Investment Valuation, 3rd Edition

03/12/2013 · No Responses

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
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
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