WACC and Divident Discount Model and CFA exam (dividend, income, interest)

[nlst]

I am a financial analyst in training and I am trying to learn how to use intrinsic value estimators. According to investopedia, the equation to do that is (dividend per share)/(discount rate-dividend growth rate). My question is, how is the dividend growth rate calculated and what do we use as the discount rate? Required rate of return? If so, how do we use the income statement and the balance sheet to find this, or is there another way? And is this required rate of return the WACC? If so, I'm having trouble figuring out how to calculate the cost of debt: does debt represent total liabilities, or something else?

My final question would be that because I am a new financial analyst and was an accounting major, do I need to go back to school to be able to pass the CFA, or is sufficient material provided for me to go ahead and begin studying for it? Thanks.

[skinnayyy]

You don't need to go to school to pass the CFA. You can just read the material provided or get the Schweiser(SP?) which is supposed to be better.

[Big G]

You don't need to go back to school for the CFA, although it wouldn't hurt. You DO need the CFA curriculum (supplied with exam registration) or the Schweser notes.

FWIW, the answers to all your questions are in the Level I CFA materials. Otherwise, a valuation textbook, such as Titman and Martin, would be the best way to get detailed explanations of the answers to your questions.

There are CFA-specific forums, where your posting would attract a lot more responses than what you'll get on C-D. Seek those out and repost your question there.

[JayGatsby]

Thanks for reminding me why I'm not interested in taking the CFA. I studied all that stuff in school but never once used it after... Despite that, I would encourage you to learn this material. This gives you a new way of thinking about finance that could be very helpful.

[Matilda Adams]

I don't think you don't need to go back to school for the CFA.