Equity Valuation: Models from Leading Investment Banks

Appendix

Table A.1 ModelWare valuation: definition of key measures¹

Table A.2 ModelWare intrinsic value's approach to selected adjustments

Table A.3 Residual income model: questions and answers

Many people, when first seeing a residual income model, question why this model is any better than other valuation models. Questions that we hear include:

Book value and earnings are distorted by accounting measurement problems, being based on a mix of historical costs and market or fair values, ...