{"id":253,"date":"2019-10-10T20:02:00","date_gmt":"2019-10-10T20:02:00","guid":{"rendered":"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=253"},"modified":"2026-09-02T13:08:36","modified_gmt":"2026-09-02T13:08:36","slug":"learning-sessions-curriculum-equity","status":"publish","type":"post","link":"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/learning-sessions-curriculum-equity\/","title":{"rendered":"CFA Level 1 Study Notes &#8211; Equity Investments"},"content":{"rendered":"<h2><strong>Study Session 12<\/strong><\/h2>\n<h2><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/uncategorized\/63634\/\">Older Curriculum\u00a0<\/a><\/h2>\n<h2>2024 Curriculum<\/h2>\n<h3><strong>Learning Module 1 &#8211; Market Organization and Structure<\/strong><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/main-functions-financial-system\/\" target=\"_blank\" rel=\"noopener\">LOS a: explain the main functions of the financial system<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/classifications-assets-markets\/\" target=\"_blank\" rel=\"noopener\">LOS b: describe classifications of assets and markets<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/assets-traded-organized-markets\" target=\"_blank\" rel=\"noopener\">LOS c: describe the major types of securities, currencies, contracts, commodities, and real assets that trade in organized markets, including their distinguishing characteristics and major subtypes<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/types-financial-intermediaries\/\" target=\"_blank\" rel=\"noopener\">LOS d: describe types of financial intermediaries and services that they provide<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/positions-investor-can-take-asset\/\" target=\"_blank\" rel=\"noopener\">LOS e: compare positions an investor can take in an asset<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/margin-transactions\/\" target=\"_blank\" rel=\"noopener\">LOS f: calculate and interpret the leverage ratio, the rate of return on a margin transaction, and the security price at which the investor would receive a margin call<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/execution-validity-clearing-instructions\/\" target=\"_blank\" rel=\"noopener\">LOS g: compare execution, validity, and clearing instructions<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/market-orders-vs-limit-orders\/\" target=\"_blank\" rel=\"noopener\">LOS h: compare market orders with limit orders<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/primary-secondary-markets\/\" target=\"_blank\" rel=\"noopener\">LOS i: define primary and secondary markets and explain how secondary markets support primary markets<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/quote-driven-order-driven-brokered-markets\/\" target=\"_blank\" rel=\"noopener\">LOS j: describe how securities, contracts, and currencies are traded in quote-driven, order-driven, and brokered markets<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/characteristics-well-functioning-financial-system\/\" target=\"_blank\" rel=\"noopener\">LOS k: describe characteristics of a well-functioning financial system<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/objectives-market-regulation\/\" target=\"_blank\" rel=\"noopener\">LOS l: describe objectives of market regulation<\/a><\/p>\n<h3><strong>Learning Module 2<\/strong><strong>\u00a0&#8211; Security Market Indices<\/strong><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/security-market-index\/\" target=\"_blank\" rel=\"noopener\">LOS a: describe a security market index<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/price-return-total-return-index\/\" target=\"_blank\" rel=\"noopener\">LOS b: calculate and interpret the value, price return, and total return of an index<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/issues-index-construction\/\" target=\"_blank\" rel=\"noopener\">LOS c: describe the choices and issues in index construction and management<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/different-weighting-methods-used-index-construction\/\" target=\"_blank\" rel=\"noopener\">LOS d: compare the different weighting methods used in index construction<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/value-return-index-given-weighting-method\/\" target=\"_blank\" rel=\"noopener\">LOS e: calculate and analyze the value and return of an index given its weighting method<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/rebalancing-reconstitution-index\/\" target=\"_blank\" rel=\"noopener\">LOS f: describe rebalancing and reconstitution of an index<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/security-market-indices\/\" target=\"_blank\" rel=\"noopener\">LOS g: describe uses of security market indices<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/types-equity-indices\/\" target=\"_blank\" rel=\"noopener\">LOS h: describe types of equity indices<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/fixed-income-indices\/\" target=\"_blank\" rel=\"noopener\">LOS i: describe types of fixed-income indices<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/indices-representing-alternative-investments\/\" target=\"_blank\" rel=\"noopener\">LOS j: describe indices representing alternative investments<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/types-security-market-indices\/\" target=\"_blank\" rel=\"noopener\">LOS k: compare types of security market