Damodaran on Valuation: Security Analysis for Investment and Corporate Finance / Edition 1

Damodaran on Valuation: Security Analysis for Investment and Corporate Finance / Edition 1

by Aswath Damodaran, Damodaran
     
 

ISBN-10: 0471108979

ISBN-13: 9780471108979

Pub. Date: 10/21/1994

Publisher: Wiley

Ideally, the price paid for any asset should reflect the expected cash flow on that asset - but there are two problems that arise in every valuation. The first is that estimating cash flows is an exercise fraught with uncertainty, and the second is that picking the right model to use in valuing an asset is seldom easy. This can lead to significant errors in valuation.…  See more details below

Overview

Ideally, the price paid for any asset should reflect the expected cash flow on that asset - but there are two problems that arise in every valuation. The first is that estimating cash flows is an exercise fraught with uncertainty, and the second is that picking the right model to use in valuing an asset is seldom easy. This can lead to significant errors in valuation. Sophisticated practitioners can accurately and consistently determine the value of all types of assets, when they rely on the seasoned advice found in Damodaran on Valuation. This applications-oriented tool covers the full range of available valuation models. It also presents the common elements within these models as well as the subtle variations, debunks the myth concerning their utility, and provides a framework for selecting the right model for any valuation scenario. Damodaran on Valuation systematically examines the three basic approaches to valuation - discounted cash-flow valuation, relative valuation, and contingent claim valuation - and the various models within these broad categories. With the help of numerous real-world examples involving both U.S. and international firms, the book illuminates the purpose of each particular model, its advantages and limitations, the step-by-step process involved in putting the model to work, and the kinds of firms to which it is best applied. Among the tools presented are those designed to estimate the cost of equityincluding the capital cost pricing model and arbitrage pricing model; estimate growth rates - with coverage of how to arrive at a weighted average of growth rates by blending three separate approaches; value equity - focusing on the Gordon Growth Model and the two- and three-stage dividend discount model; measure free cash flows to equity - assets that are carefully delineated from the dividends of most firms; value firms - including free cash flow to firm models, which are especially suited to highly leveraged firms; estimate the value of

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Product Details

ISBN-13:
9780471108979
Publisher:
Wiley
Publication date:
10/21/1994
Pages:
232
Product dimensions:
6.00(w) x 9.00(h) x 0.53(d)

Table of Contents

Ch. 1Introduction to valuation1
Pt. 1Discounted cash flow valuation25
Ch. 2Estimating discount rates27
Ch. 3Measuring cash flows79
Ch. 4Forecasting cash flows117
Ch. 5Equity discounted cash flow models157
Ch. 6Firm valuation models193
Pt. 2Relative valuation231
Ch. 7Relative valuation : first principles233
Ch. 8Equity multiples255
Ch. 9Value multiples295
Ch. 10Cash, cross holdings, and other assets327
Ch. 11Employee equity options and compensation369
Ch. 12The value of intangibles407
Ch. 13The value of control457
Ch. 14The value of liquidity497
Ch. 15The value of synergy541
Ch. 16The value of transparency575
Ch. 17The cost of distress611
Ch. 18Closing thoughts648

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