Lecture 7, 8

Question 1

What is the EIC approach

Answer 1

economy
industry
company

Question 2

What are the economic influences

Answer 2

fiscal policy
monetary
inflation
international events

Question 3

What are the industry influences

Answer 3

labour vs management relationships
import-export quotas
shortage or excess of some resources
government regulations on industry
demographic trends

Question 4

What are the components of the required rate of return?

Answer 4

risk-free rate of return
expected inflation rate
risk premium

Question 5

What are the general approaches to value stocks?

Answer 5

discounted cash-flow valuation technique

relative valuation technique