Valuation is at the heart of every investment decision, whether that decision is to buy, sell, or hold. But the pricing of any financial asset has become a more complex task in modern financial markets. Now completely revised and fully updated to reflect changing market conditions, "Investment Valuation", Second Edition, provides expert instruction on how to value virtually any type of asset-stocks, bonds, options, futures, real assets, and much more. Noted valuation authority and acclaimed NYU finance professor Aswath Damodaran uses real-world examples and valuation tools as he guides the reader through the theory and application of valuation models and highlights their strengths and weaknesses.
Expanded coverage addresses: valuation of unconventional assets, financial service firms, start-ups, private companies, dot-coms, and many other traditionally valued assets; risk in foreign countries and how best to deal with it; using real option theory and option pricing models in valuing business and equity; the models used to value different types of assets and the elements of these models; how to choose the right model for any given asset valuation scenario; online real-time valuations that are continually updated online. A guide for those who need to know more about the tricky business of valuation, "Investment Valuation", Second Edition, should be a valuable asset for anyone learning about this part of the investment process.
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 Earnings. Chapter 23: Valuing Young or Start-Up Firms. Chapter 24: Valuing Private Firms. Chaptet 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: Valuing Bonds. Chapter 34: Valuing Futures and Forward Contracts. Chapter 35: Overview and Conclusion. References. Index.
ASWATH DAMODARAN is Professor of Finance at New York University's Leonard N. Stern School of Business. He has been the recipient of numerous awards for outstanding teaching, including the NYU university-wide Distinguished Teaching Award, and was named one of the nation's top business school teachers by Business Week in 1994. In addition, Damodaran teaches training courses in corporate finance and valuation at many leading investment banks. His publications include Damodaran on Valuation; Investment Valuation; Corporate Finance; Investment Management; and Applied Corporate Finance, all published by Wiley, and The Dark Side of Valuation.