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T7.2 Common Stock Cash Flows and the Fundamental Theory of Valuation. In 1938, John Burr Williams postulated what has become the fundamental theory of valuation:The value today of any financial asset equals the present value of all of its future cash flows.For common stocks, this implies the fo
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1. T7.1 Chapter Outline Chapter 7Equity Valuation Chapter Organization 7.1 Common Stock Valuation 7.2 Common Stock Features 7.3 Preferred Stock Features 7.4 Stock Market Reporting 7.5 Summary and Conclusions