I just got through the last reading on Equity in Level 1… and I’m disappointed. That’s it?.. DDM, a brief mention of the multiples and FCFE models, and dancing around asset valuation? That was the section I was looking forward to the most! I’m in a student ran investment fund and we have stock pitches coming up - I was ready to tear it apart using some heavier stuff learned in the Equities section. No can do… Iearned the L1 equity stuff in my Principles of Finance class freshman year.
Tell me it gets better in Level 2 and 3. What kind of stuff do we get into there? I wanna get excited.
I actually was a little surprised at how little was covered in L1 equity too. But remember that in practice - though not so much on the exam - FSA feeds into equity valuation very directly. On the L1 exam (and to a certain extent in L2 as well), they are encapsulated. But when you get down to valuing a company, you will most likely need all that FSA stuff to do it.