1. Streams of expected cash flows *a. compare dividends, free cash flow, and residual income as inputs to discounted cash flow models and identify investment situations for which each measure is suitable;*
| |

2. The dividend discount model *b. calculate and interpret the value of a common stock using the dividend discount model (DDM) for single and multiple holding periods;*
*
p. evaluate whether a stock is overvalued, fairly valued, or undervalued by the market based on a DDM estimate of value.*
| |

3. The Gordon growth model *c. calculate the value of a common stock using the Gordon growth model and explain the model's underlying assumptions;*
*
d. calculate and interpret the implied growth rate of dividends using the Gordon growth model and current stock price;*
*
g. calculate the value of noncallable fixed-rate perpetual preferred stock;*
| |

4. The present value of growth opportunities *e. calculate and interpret the present value of growth opportunities (PVGO) and the component of the leading price-to-earnings ratio (P/E) related to PVGO;*
*
f. calculate and interpret the justified leading and trailing P/Es using the Gordon growth model;*
| |

5. Gordon growth model and the P/E ratio *e. calculate and interpret the present value of growth opportunities (PVGO) and the component of the leading price-to-earnings ratio (P/E) related to PVGO;*
*
f. calculate and interpret the justified leading and trailing P/Es using the Gordon growth model;*
| |

6. Strengths and limitations of the Gordon growth model *h. describe strengths and limitations of the Gordon growth model and justify its selection to value a company's common shares;*
| |

7. The growth phase, transitional phase, and maturity phase of a business *j. explain the growth phase, transitional phase, and maturity phase of a business;*
| |

8. Multistage dividend discount models *i. explain the assumptions and justify the selection of the two-stage DDM, the H-model, the three-stage DDM, or spreadsheet modeling to value a company's common shares;*
*
k. describe terminal value and explain alternative approaches to determining the terminal value in a DDM;*
*
l. calculate and interpret the value of common shares using the two-stage DDM, the H-model, and the three-stage DDM;*
*
n. explain the use of spreadsheet modeling to forecast dividends and to value common shares;*
| |

9. Estimating and calculating the implied expected rate of return *m. estimate a required return based on any DDM, including the Gordon growth model and the H-model;*
| |

10. Strengths and limitations of multistage DDMs *m. estimate a required return based on any DDM, including the Gordon growth model and the H-model;*
| |

11. Sustainable growth rate *o. calculate and interpret the sustainable growth rate of a company and demonstrate the use of DuPont analysis to estimate a company's sustainable growth rate;*
| |

12. Using the DuPont model to estimate the return on equity *o. calculate and interpret the sustainable growth rate of a company and demonstrate the use of DuPont analysis to estimate a company's sustainable growth rate;*
| |