One of the most important steps in valuating a company is selecting the appropriate valuation model. There are two broad types of valuation models, a) Absolute Valuation models (Free cash flow Valuation, Dividend Discount Model), and b) Relative valuation models (e.g. market multiples or price-earnings ratios). Describe the differences between the two methods and list a few of the advantages and disadvantages of using each when valuing common stocks.