Investment Valuation PDF

Investment Valuation PDF- 3rd edition

Investment Valuation PDF -3rd edition– 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.

Category: Stock

Author: Aswath Damodaran

Language: English

Free Download link: At the end of the post

Introduction- Investment Valuation PDF

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- Investment Valuation PDF (3re edition)

Chapter 1 Introduction to Valuation 1

Chapter 2 Approaches to Valuation 11

Chapter 3 Understanding Financial Statements 27

Chapter 4 The Basics of Risk 58

Chapter 5 Option Pricing Theory and Models 87

Chapter 6 Market Efficiency—Definition, Tests, and Evidence 111

Chapter 7 Riskless Rates and Risk Premiums 154

Chapter 8 Estimating Risk Parameters and Costs of Financing 182

Chapter 9 Measuring Earnings 229

Chapter 10 From Earnings to Cash Flows 250

Chapter 11 Estimating Growth 271

Chapter 12 Closure in Valuation: Estimating Terminal Value 304

Chapter 13 Dividend Discount Models 323

Chapter 14 Free Cash Flow to Equity Discount Models 351

Chapter 15 Firm Valuation: Cost of Capital and Adjusted Present Value Approaches 380

Chapter 16 Estimating Equity Value per Share 423

Chapter 17 Fundamental Principles of Relative Valuation 453

Chapter 18 Earnings Multiples 468

Chapter 19 Book Value Multiples 511

Chapter 20 Revenue Multiples and Sector-Specific Multiples 542

Chapter 21 Valuing Financial Service Firms 581

Chapter 22 Valuing Firms with Negative or Abnormal Earnings 611

Chapter 23 Valuing Young or Start-Up Firms 643

Chapter 24 Valuing Private Firms 667

Chapter 25 Aquisitions and Takeovers 702

Chapter 26 Valuing Real Estate 739

Chapter 27 Valuing Other Assets 766

Chapter 28 The Option to Delay and Valuation Implications 781

Chapter 29 The Options to Expand and to Abandon: Valuation Implications 805

Chapter 30 Valuing Equity in Distressed Firms 826

Chapter 31 Value Enhancement: A Discounted Cash Flow Valuation Framework 841

Chapter 32 Value Enhancement: Economic Value Added, Cash Flow Return on Investment, and Other Tools 869

Chapter 33 Probabilistic Approaches in Valuation: Scenario Analysis, Decision Trees, and Simulations 894

Chapter 34 Overview and Conclusion 925

Index 954


“Aswath Damodaran’s work is always worth reading…. For investors and students of the financial markets who want to embark on serious fundamental analysis, it is critical to understand how to go about valuing stocks and other instruments. There is no short cut…. Damodaran’s Investment Valuation explains the hard work part.” (Seeking Alpha, May 2012)

“Love this book, a definite must have for anyone interested in valuation. I have multiple degrees in finance and find myself referring to this book often, for many different situations. The author demystifies what is often perceived as a complicated subject area, which makes the material much more approachable. It isn’t full of models to rinse and repeat, but instead contains useful explanations of theory to help with a variety of applications.”Silver Lightfoot

About the author

Aswath Damodaran is a professor of finance and David Margolis teaching fellow at the Stern School of Business at New York University. He teaches the corporate finance and equity valuation courses in the MBA program. He received his MBA and PhD from the University of California at Los Angeles. His research interests lie in valuation, portfolio management, and applied corporate finance.

He has been published in the Journal of Financial and Quantitative Analysis, the Journal of Finance, the Journal of Financial Economics, and the Review of Financial Studies. He has written three books on equity valuation (Damodaran on Valuation, Investment Valuation, and The Dark Side of Valuation) and two on corporate finance (Corporate Finance: Theory and Practice, Applied Corporate Finance: A User’s Manual). He has coedited a book on investment management with Peter Bernstein (Investment Management) and has written a book on investment philosophies (Investment Philosophies). His newest book on portfolio management is titled Investment Fables and was published in 2004. He was a visiting lecturer at the University of California, Berkeley, from 1984 to 1986, where he received the Earl Cheit Outstanding Teaching Award in 1985. He has been at NYU since 1986 and received the Stern School of Business Excellence in Teaching Award (awarded by the graduating class) in 1988, 1991, 1992, 1999, 2001, and 2007, and was the youngest winner of the University-wide Distinguished Teaching Award (in 1990). He was profiled in Business Week as one of the top 12 business school professors in the United States in 1994.

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