- Paperback: 992 pages
- Publisher: Wiley; 1 edition (19 March 2012)
- Language: English
- ISBN-10: 1118130731
- ISBN-13: 978-1118130735
- Product Dimensions: 17.5 x 3.6 x 25.1 cm
- Boxed-product Weight: 1.3 Kg
- Average Customer Review: Be the first to review this item
- Amazon Bestsellers Rank: 31,059 in Books (See Top 100 in Books)
Investment Valuation, Third Edition: Tools and Techniques for Determining the Value of Any Asset, University Edition Paperback – 19 Mar 2012
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From the Back Cover
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. Now completely revised and updated to reflect changing market conditions, the Third University Edition of Investment Valuation provides expert instruction on how to value virtually any type of assetstocks, bonds, options, futures, real assets, and much more.
Written by noted valuation authorityand acclaimed New York University Stern Business School ProfessorAswath Damodaran, this reliable resource uses real-world examples and the most current valuation tools to guide you through the theory and application of various valuation models. Along the way, it provides comprehensive coverage of:
- The valuation lessons learned from the recent market crisis
- Using real option theory and option pricing models in valuing business and equity
- Valuation of unconventional assets, financial service firms, start-ups, emerging market companies, and many other traditionally valued assets
- Probabilistic approaches in valuation, such as scenario analysis, decision trees, and simulations
- How to choose the right model for any given asset valuation scenario
A perfect guide for those who need to know more about the tricky business of valuation, the Third University Edition of Investment Valuationwhich includes an instructor's companion sitewill be an essential asset to anyone learning about this critical part of the investment process.
About the Author
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 BusinessWeek in 1994. In addition, Damodaran teaches training courses in corporate finance and valuation at many leading investment banks. His publications include Damodaran on Valuation: Security Analysis for Investment and Corporate Finance; Investment Valuation; Corporate Finance; Investment Management; and Applied Corporate Finance, all published by Wiley, and The Dark Side of Valuation.
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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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