indices<\/a><\/p>\n<h3><strong>Learning Module 3<\/strong><strong> &#8211; Market Efficiency<\/strong><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/market-efficiency\/\" target=\"_blank\" rel=\"noopener\">LOS a: describe market efficiency and related concepts, including their importance to investment practitioners<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/distinguishing-market-value-intrinsic-value\/\" target=\"_blank\" rel=\"noopener\">LOS b: distinguish between market value and intrinsic value<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/factors-affect-markets-efficiency\/\" target=\"_blank\" rel=\"noopener\">LOS c: explain factors that affect a market\u2019s efficiency<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/forms-market-efficiency\/\" target=\"_blank\" rel=\"noopener\">LOS d: contrast weak-form, semi-strong-form, and strong-form market efficiency<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/market-efficiency-fundamental-analysis\/\" target=\"_blank\" rel=\"noopener\">LOS e: explain the implications of each form of market efficiency for fundamental analysis, technical analysis, and the choice between active and passive portfolio management<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/market-anomalies\/\" target=\"_blank\" rel=\"noopener\">LOS f: describe market anomalies<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/behavioral-finance\/\" target=\"_blank\" rel=\"noopener\">LOS g: describe behavioral finance and its potential relevance to understanding market anomalies<\/a><\/p>\n<h3><strong>Learning Module 4<\/strong><strong>\u00a0&#8211; Overview of Equity Securities<\/strong><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/types-equity-securities\/\" target=\"_blank\" rel=\"noopener\">LOS a: describe characteristics of types of equity securities<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/voting-rights-ownership-characteristics\/\" target=\"_blank\" rel=\"noopener\">LOS b: describe differences in voting rights and other ownership characteristics among different equity classes<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/public-vs-private-equity-securities\/\" target=\"_blank\" rel=\"noopener\">LOS c: distinguish between public and private equity securities<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/methods-investing-non-domestic-equity-securities\/\" target=\"_blank\" rel=\"noopener\">LOS d: describe methods for investing in non-domestic equity securities<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/risk-return-equity-securities\/\" target=\"_blank\" rel=\"noopener\">LOS e: compare the risk and return characteristics of different types of equity securities<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/role-equity-securities\/\" target=\"_blank\" rel=\"noopener\">LOS f: explain the role of equity securities in the financing of a company\u2019s assets<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/market-value-vs-book-value-equity-securities\/\" target=\"_blank\" rel=\"noopener\">LOS g: distinguish between the market value and book value of equity securities<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/companys-cost-equity\/\" target=\"_blank\" rel=\"noopener\">LOS h: compare a company\u2019s cost of equity, its (accounting) return on equity, and investors\u2019 required rates of return<\/a><\/p>\n<h3><strong>Learning Module 5 &#8211; Company Analysis: Past and Present<\/strong><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46269\" target=\"_blank\" rel=\"noopener\">LOS a: describe the elements that should be covered in a thorough company research report<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46333\" target=\"_blank\" rel=\"noopener\">LOS b: determine a company&#8217;s business model<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46325\" target=\"_blank\" rel=\"noopener\">LOS c: evaluate a company\u2019s revenue and revenue drivers, including pricing power<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46378\" target=\"_blank\" rel=\"noopener\">LOS d: evaluate a company\u2019s operating profitability and working capital using key measures<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46329\" target=\"_blank\" rel=\"noopener\">LOS e: evaluate a company\u2019s capital investments and capital structure<\/a><\/p>\n<h3><strong>Learning Module 6 &#8211; <span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Industry and Competitive Analysis&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:31699,&quot;3&quot;:{&quot;1&quot;:0},&quot;4&quot;:{&quot;1&quot;:3,&quot;3&quot;:2},&quot;7&quot;:{&quot;1&quot;:[{&quot;1&quot;:2,&quot;2&quot;:0,&quot;5&quot;:{&quot;1&quot;:2,&quot;2&quot;:0}},{&quot;1&quot;:0,&quot;2&quot;:0,&quot;3&quot;:3},{&quot;1&quot;:1,&quot;2&quot;:0,&quot;4&quot;:1}]},&quot;9&quot;:0,&quot;10&quot;:2,&quot;11&quot;:0,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:16711680},&quot;15&quot;:&quot;Calibri, sans-serif&quot;,&quot;16&quot;:8,&quot;17&quot;:1}\">Industry and Competitive Analysis<\/span><\/strong><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46708\" target=\"_blank\" rel=\"noopener\">LOS a: describe the purposes of, and steps involved in, industry and competitive analysis<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46714\" target=\"_blank\" rel=\"noopener\">LOS b: describe industry classification methods and compare methods by which companies can be