuation as it uses the same perpetuity formula without taking into account the possibility for growth. The constant growth valuation model is similar to that of the previous model but there is consideration of a growth rate component in the computation. Finally, the variable growth valuation model is another variation of the constant growth model where a growth rate component is assumed however, such rate is considered to vary during different periods of time. Second, I’ve also further understood that there are other approaches to valuing common stocks and they are the book value, liquidation value, and price/earnings multiples approach. The book value approach simply equates the value of the common stock of a firm to whatever is the value of the firm’s equity as recorded on the statement of financial position. The liquidation value suggests that the firm’s common stock valuation equals to the amount of cash that remains after all assets of the firm have been sold or realized and all liabilities have been paid. Lastly, I’ve realized that based on the price/earnings approach, common stock values are somehow dependent on public perception, hence, highly influenced by a lot of factors such as the image and reputation of the company and its performance over the past and current years.

After watching the video about Valuing Stocks or Stocks Valuation, I was able to comprehend and realized these following points: First, I learned that stock valuation for preferred stocks and common stocks which are important tool that can help you make informed decisions about trading. The main difference between preferred and common stock is that preferred stock gives no voting rights to shareholders while common stock does. Preferred shareholders have priority over a company's income, meaning they are paid dividends before common shareholders. Common stockholders are last in line when it comes to company assets, which means they will be paid out after creditors, bondholders, and preferred shareholders. Second, the zero-growth valuation model, constant growth valuation model, and variable growth valuation model were also introduced to me. The zero-growth valuation model is the simplest approach to company valuation that assumes a continuous, non-growing dividend stream, according to what I learned. The common stock valuation formula reduces to the simple equation for a perpetuity, which is the dividend of the next year divided by the rate, where D is constant for each dividend payment. On the other hand, I understood that in a constant growth model, dividends are assumed to grow at a constant rate that is smaller than the required return. Furthermore, I learned that the variable growth valuation model assumes that the dividend growth rate will fluctuate over time.

Two learning points from this discussion: First, aside from the formulas presented in this discussion for stock valuation, I also have learned about Zero Growth Valuation Model, which is the simplest approach to stock valuation. The zero-growth model assumes a constant, non-growing dividend stream. Since there is no growth in dividends, the stock price would be equal to the annual dividends divided by the required rate of return. Zero growth dividends share similar properties with perpetuities and preference shares. Second, another way of valuing stock is the Constant Growth Valuation Model. In this model, it is presumptively assumed that a company's dividends will continue to climb at a steady pace indefinitely. Based on those future dividend payments, we can use that assumption to determine what a fair price to pay for the stock now. This also implies that equity and debt grow at the same rate so that debt ratio remains constant over time.

After watching the videos, the following are the learning points I’ve noted: First, I’ve learned about the the debt securities. These are the investments in debt instruments which means to borrow money that must be repaid at the maturity date. Debt securities are normally enforceable claims which means that the creditors can get the cash claims from the debtors. The claims will be in a form of cash flow of principal of fixed amount and interest which amount varies. An example of debt securities is bonds. Second, I’ve learned about the common stockholders. Common stockholders are now called the ordinary stockholders. They are the residual claimants because in the case that the corporation issues dividends, the common stockholders will be receiving late or after when the preferred stockholders have already received their share declared by the corporation. What will remain to the dividends after deducting the shares for the preferred stockholders will be distributed to the common stockholders.

After watching the video about Valuing Stocks or Stocks Valuation, I was able to comprehend and realized these following points: First, I learned about the difference between debt and equity securities. A legally enforceable claim is represented by debt securities that provide fixed or variable cash flows. It's critical to remember that bondholders have no influence in how the business is handled. In which bondholders are essentially creditors with no control or power over the activities of the firm or debtor. On the other hand, equity securities are those that are owned by the corporation's shareholders. I learned that these are in the form of shares or stocks, and that the corporation's income will be used to pay dividends to these shares or stocks. Dividends will be given to shareholders in varied amounts or values. Second, I learned that preferred stock has characteristics of both equity and debt. Debt-like feature of a typical preferred stock issue is the fixed preferred dividend rate that the preferred stock pays over its life while its equity-like feature is its perpetual existence. They are riskier than bonds and other form of debt but safer than the common stock. This is because holders of preferred stock have preference over common stockholders in distribution of dividends and winding-up proceeds, but they rank below debt-holders because interest expense is paid before any dividends can be paid to preferred stockholders.