H. Kent Baker - Equity Markets, Valuation, and Analysis

10 Discussion Questions and Answers (Chapters 2–24)CHAPTER 2 OWNERSHIP STRUCTURE AND STOCK CLASSES CHAPTER 3 EQUITY MARKETS AND PERFORMANCE CHAPTER 4 SECURITIES REGULATION CHAPTER 5 INVESTOR PSYCHOLOGY AND EQUITY MARKET ANOMALIES CHAPTER 6 FINANCIAL STATEMENT ANALYSIS AND FORECASTING CHAPTER 7 FUNDAMENTALS OF EQUITY VALUATION CHAPTER 8 COMPANY ANALYSIS CHAPTER 9 TECHNICAL ANALYSIS CHAPTER 10 DISCOUNTED DIVIDEND VALUATION CHAPTER 11 FREE CASH FLOW VALUATION CHAPTER 12 MARKET-BASED VALUATION CHAPTER 13 RESIDUAL INCOME VALUATION CHAPTER 14 PRIVATE COMPANY VALUATION CHAPTER 15 EQUITY INVESTING STRATEGIES CHAPTER 16 FACTOR INVESTING CHAPTER 17 SMART BETA STRATEGIES VERSUS ALPHA STRATEGIES CHAPTER 18 ACTIVIST AND IMPACT INVESTING CHAPTER 19 SOCIALLY RESPONSIBLE INVESTING CHAPTER 20 POOLED INVESTMENT VEHICLES CHAPTER 21 INVESTING IN PRIVATE EQUITY CHAPTER 22 INVESTING IN EMERGING MARKETS CHAPTER 23 DISCLOSURE REGULATIONS IN EMERGING ECONOMIES AND THEIR IMPACT ON EQUITY MARKETS CHAPTER 24 EQUITY CROWDFUNDING INVESTMENTS

11 Index

12 End User License Agreement

1 Chapter 2 TABLE 2.1 Discovery, Inc. Common Equity Share Class Structure TABLE 2.2 Discovery, Inc.'s Largest Beneficial Shareholders

2 Chapter 3 TABLE 3.1 Issuance Volume of Equity Securities in Billions of DollarsThis... TABLE 3.2 Issuance Volume of Corporate Bonds in Billions of DollarsThis t... TABLE 3.3 Returns and Risk Between 1926 and 2018This table shows the stat...

3 Chapter 5 TABLE 5.1 Usefulness of Market Information for Different Views of Market Effi...

4 Chapter 11TABLE 11.1 General Approach to FCF ValuationThis table provides an exampl...TABLE 11.2 Sensitivity Analysis for FCF ValuationThis table presents a sens...TABLE 11.3 Income Statement for Lowe'sThis table reproduces the Consolida...TABLE 11.4 Balance Sheet for Lowe'sThis table reproduces the Consolidated...TABLE 11.5 Additional Information Related to Lowe'sThis table provides addi...TABLE 11.6 Valuation of Lowe's Using the WACC ApproachThis table illustrate...TABLE 11.7 Valuation of Lowe's Using the APV ApproachThis table illustrates...TABLE 11.8 Valuation of Lowe's Using the CCF ApproachThis table illustrates...TABLE 11.9 Valuation of Lowe's Using the FCFE ApproachThis table illustrate...TABLE 11.10 Summary of Key Features of Valuation ApproachesThis table summa...

5 Chapter 12TABLE 12.1 Key Financial Information for Comparable Companies and the Target ...TABLE 12.2 Calculations of Value Drivers and EVsThis table shows the value ...TABLE 12.3 Calculations of Multiples and the Average and Median ValuesThis ...TABLE 12.4 Target Valuation Using Equity-related MultiplesThis table shows ...TABLE 12.5 Target Valuation Using EV-related MultiplesThis table shows the ...TABLE 12.6 Correlations among Equity-related MultiplesThis table shows the ...TABLE 12.7 Correlations among EV-related MultiplesThis table shows the line...TABLE 12.8 Regression Analysis for Multiples on Various Potential Factors

6 Chapter 16TABLE 16.1 Value Premium Performance as of June 30, 2019This table shows ...TABLE 16.2 Annual Value (HML) Factor Returns Between 2000 and 2018This ta...TABLE 16.3 Size Premium PerformanceThis table shows that as of June 30, 2...TABLE 16.4 Annual Size Premium Performance Between 2000 and 2018This tabl...TABLE 16.5 Momentum Premium PerformanceThis table shows that as of June 3...TABLE 16.6 Annual Momentum Premium Performance Between 2000 and 2018This ...TABLE 16.7 Monthly Performance of Low-Volatility Stocks Between 1972 and 2019...TABLE 16.8 Annual Performance of Low-Volatility Stocks Between 1972 and 1990 ...TABLE 16.9 Factor Spreads for Quality/ProfitabilityThis table shows the r...