grouped<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46717\" target=\"_blank\" rel=\"noopener\">LOS c: determine an industry\u2019s size, growth characteristics, profitability, and market share trends<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46720\" target=\"_blank\" rel=\"noopener\">LOS d: analyze an industry\u2019s structure and external influences using Porter\u2019s Five Forces and PESTLE frameworks<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46722\" target=\"_blank\" rel=\"noopener\">LOS e: evaluate the competitive strategy and position of a company<\/a><\/p>\n<h3><strong>Learning Module 7 &#8211; Company Analysis: Forecasting<\/strong><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46725\" target=\"_blank\" rel=\"noopener\">LOS a: explain principles and approaches to forecasting a company\u2019s financial results and position<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46728\" target=\"_blank\" rel=\"noopener\">LOS b: explain approaches to forecasting a company\u2019s revenues<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46730\" target=\"_blank\" rel=\"noopener\">LOS c: explain approaches to forecasting a company\u2019s operating expenses and working capital<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46732\" target=\"_blank\" rel=\"noopener\">LOS d: explain approaches to forecasting a company\u2019s capital investments and capital structure<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=46734\" target=\"_blank\" rel=\"noopener\">LOS e: describe the use of scenario analysis in forecasting<\/a><\/p>\n<h3><strong>Learning Module 8 &#8211; Equity Valuation: Concepts and Basic Tools<\/strong><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/overvalued-fairly-valued-undervalued-securities\/\" target=\"_blank\" rel=\"noopener\">LOS a: evaluate whether security, given its current market price and a value estimate, is overvalued, fairly valued, or undervalued by the market<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/major-categories-equity-valuation-models\/\" target=\"_blank\" rel=\"noopener\">LOS b: describe major categories of equity valuation models<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/portfolio-management\/describe-regular-cash-dividends-extra-dividends-stock-dividends-stock-splits-reverse-stock-splits-and-share-repurchases\/\" target=\"_blank\" rel=\"noopener\">LOS c: describe regular cash dividends, extra dividends, stock dividends, stock splits, reverse stock splits, and share repurchases<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/describe-dividend-payment-chronology\/\" target=\"_blank\" rel=\"noopener\">LOS d: describe dividend payment chronology<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/present-value-models-value-equity\/\" target=\"_blank\" rel=\"noopener\">LOS e: explain the rationale for using present value models to value equity and describe the dividend discount and free-cash-flow-to-equity models<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/intrinsic-value-preferred-stock\/\" target=\"_blank\" rel=\"noopener\">LOS f: calculate the intrinsic value of a non-callable, non-convertible preferred stock<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/gordon-constant-growth-dividend-discount-model\/\" target=\"_blank\" rel=\"noopener\">LOS g: calculate and interpret the intrinsic value of an equity security based on the Gordon (constant) growth dividend discount model or a two-stage dividend discount model, as appropriate<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/multistage-dividend-discount-model\/\" target=\"_blank\" rel=\"noopener\">LOS h: identify characteristics of companies for which the constant growth or a multistage dividend discount model is appropriate<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/using-price-multiples-value-equity\/\" target=\"_blank\" rel=\"noopener\">LOS i: explain the rationale for using price multiples to value equity, how the price-to-earnings multiple relates to fundamentals, and the use of multiples based on comparables<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/price-multiples\/\" target=\"_blank\" rel=\"noopener\">LOS j: calculate and interpret the following multiples: price to earnings, price to an estimate of operating cash flow, price to sales, and price to book value<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/enterprise-value-multiples\/\" target=\"_blank\" rel=\"noopener\">LOS k: describe enterprise value multiples and their use in estimating equity value<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/asset-based-valuation-models\/\" target=\"_blank\" rel=\"noopener\">LOS l: describe asset-based valuation models and their use in estimating equity value<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/advantages-disadvantages-category-valuation-model\/\" target=\"_blank\" rel=\"noopener\">LOS m: explain the advantages and disadvantages of each category of the valuation model<\/a><\/p>\n<p>&nbsp;<\/p>\n<h2>2026\/2027 Curriculum<\/h2>\n<h3><b>Learning Module 1: Equity Instrument Features<\/b><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/equity-instrument-features-learning-outcomes\/\" target=\"_blank\" rel=\"noopener\">LOS a: Describe basic features and types of equity instruments<\/a><br \/><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/equity-instrument-features\/\" target=\"_blank\" rel=\"noopener\">LOS b: Contrast features of publicly listed versus private equity