abaquant.financial_math.equity

Import path: abaquant.financial_math.equity

Domain: Time-value, actuarial, fixed-income, corporate-finance, and portfolio mathematics.

Purpose

Equity valuation primitives.

When to use it

Use these functions for deterministic calculations where explicit cash-flow, rate, compounding, sign, and annualization conventions matter.

Public objects

  • function: gordon_shapiro_valuation — Value equity under the constant-growth Gordon–Shapiro dividend model.

  • function: required_equity_return — Infer the constant-growth required equity return from dividend and price inputs.

  • function: multiples_valuation — Estimate value by applying a selected valuation multiple.

Detailed reference

Equity valuation primitives.

Purpose

The module implements Gordon–Shapiro dividend-growth valuation, implied required return, and multiple-based valuation helpers.

Conventions

Dividends and prices use common currency units; growth and required returns are decimal annual rates.

Scope and limitations

The Gordon–Shapiro model requires a required return greater than the perpetual growth rate.

References

[ 1 ] Kellison, S. G. (2009), The Theory of Interest.

abaquant.financial_math.equity.gordon_shapiro_valuation(next_dividend, required_return, growth_rate)

Value equity under the constant-growth Gordon–Shapiro dividend model.

Parameters:

  • next_dividend (float) – Dividend expected in the next period, in currency units.

  • required_return (float) – Required equity return in decimal annual units.

  • growth_rate (float) – Constant growth rate in decimal annual units.

Returns:

Computed gordon shapiro valuation as a scalar in the units implied by the input values.

Return type:

float

abaquant.financial_math.equity.multiples_valuation(value_metric, target_multiple)

Estimate value by applying a selected valuation multiple.

Parameters:

  • value_metric (float) – Fundamental metric to which a valuation multiple is applied.

  • target_multiple (float) – Comparable-company valuation multiple applied to the selected metric.

Returns:

Computed multiples valuation as a scalar in the units implied by the input values.

Return type:

float

abaquant.financial_math.equity.required_equity_return(next_dividend, current_price, growth_rate)

Infer the constant-growth required equity return from dividend and price inputs.

Parameters:

  • next_dividend (float) – Dividend expected in the next period, in currency units.

  • current_price (float) – Current equity price in currency units.

  • growth_rate (float) – Constant growth rate in decimal annual units.

Returns:

Computed required equity return as a dimensionless decimal quantity.

Return type:

float