FE-1 Equity study plan

Build a one-page formula sheet covering FCFF, FCFE, Gordon growth, two-stage DDM, and sustainable growth, writing each formula from memory before checking notes

Compute enterprise value from EBITDA, net debt, and minority interest for two hypothetical companies and state which cash flow claim each multiple matches

Derive the relationship between ROE, retention ratio, and sustainable growth, then calculate how growth changes when payout rises from 30% to 50%

Solve three single-stage DDM problems by hand, including one where required return falls below growth and explain why the model breaks down

Construct a two-stage FCFE model for a fictional company with explicit five-year forecasts, a transition period, and a terminal value

Reconcile FCFF and FCFE valuations of the same company and explain the difference in the implied equity value

Adjust beta for leverage using the Hamada relationship and show the effect of a target debt-to-equity shift on cost of equity

List five common DCF errors and match each to a specific input in your model that you will stress-test

Reformat a fictional three-statement set into a common-size income statement and balance sheet and identify the two largest structural shifts year over year

Compute ROE and decompose it into DuPont components, then attribute the change in ROE to margin, turnover, or leverage

Calculate accruals and cash conversion metrics and flag earnings quality concerns in a written note

Reconcile net income to operating cash flow and classify each adjustment as non-cash, working capital, or non-operating

Compute P/E, forward P/E, P/B, EV/EBITDA, and EV/Sales for four fictional peers and rank them on each multiple

Explain for each multiple which business characteristics make it appropriate or misleading, with one example per multiple

Build a peer set selection rationale covering size, growth, margin, and capital intensity criteria

Identify three situations where a low P/E signals value and three where it signals a value trap

Describe the mechanics of a secondary equity offering, a rights issue, and a share buyback and state the dilution effect of each on EPS

Distinguish voting structures, depositary receipts, and preferred share features in a comparison table

Bridge an EV/EBITDA multiple to an implied share price starting from enterprise value, net debt, and diluted share count

Recalculate a peer median multiple after removing one outlier and explain the effect on the implied value

Draft a research report skeleton with thesis, catalysts, valuation, risks, and a clear buy, hold, or sell stance

Write a two-sentence investment thesis that names the mispricing, the reason it exists, and the catalyst that closes it

Convert a valuation range into a target price and state the implied return and the rating threshold used

Write three falsifiable risk statements that would invalidate the thesis and specify the data that would trigger a review

Compute portfolio expected return, variance, and standard deviation for a three-asset portfolio using given weights and a covariance matrix

Explain how adding a low-correlation asset changes portfolio risk and quantify the effect with a two-asset example

Distinguish systematic from idiosyncratic risk and state which is priced and why

Calculate Sharpe ratio and tracking error for a portfolio against a benchmark and interpret each

Complete a timed 60-question mixed mock covering all seven domains and record accuracy by domain

Re-derive every formula on the week 1 sheet from memory and correct any that drifted

Revisit the three weakest domains and write a short correction note for each missed concept

Deliver a final one-page summary linking valuation method choice to business characteristics and data quality