securities<\/a><\/p>\n<h3><b>Learning Module 2: Equity Jurisdictions, Classes, and the Voting Process<\/b><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/economic-vs-voting-rights\/\" target=\"_blank\" rel=\"noopener\">LOS a: Describe differences in economic and voting rights and other characteristics among different jurisdictions and equity classes<\/a><br \/><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/equity-voting-process\/\" target=\"_blank\" rel=\"noopener\">LOS b: Describe the voting process and roles of the issuer&#8217;s management, board, proxy advisors, asset managers, and asset owners in the process<\/a><\/p>\n<h3><b>Learning Module 3: Equity Issuance and Trading<\/b><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/primary-and-secondary-public-equity-markets-and-their-functions\/\" target=\"_blank\" rel=\"noopener\">LOS a: Describe primary and secondary public equity markets and their functions<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/exchange-off-exchange-and-over-the-counter-equities-trading\/\" target=\"_blank\" rel=\"noopener\">LOS b: Compare exchange, off-exchange, and over-the-counter equities trading<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/liquidity-measures-for-publicly-listed-securities\/\" target=\"_blank\" rel=\"noopener\">LOS c: Describe liquidity measures for a publicly listed security and calculate float and average daily volume <\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/types-of-equity-indexes\/\" target=\"_blank\" rel=\"noopener\">LOS d: Describe types of equity indexes<\/a><\/p>\n<h3><b>Learning Module 4: Sources of Equity Returns<\/b><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/features-and-uses-of-dividends-share-repurchases-stock-splits-and-reverse-stock-splits\/\" target=\"_blank\" rel=\"noopener\">LOS a: Describe Features and Uses of Dividends, Share Repurchases, Stock Splits, and Reverse Stock Splits<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/the-dividend-payment-process\/\" target=\"_blank\" rel=\"noopener\">LOS b: Describe Dividend Payment Chronology<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/price-and-total-return\/\" target=\"_blank\" rel=\"noopener\">LOS c: Calculate Price and Total Return for Equity Securities<\/a><\/p>\n<h3><b>Learning Module 5: Introduction to Equity Valuation<\/b><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/price-vs-value-for-an-equity-security\/\" target=\"_blank\" rel=\"noopener\">LOS a: Contrast price and value for an equity security.<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/book-value-market-capitalization-and-enterprise-value-as-indicators-of-intrinsic-value\/\" target=\"_blank\" rel=\"noopener\">LOS b: contrast the use of book value of equity, market capitalization, and enterprise value as indicators of intrinsic value.<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/equity-valuation-models-categories-advantages-and-disadvantages\/\" target=\"_blank\" rel=\"noopener\">LOS c: Describe major categories of equity valuation models and explain their advantages and disadvantages.<\/a><\/p>\n<h3><b>Learning Module 6: Discounted Cash Flow (DCF) and Growth Models<\/b><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/contrast-the-inputs-used-in-dividend-discount\/\" target=\"_blank\" rel=\"noopener\">LOS a: Contrast the inputs used in dividend discount, free cash flow to equity (FCFE), free cash flow to the firm (FCFF), and residual income models, and explain the process for using present value models to value equity.<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/calculate-and-interpret-the-intrinsic-value-of-an-equity-security\/\" target=\"_blank\" rel=\"noopener\">LOS b: Calculate and interpret the intrinsic value of an equity security based on present value models that assume constant cash flow growth or multistage cash flow growth.<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/limitations-of-constant-growth-and-multistage-present-value-models\/\" target=\"_blank\" rel=\"noopener\">LOS c: Explain the shortcomings of constant and multistage cash flow growth assumptions in present value models.<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/valuation-of-non-callable-non-convertible-preferred-stock\/\" target=\"_blank\" rel=\"noopener\">LOS d: Calculate the intrinsic value of a non-callable, non-convertible preferred stock and describe how contingency features affect intrinsic value.<\/a><\/p>\n<h3><b>Learning Module 7<\/b><b>: Relative Value Equity Valuation Approaches<\/b><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/equity-valuation-using-multiples-comparables-and-forecasted-fundamentals\/\" target=\"_blank\" rel=\"noopener\">LOS a: Explain the process for using multiples to value equity based on the method of comparables and the method of forecasted fundamentals.<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/price-and-enterprise-value-multiples-and-their-uses\/\" target=\"_blank\" rel=\"noopener\">LOS b: Calculate and interpret price and enterprise value multiples, and describe their appropriate uses.<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/selecting-peer-groups-for-multiples-based-equity-valuation\/\" target=\"_blank\" rel=\"noopener\">LOS c: Determine a potential peer group for multiples-based equity valuation based on a company\u2019s industry classification or specific drivers of expected return.