What is the primary focus of stage 3 in equity research?
Understanding the business
Understanding the company's financial performance
Stock price valuation
Market analysis
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What valuation technique is used to determine a company's intrinsic value?
Price-to-Earnings Ratio (P/E)
Discounted Cash Flow (DCF)
Comparable Company Analysis
Asset-Based Valuation
Qn. 2 / 8
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What is the core concept of the DCF model?
Return on Equity (ROE)
Earnings per Share (EPS)
Net Present Value (NPV)
Price-to-Book Ratio (P/B)
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What is the opportunity cost in the pizza machine example?
The cost of ingredients for making pizzas
The cost of maintaining the pizza machine
The potential interest earned from a fixed deposit scheme
The cost of hiring an employee to operate the machine
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What is the Time Value of Money (TMV)?
The concept that money remains the same across time
The idea that the value of money changes over time due to opportunity cost
The principle of investing money in high-yield savings accounts
The strategy of diversifying investments across different asset classes
Qn. 5 / 8
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What is the process of estimating the value of money we have today at some point in the future called?
Discounting
Compounding
Amortization
Depreciation
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What is the process of estimating the value of money receivable in the future in terms of today's value called?
Compounding
Amortization
Depreciation
Discounting
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What is the Net Present Value (NPV) of money?
The sum of all future cash flows
The average value of all future cash flows
The sum of all the present values of future cash flows
The difference between the present value of cash inflows and outflows
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