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Equity Asset Valuation, Second Edition

Book Description

A comprehensive look at the equity valuation process

With the Second Edition of Equity Asset Valuation, the distinguished team of Jerald Pinto, Elaine Henry, Thomas Robinson, and John Stowe, fully update information associated with this important discipline. Blending theory with practice, they detail the contemporary techniques used to determine the intrinsic value of an equity security, and show you how to successfully apply these techniques in both foreign and domestic markets.

Unlike alternative works in this field, the Second Edition of Equity Asset Valuation clearly integrates finance and accounting concepts into the discussion-providing the evenness of subject matter treatment, consistency of notation, and continuity of topic coverage that is so critical to the learning process.

  • Addresses essential issues in this arena, including the equity valuation process, discounted dividend valuation, free cash flow valuation, and residual income valuation

  • Each author brings his own unique experiences and perspectives to the equity analysis process

  • Distills the knowledge, skills, and abilities you need to succeed in today's fast-paced financial environment

  • Companion Workbook also available

Valuable for classroom study, self-study, and general reference, this book contains clear, example-driven coverage of many of today's most

Table of Contents

  1. Title Page
  2. Copyright Page
  3. Foreword
    1. WHY READ THIS BOOK?
    2. WHAT YOU’LL FIND IN THIS TEXT
  4. Acknowledgments
  5. Introduction
    1. HISTORY
    2. BENEFITS
    3. THE TEXTS
  6. CHAPTER 1 - EQUITY VALUATION: APPLICATIONS AND PROCESSES
    1. LEARNING OUTCOMES
    2. 1. INTRODUCTION
    3. 2. VALUE DEFINITIONS AND VALUATION APPLICATIONS
    4. 3. THE VALUATION PROCESS
    5. 4. COMMUNICATING VALUATION RESULTS
    6. 5. SUMMARY
    7. PROBLEMS
  7. CHAPTER 2 - RETURN CONCEPTS
    1. LEARNING OUTCOMES
    2. 1. INTRODUCTION
    3. 2. RETURN CONCEPTS
    4. 3. THE EQUITY RISK PREMIUM
    5. 4. THE REQUIRED RETURN ON EQUITY
    6. 5. THE WEIGHTED AVERAGE COST OF CAPITAL
    7. 6. DISCOUNT RATE SELECTION IN RELATION TO CASH FLOWS
    8. 7. SUMMARY
    9. PROBLEMS
  8. CHAPTER 3 - DISCOUNTED DIVIDEND VALUATION
    1. LEARNING OUTCOMES
    2. 1. INTRODUCTION
    3. 2. PRESENT VALUE MODELS
    4. 3. THE DIVIDEND DISCOUNT MODEL
    5. 4. THE GORDON GROWTH MODEL
    6. 5. MULTISTAGE DIVIDEND DISCOUNT MODELS
    7. 6. THE FINANCIAL DETERMINANTS OF GROWTH RATES
    8. 7. SUMMARY
    9. PROBLEMS
  9. CHAPTER 4 - FREE CASH FLOW VALUATION
    1. LEARNING OUTCOMES
    2. 1. INTRODUCTION TO FREE CASH FLOWS
    3. 2. FCFF AND FCFE VALUATION APPROACHES
    4. 3. FORECASTING FREE CASH FLOW
    5. 4. FREE CASH FLOW MODEL VARIATIONS
    6. 5. NONOPERATING ASSETS AND FIRM VALUE
    7. 6. SUMMARY
    8. PROBLEMS
  10. CHAPTER 5 - RESIDUAL INCOME VALUATION
    1. LEARNING OUTCOMES
    2. 1. INTRODUCTION
    3. 2. RESIDUAL INCOME
    4. 3. THE RESIDUAL INCOME MODEL
    5. 4. RESIDUAL INCOME VALUATION IN RELATION TO OTHER APPROACHES
    6. 5. ACCOUNTING AND INTERNATIONAL CONSIDERATIONS
    7. 6. SUMMARY
    8. PROBLEMS
  11. CHAPTER 6 - MARKET-BASED VALUATION: PRICE AND ENTERPRISE VALUE MULTIPLES
    1. LEARNING OUTCOMES
    2. 1. INTRODUCTION
    3. 2. PRICE AND ENTERPRISE VALUE MULTIPLES IN VALUATION
    4. 3. PRICE MULTIPLES
    5. 4. ENTERPRISE VALUE MULTIPLES
    6. 5. INTERNATIONAL CONSIDERATIONS WHEN USING MULTIPLES
    7. 6. MOMENTUM VALUATION INDICATORS
    8. 7. VALUATION INDICATORS: ISSUES IN PRACTICE
    9. 8. SUMMARY
    10. PROBLEMS
  12. CHAPTER 7 - PRIVATE COMPANY VALUATION
    1. LEARNING OUTCOMES
    2. 1. INTRODUCTION
    3. 2. THE SCOPE OF PRIVATE COMPANY VALUATION
    4. 3. DEFINITIONS (STANDARDS) OF VALUE
    5. 4. PRIVATE COMPANY VALUATION APPROACHES
    6. 5. SUMMARY
    7. PROBLEMS
  13. GLOSSARY
  14. REFERENCES
  15. ABOUT THE AUTHORS
  16. ABOUT THE CFA PROGRAM
  17. INDEX