Equity is a fat proportion of the exam and one of my colleagues said it was there weakest part in the exam last year (he’s retaking this year). I’m only part way through and there is A LOT of material there. Whats everyone else thinking?
make or break section (almost 25% weightage). 5 item sets will be there on this for sure.
it doesnt seem so bad to me. just completed my 2nd pass. A few things in residual income are tricky, but most of my problems come from the defintition stuff early on, like order, vs price driven markets, ADR’s, Public private bourses, etc.
It’s big but not so bad. RI models are the trickiest to remember, but a lot of it has a big overlap with L1 equity and Corp. Fin. at both levels too. However you deal with high-volume of content that needs to be remembered (I need volume, do a few equity things at start of every study session) use it and eventually it pays off. I’ve been getting 5/6 on my Schweser vignettes for a while so I think this is working for me at least.
I’m on Equity right now. To me there are only a few large portions of equity. I expect 6 item sets or 36 questions so take your time on this stuff, there is alot to learn. Background info - industry analysis, close end funds, adr, ex-ante/post RoR, calculation after tax stuff. Expect 1 item set that touch on all of this. They might pick an obsure area to trick you to focus on. More Background info - Calculations on PVGO, Gordon Growth Model, calulation different discount rates, instrinsic value, growth value, leading/trailing p/e. Expect 1 item set. Discount Models - 1 stage, 2 stage, 3 stage, H-model, w/constant growth gordon growth model. Also might have tricky questions such as reverse calc to find RoR, etc. This is a must know. Expect 1 item set. FCFF/FCFE Models - Must calculate both of these from NI or EBIT or CFO. I bet they will try to tie in some stuff from FSA such as adjustments for quality earnings. Expect 1 item set. Residual Income Models - I haven’t gotten to this yet but this is another section. Must know so expect an item set. Relative Value w/Price Multiplies - I haven’t gotten to this either but a most know. Expect an item set. I think if you know everything fairly well on all these sections you will be ok.
Between this and FSA, the test will be won and lost… Ace both these sections, you get 40-50% of the test right, you only have to search for getting half of the other questions right… Obviously its important, so this section is worthy of 4 or 5 passes in my opinion before the test…
Compared to Financial Statements the Equity is a cake walk. Even though there will most certainly be a ton of questions over this section the material is very basic. Make sure you understand the concepts and know the formulas and you should have no problem. PS When I went through it I breathed a huge sigh of relied because it was a lot easier than I was expecting.
A lot of materials + tiny details, very testable.
This section killed me last year…I remember an RI question and I forgot to take the tax out or put it back in…it is tricky and not straight forward at all.
Agree that it is not particularly complex, but as trek indicates, I can see how it can get very tricky. There are so many potential adjustments to be made. Miss one little adjustment and your answer is wrong. Practice practice practice problems seems like the key.
yep i got that RI one wrong too last year and it haunted me. i did the q fast, got one of their trap answers, and later realized i didn’t adjust for taxes or interest or whatever the little thing was. equity isn’t the hardest section- pretty straightforward, but do expect the unexpected and little topics coming up in questions. last year, there were zero, count em, NO questions on FCFF/FCFE. imagine that? it’s not always the big stuff that gets tested. we could have a friggin’ history lesson item set on graham and dodd with a sprinkling of the molodovsky effect, etc… you never know what they will throw your way. agree that FSA and equity are areas where you just have to take the time and crush em. they’re huge.
i hope we get the graham and dodd chapter 
TheAliMan Wrote: ------------------------------------------------------- > i hope we get the graham and dodd chapter haha yeah me too
BiPolarBoyBoston Wrote: ------------------------------------------------------- > I’m on Equity right now. To me there are only a > few large portions of equity. I expect 6 item sets > or 36 questions so take your time on this stuff, > there is alot to learn. > > Background info - industry analysis, close end > funds, adr, ex-ante/post RoR, calculation after > tax stuff. Expect 1 item set that touch on all of > this. They might pick an obsure area to trick you > to focus on. > > More Background info - Calculations on PVGO, > Gordon Growth Model, calulation different discount > rates, instrinsic value, growth value, > leading/trailing p/e. Expect 1 item set. > > Discount Models - 1 stage, 2 stage, 3 stage, > H-model, w/constant growth gordon growth model. > Also might have tricky questions such as reverse > calc to find RoR, etc. This is a must know. Expect > 1 item set. > > FCFF/FCFE Models - Must calculate both of these > from NI or EBIT or CFO. I bet they will try to tie > in some stuff from FSA such as adjustments for > quality earnings. Expect 1 item set. > > Residual Income Models - I haven’t gotten to this > yet but this is another section. Must know so > expect an item set. > > Relative Value w/Price Multiplies - I haven’t > gotten to this either but a most know. Expect an > item set. > > I think if you know everything fairly well on all > these sections you will be ok. How do you figure this break? .I am about to start equity on Monday…so pardon me?