7 Chapter 17TABLE 17.1 Performance of Smart Beta Strategies between 1967 and 2010This...TABLE 17.2 Summary Statistics of ETF Mean Returns between 2009 and 2018This...TABLE 17.3 Pairwise Comparison of Mean ReturnsThis table presents the resul...TABLE 17.4 Analysis of Variance (ANOVA) among the Fund CategoriesThis table...TABLE 17.5 Pairwise Comparison of Mean Sharpe RatiosThis table presents the...

8 Chapter 20TABLE 20.1 Net Assets in Investment Companies in the United StatesThis ta...TABLE 20.2 Comparison of Open-End Mutual Funds and Exchange-Traded FundsThi...

1 Chapter 2 FIGURE 2.1 Dual-listed Shareholder Structures FIGURE 2.2 Cross-Border Dual-listed Companies

2 Chapter 3 FIGURE 3.1 Industrial Production Index FIGURE 3.2 Unemployment Rate FIGURE 3.3 Personal Consumption Expenditures FIGURE 3.4 Corporate Profits versus Standard & Poor's 500 Index FIGURE 3.5 Government Revenues FIGURE 3.6 Stock Market Capitalization to GDP FIGURE 3.7 Dow Jones Industrial Average FIGURE 3.8 S&P 500 Index FIGURE 3.9 Recent Annual Returns on the Dow Jones Industrial Average

3 Chapter 8FIGURE 8.1 Three Steps Mapping Business Activities into Share PricesFIGURE 8.2 Adjusted R 2from Annual Regressions of Prices on Accounting Funda...FIGURE 8.3 Spread in ROA to High and Low Deciles of Unexpected Price between...FIGURE 8.5 ROA by Profit Margin and Asset Turnover Across U.S. Industries be...FIGURE 8.6 Return on Assets for U.S. Companies between 1982 and 2018FIGURE 8.7 Return on Equity for U.S. Companies between 1982 and 2018FIGURE 8.8 Sales Growth for U.S. Companies between 1982 and 2018FIGURE 8.9 Asset Growth for U.S. Companies between 1982 and 2018FIGURE 8.10 Book Value of Equity Growth for U.S. Companies between 1982 and ...

4 Chapter 9FIGURE 9.1 Higher Highs (HH) and Higher Lows (HL) Define an UptrendFIGURE 9.2 Lower Lows (LL) and Lower Highs (LH) Define a DowntrendFIGURE 9.3 Prices Trend Slowly to Fair Value Due to Investor Behavioral Bias...FIGURE 9.4 Dow Theory Trend Change Confirmed by Bearish Moving Average Confi...FIGURE 9.5 Dow Theory Sell SignalFIGURE 9.6 Using Relative Strength Comparative to Distinguish between Absolu...FIGURE 9.7 Historical Performance of Momentum DecilesFIGURE 9.8 Historical Performance of Top Decile versus Bottom Decile Momentu...

5 Chapter 10FIGURE 10.1 Two-Stage ModelFIGURE 10.2 H-modelFIGURE 10.3 Three-Stage Model

6 Chapter 11FIGURE 11.1 Growth Patterns for FCFs

7 Chapter 16FIGURE 16.1 The Evolution of AlphaFIGURE 16.2 Rolling Three-Year Returns of Value and Momentum between 1927 an...FIGURE 16.3 Rolling Three-Year Correlation Between Value and Momentum: 1927–...

8 Chapter 17FIGURE 17.1 Smart Beta Strategies in Use by Institutional Investors

9 Chapter 20FIGURE 20.1 Closed-end Fund Asset TypesFIGURE 20.2 Unit Investment Trust Asset Types

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2 Table of Contents

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