<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/past-current-and-forward-multiples-in-equity-valuation\/\" target=\"_blank\" rel=\"noopener\">LOS d: Describe the use of multiples based on past, current, and projected future values in estimating equity value.<\/a><\/p>\n<h3><b>Learning Module 8: Financial Statement Forecasting in Equity Valuation<\/b><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/financial-statement-forecast-models-in-equity-valuation\/\" target=\"_blank\" rel=\"noopener\">LOS a: Explain the rationale, construction, and uses of financial statement forecast models in equity valuation<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/constructing-equity-valuation-models-based-on-company-characteristics\/\" target=\"_blank\" rel=\"noopener\">LOS b: Evaluate the construction of an equity valuation model based on characteristics of the subject company<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/estimating-equity-value-from-financial-statement-forecast-models\/\" target=\"_blank\" rel=\"noopener\">LOS c: Estimate and interpret the value of an equity security based on the outputs of a financial statement forecast model<\/a><\/p>\n<h3><b>Learning Module 9: Industry and Competitive Analysis<\/b><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/industry-and-competitive-analysis-process\/\" target=\"_blank\" rel=\"noopener\">LOS a: Describe the process of industry and competitive analysis<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/industry-classification-methods-and-company-grouping\/\" target=\"_blank\" rel=\"noopener\">LOS b: Describe industry classification methods and compare methods by which companies can be grouped<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/industry-size-growth-profitability-and-market-share-trends\/\" target=\"_blank\" rel=\"noopener\">LOS c: Determine an industry\u2019s size, growth characteristics, profitability, and market share trends<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/industry-analysis-using-porters-five-forces-and-pestle\/\" target=\"_blank\" rel=\"noopener\">LOS d: Analyze an industry\u2019s structure and external influences using Porter\u2019s Five Forces and the PESTLE framework<\/a><\/p>\n<h3><b>Learning Module 10: Company Analysis Past, Present, and Future<\/b><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/company-competitive-strategy-and-industry-position\/\" target=\"_blank\" rel=\"noopener\">LOS a: Explain a company\u2019s competitive strategy and position within an industry.<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/revenue-drivers-operating-profitability-and-pricing-power\/\" target=\"_blank\" rel=\"noopener\">LOS b: Evaluate a company\u2019s revenue drivers, operating profitability, and pricing power.<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/working-capital-capital-investments-and-capital-structure\/\" target=\"_blank\" rel=\"noopener\">LOS c: Evaluate a company\u2019s working capital, capital investments, and capital structure<\/a><\/p>\n<h3><b>Learning Module 11: Equity Analyst Research Reports<\/b><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/uncategorized\/elements-of-an-equity-research-report\/\" target=\"_blank\" rel=\"noopener\">LOS a: Describe the elements that should be covered in a detailed company research report<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/sell-side-vs-buy-side-equity-analyst-reports\/\" target=\"_blank\" rel=\"noopener\">LOS b: Compare sell-side and buy-side equity analyst reports and their conclusions<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/how-analyst-assumptions-affect-equity-valuation-estimates\/\" target=\"_blank\" rel=\"noopener\">LOS c: Explain why value estimates from the same modeling approach may differ based on analyst assumptions regarding revenue, profitability, investment, and financing<\/a><\/p>\n<h3><b>Learning Module <\/b><b>12: The Capital Asset Pricing Model, Market Model, and Other Factor-Based Equity Models<\/b><\/h3>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/using-capm-and-the-market-model-to-estimate-required-return-on-equity\/\" target=\"_blank\" rel=\"noopener\">LOS a: Explain the application of the CAPM and the market model in estimating a company&#8217;s required return on equity<\/a><\/p>\n<p><a href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/arbitrage-pricing-theory-and-multi-factor-equity-models\/\" target=\"_blank\" rel=\"noopener\">LOS b: Describe the arbitrage pricing theory framework and the practical significance of multi-factor models in equity investing.<\/a><\/p>\n<p>&#8230;<\/p>\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Study Session 12 Older Curriculum\u00a0 2024 Curriculum Learning Module 1 &#8211; Market Organization and Structure LOS a: explain the main functions of the financial system LOS b: describe classifications of assets and markets LOS c: describe the major types of&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8],"tags":[],"class_list":["post-253","post","type-post","status-publish","format-standard","hentry","category-equity","blog-post","no-post-thumbnail","animate"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Equity Investments Study Notes | CFA Level 1<\/title>\n<meta name=\"description\" content=\"CFA Level 1 Equity Investments notes cover valuation techniques, market analysis, and key concepts to excel in equity analysis and investment strategies.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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