Equity Valuation Models
How professionals value stocks and whole companies — discounted cash flow, relative valuation, residual income, and dividend discount models, each with formulas and worked examples.
Discounted Cash Flow Models
Free Cash Flow to the Firm (FCFF): FormulaFCFF measures the cash a business produces for all capital providers — lenders and shareholders — after operating costs, taxes, and reinvestment.
Free Cash Flow to Equity (FCFE): FormulaFCFE measures the cash available to shareholders after operating costs, reinvestment, and all debt-related flows — the equity counterpart to FCFF.