Book description
The definitive source of information on all topics related to investment valuation tools and techniques
Valuation is at the heart of any investment decision, whether that decision is buy, sell or hold. But the pricing of many assets has become a more complex task in modern markets, especially after the recent financial crisis. In order to be successful at this endeavor, you must have a firm understanding of the proper valuation techniques. One valuation book stands out as withstanding the test of time among investors and students of financial markets, Aswath Damodaran'sInvestment Valuation.
Now completely revised and updated to reflect changing market conditions, this third edition comprehensively introduces investment professionals and students to the range of valuation models available and how to chose the right model for any given asset valuation scenario. This edition includes valuation techniques for a whole host of real options, start-up firms, unconventional assets, distressed companies and private equity, and real estate. All examples have been updated and new material has been added.
Fully revised to incorporate valuation lessons learned from the last five years, from the market crisis and emerging markets to new types of equity investments
Includes valuation practices across the life cycle of companies and emphasizes value enhancement measures, such as EVA and CFROI
Contains a new chapter on probabilistic valuation techniques such as decision trees and Monte Carlo Simulation
Author Aswath Damodaran is regarded as one of the best educators and thinkers on the topic of investment valuation
This indispensable guide is a must read for anyone wishing to gain a better understanding of investment valuation and its methods. With it, you can take the insights and advice of a recognized authority on the valuation process and immediately put them to work for you.
Table of contents
- Cover Page
- Website
- Title Page
- Copyright
- Dedication
- Preface to the Third Edition
- Contents
- CHAPTER 1: Introduction to Valuation
- CHAPTER 2: Approaches to Valuation
- CHAPTER 3: Understanding Financial Statements
- CHAPTER 4: The Basics of Risk
- CHAPTER 5: Option Pricing Theory and Models
-
CHAPTER 6: Market Efficiency—Definition, Tests, and Evidence
- MARKET EFFICIENCY AND INVESTMENT VALUATION
- WHAT IS AN EFFICIENT MARKET?
- IMPLICATIONS OF MARKET EFFICIENCY
- NECESSARY CONDITIONS FOR MARKET EFFICIENCY
- PROPOSITIONS ABOUT MARKET EFFICIENCY
- TESTING MARKET EFFICIENCY
- CARDINAL SINS IN TESTING MARKET EFFICIENCY
- SOME LESSER SINS THAT CAN BE A PROBLEM
- EVIDENCE ON MARKET EFFICIENCY
- TIME SERIES PROPERTIES OF PRICE CHANGES
- MARKET REACTION TO INFORMATION EVENTS
- MARKET ANOMALIES
- EVIDENCE ON INSIDERS AND INVESTMENT PROFESSIONALS
- CONCLUSION
- QUESTIONS AND SHORT PROBLEMS
- CHAPTER 7: Riskless Rates and Risk Premiums
- CHAPTER 8: Estimating Risk Parameters and Costs of Financing
- CHAPTER 9: Measuring Earnings
- CHAPTER 10: From Earnings to Cash Flows
- CHAPTER 11: Estimating Growth
- CHAPTER 12: Closure in Valuation: Estimating Terminal Value
- CHAPTER 13: Dividend Discount Models
- CHAPTER 14: Free Cash Flow to Equity Discount Models
- CHAPTER 15: Firm Valuation: Cost of Capital and Adjusted Present Value Approaches
- CHAPTER 16: Estimating Equity Value per Share
- CHAPTER 17: Fundamental Principles of Relative Valuation
- CHAPTER 18: Earnings Multiples
- CHAPTER 19: Book Value Multiples
- CHAPTER 20: Revenue Multiples and Sector-Specific Multiples
- CHAPTER 21: Valuing Financial Service Firms
- CHAPTER 22: Valuing Firms with Negative or Abnormal Earnings
- CHAPTER 23: Valuing Young or Start-Up Firms
- CHAPTER 24: Valuing Private Firms
- CHAPTER 25: Aquisitions and Takeovers
- CHAPTER 26: Valuing Real Estate
- CHAPTER 27: Valuing Other Assets
- CHAPTER 28: The Option to Delay and Valuation Implications
- CHAPTER 29: The Options to Expand and to Abandon: Valuation Implications
- CHAPTER 30: Valuing Equity in Distressed Firms
- CHAPTER 31: Value Enhancement: A Discounted Cash Flow Valuation Framework
- CHAPTER 32: Value Enhancement: Economic Value Added, Cash Flow Return on Investment, and Other Tools
- CHAPTER 33: Probabilistic Approaches in Valuation: Scenario Analysis, Decision Trees, and Simulations
- CHAPTER 34: Overview and Conclusion
-
References
- Chapter 1 Introduction to Valuation
- Chapter 2 Approaches to Valuation
- Chapter 3 Understanding Financial Statements
- Chapter 4 The Basics of Risk
- Chapter 5 Option Pricing Theory and Models
- Chapter 6 Market Efficiency—Definitions, Tests, and Evidence
- Chapter 7 Riskless Rates and Risk Premiums
- Chapter 8 Estimating Risk Parameters and Costs of Financing
- Chapter 9 Measuring Earnings
- Chapter 10 From Earnings to Cash Flows
- Chapter 11 Estimating Growth
- Chapter 12 Closure in Valuation: Estimating Terminal Value
- Chapter 13 Dividend Discount Models
- Chapter 14 Free Cash Flow to Equity Discount Models
- Chapter 15 Firm Valuation: Cost of Capital and Adjusted Present Value Approaches
- Chapter 16 Estimating Equity Value per Share
- Chapter 17 Fundamental Principles of Relative Valuation
- Chapter 18 Earnings Multiples
- Chapter 19 Book Value Multiples
- Chapter 20 Revenue Multiples and Sector-Specific Multiples
- Chapter 21 Valuing Financial Service Firms
- Chapter 22 Valuing Firms with Negative Earnings
- Chapter 23 Valuing Young or Start-Up Firms
- Chapter 24 Valuing Private Firms
- Chapter 25 Acquisitions and Takeovers
- Chapter 26 Valuing Real Estate
- Chapter 27 Valuing Other Assets
- Chapter 28 The Option to Delay and Valuation Implications
- Chapter 29 The Options to Expand and to Abandon: Valuation Implications
- Chapter 30 Valuing Equity in Distressed Firms
- Chapter 31 Value Enhancement: A Discounted Cash Flow Valuation Framework
- Chapter 32 Value Enhancement: Economic Value Added, Cash Flow Return on Investment, and Other Tools
- Chapter 33 Probabilistic Approaches in Valuation
- Chapter 34 Overview and Conclusion
- Index
Product information
- Title: Investment Valuation: Tools and Techniques for Determining the Value of Any Asset, Third Edition
- Author(s):
- Release date: April 2012
- Publisher(s): Wiley
- ISBN: 9781118011522
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