Damodaran on Valuation, Study Guide

Written by a gifted teacher and respected valuation authority, Damodaran on Valuation offers systematic examination of the threebasic approaches to valuation - discounted cash-flow valuation,relative valuation, and contingent claim valuation - and thevarious models within these broad categories. Using numerous real-world examples involving both US andInternational firms, the book illuminates the purpose of eachparticular model, its advantages and limitatations, thestep-by-step process involved in putting the model to work, and thekinds of firms to which it is best applied. Among the toolspresented are designed to: - Estimate the cost of equity - including the capital asset pricingmodel and arbitrage pricing model - Estimate growth rates - with coverage of how to arrive at aweighted average of growth rates by blending three separateapproaches - Value equity - focusing on the Gordon Growth Model and thetwo-and three-stage dividend discount model - Measure free cash flow to equity - cash flows that are carefullydelineated from the dividends of most firms - Value firms - including free cash flow to firm models, which areespecially suited to highly leveraged firms - Estimate the value of assets by looking at the pricing ofcomparable assets - with insight into the use and misuse ofprice/earning and price/book value ratios, and underutilizedprice-to-sales ratios - Measure the value of assets that share option characteristics -including a comparative look at the classic Black-Scholes andsimpler binomial models Supported by an optional IBM-compatible disk, which consists ofspreadsheet programs designed to help users apply the modelshighlighted in the book, Damodaran on Valuation providespractitioners involved in securities analysis, portfoliomanagement, M&A, and corporate finance with the knowledge theyneed to value any asset.