- Hardcover: 992 pages
- Publisher: Wiley; 1 edition (21 March 2012)
- Language: English
- ISBN-10: 8126536004
- ISBN-13: 978-1118011522
- ASIN: 111801152X
- Product Dimensions: 18.8 x 4.1 x 25.9 cm
- Boxed-product Weight: 1.8 Kg
- Average Customer Review: Be the first to review this item
- Amazon Bestsellers Rank: 50,843 in Books (See Top 100 in Books)
Investment Valuation, Third Edition: Tools and Techniques for Determining the Value of Any Asset Hardcover – 21 Mar 2012
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From the Inside Flap
Now, in the Third Edition of Investment Valuation, New York University Stern Business School Professor Aswath Damodaranone of the nation's top business school professorsreturns with a fully updated edition of his classic text.
While written to reflect current market conditions, this reliable resource also stays true to previous editions with coverage of a wide range of tools and techniques, both new and old, for determining the value of any asset, including the valuation of stocks, bonds, options, futures, real assets, and much more.
Using updated examples and the most current valuation tools, this Third Edition addresses a variety of new issues that pose complex valuation problems. Page by page, Damodaran guides you through the theory and application of different valuation models and clarifies the entire process from cash flow valuation and relative valuation to acquisition valuation.
Engaging and accessible, this revised Third Edition of Investment Valuation:
- Explores important valuation lessons gleaned from the recent market crisis and provides valuable insights on financial fundamentalssuch as risk-free rates, risk premiums, and cash flow estimationthat came to light during this time
- Offers an increased focus on emerging market companies, which have come to the forefront with the growth of Asia and Latin America
- Includes valuation practices across the life cycle of companies and emphasizes value enhancement measures such as economic value-added (EVA) and cash flow return on investment (CFROI)
- Contains a new chapter on probabilistic valuation techniques that includes scenario analysis, decision trees, and simulations
- Discusses how to choose the right valuation model for any given asset valuation scenario
- And much more
Investment Valuation, Third Edition thoroughly explains the valuation process from the ground up and offers you some of the most flexible approaches to valuing assets. Now you can easily access a significant number of datasets and spreadsheets associated with this book online at damodaran.com. In fact, the valuations will constantly be updated online, so you can have a closer link to real-time valuations.
Filled with detailed case studies and proven valuation models, 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.
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Most helpful customer reviews on Amazon.com
This is a fabulous reference text. The author covers practically every aspect of valuation: big firms, small ones, private cos., real estate, m&a, etc. What I really liked were his methods for including option theory and use of options formulae for calculating value when there is no cash-flow, such as oil or mining reserves, or some sort of contingent claim on an asset.
The section on use of estimates for cost of equity and capital are highly detailed, and don't miss any of the many aspects that can affect the variables involved: country risk, default risk, etc.
Although the book is readable, and very clear and organized in the layout of the methodology, it is heavy reading. I for one, read at most one or two chapters at a time, because of the high level of detail, and the many sub-themes within the broad chapters. Also, I have had to read quite a few chapters once or twice because the material is abundant and the many formulae are easy to forget. That is why i would consider it a reference text, as opposed to other books of Damodaran on this subject, which are much more synthetic. His most recent book: "Narratives and Numbers" complements this text very well.
Professor Damodaran has gathered together a vast number of valuation techniques and gives us great background and context for applying them and when they will tend to provide good information and when they can mislead us. I think this is tremendously valuable. But it requires work on the part of the student or the business person trying to come up with a useful valuation for some asset.
In reality, we should use multiple techniques when considering any asset and see how well they agree with each other and where there are divergent valuations. We should then consider what is causing those differences and see if that analysis yields some valuable insight.
So, if you want to think deeply and seriously about valuation, this is a great resource. If you want a simple machine to crank out a number, this is not valuation for dummies.
I recommend this book strongly.
Reviewed by Craig Matteson, Saline, MI
Overall, this is still an excellent valuation book. Especially for someone that has not read the 2nd edition, this is an excellent resource. I would describe Damodaran's writing style as "honest," which means that he gives you both the good and the bad. He acknowledges that valuation is inherently a subjective process, which, in my opinion, can only be really done well with experience. I find this book as kind of a road map to good valuation fundamentals, as Damodaran shows you what alternatives you can do and what things to avoid.
No one does a better job than he does.
Small growing companies making losses, large behemoths lumbering to extinction, Mr Damodaran has a way to value them all.
His blog is really good and the fact that he makes his spreadsheets available to download is literally priceless.
Deals with all kinds of issues in valuation such as Net Operating Losses, Operating Leases, Research and Development Expenses, Stock Options, RSUs, and Cost of Capital Calculations.
Everything I needed for the project was in the book, however one thing surprised and disappointed me: the organization. I simply don't see much of a logical flow in the chapter structure, so I think it would be more difficult to someone who wasn't already familiar with the basic structure of the valuation process. Why is market efficiency jammed between unrelated chapters? Why is the discussion and examples of the pro-forma capitalization of R&D split between distant chapters? Throughout a single project, one would have to keep the book marked in several diffent places, not neccessarily in the order that one would have to deal with the questions if one were doing a valuation. The result is that this book is less easy to use as a practical guidebook than it could be, and will keep one busy in the index looking for where subjects are addressed.
This is nit-picking however. Professor Damodoran is to be congratulated for producing such a high quality and comprehensive text on valuation.
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