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| Introduction to Valuation | |
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| A Philosophical Basis for Valuation | |
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| Generalities about Valuation | |
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| The Role of Valuation | |
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| Conclusion | |
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| Questions and Short Problems | |
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| Approaches to Valuation | |
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| Discounted Cash Flow Valuation | |
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| Relative Valuation | |
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| Contingent Claim Valuation | |
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| Conclusion | |
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| Questions and Short Problems | |
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| Understanding Financial Statements | |
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| The Basic Accounting Statements | |
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| Asset Measurement and Valuation | |
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| Measuring Financing Mix | |
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| Measuring Earnings and Profitability | |
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| Measuring Risk | |
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| Other Issues in Analyzing Financial Statements | |
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| Conclusion | |
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| Questions and Short Problems | |
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| The Basics of Risk | |
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| What is Risk? | |
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| Equity Risk and Expected Return | |
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| Alternative Models for Equity Risk | |
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| A Comparative Analysis of Equity Risk Models | |
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| Models of Default Risk | |
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| Conclusion | |
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| Questions and Short Problems | |
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| Option Pricing Theory and Models | |
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| Basics of Option Pricing | |
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| Determinants of Option Value | |
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| Option Pricing Models | |
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| Extensions of Option Pricing | |
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| Conclusion | |
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| Questions and Short Problems | |
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| Market Efficiency�Definition, Tests, and Evidence | |
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| Market Efficiency and Investment Valuation | |
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| What Is an Efficient Market? | |
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| Implications of Market Efficiency | |
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| Necessary Conditions for Market Efficiency | |
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| Propositions about Market Efficiency | |
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| Testing Market Efficiency | |
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| Cardinal Sins in Testing Market Efficiency | |
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| Some Lesser Sins That Can Be a Problem | |
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| Evidence on Market Efficiency | |
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| Time Series Properties of Price Changes | |
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| Market Reaction to Information Events | |
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| Market Anomalies | |
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| Evidence on Insiders and Investment Professionals | |
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| Conclusion | |
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| Questions and Short Problems | |
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| Riskless Rates and Risk Premiums | |
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| The Risk-Free Rate | |
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| Equity Risk Premium | |
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| Default Spreads on Bonds | |
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| Conclusion | |
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| Questions and Short Problems | |
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| Estimating Risk Parameters and Costs of Financing | |
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| The Cost of Equity and Capital | |
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| Cost of Equity | |
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| From Cost of Equity to Cost of Capital | |
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| Best Practices at Firms | |
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| Conclusion | |
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| Questions and Short Problems | |
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| Measuring Earnings | |
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| Accounting versus Financial Balance Sheets | |
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| Adjusting Earnings | |
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| Conclusion | |
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| Questions and Short Problems | |
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| From Earnings to Cash Flows | |
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| The Tax Effect | |
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| Reinvestment Needs | |
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| Conclusion | |
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| Questions and Short Problems | |
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| Estimating Growth | |
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| The Importance of Growth | |
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| Historical Growth | |
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| Analyst Estimates of Growth | |
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| Fundamental Determinants of Growth | |
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| Qualitative Aspects of Growth | |
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| Conclusion | |
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| Questions and Short Problems | |
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| Closure in Valuation: Estimating Terminal Value | |
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| Closure in Valuation | |
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| The Survival Issue | |
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| Closing Thoughts on Terminal Value | |
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| Conclusion | |
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| Questions and Short Problems | |
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| Dividend Discount Models | |
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| The General Model | |
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| Versions of the Model | |
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| Issues in Using the Dividend Discount Model | |
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| Tests of the Dividend Discount Model | |
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| Conclusion | |
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| Questions and Short Problems | |
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| Free Cash Flow to Equity Discount Models | |
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| Measuring What Firms Can Return to Their Stockholders | |
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| FCFE Valuation Models | |
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| FCFE Valuation versus Dividend Discount Model Valuation | |
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| Conclusion | |
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| Questions and Short Problems | |
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| Firm Valuation: Cost of Capital and Adjusted Present Value Approaches | |
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| Free Cash flow to the Firm | |
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| Firm Valuation: The Cost of Capital Approach | |
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| Firm Valuation: The Adjusted Present Value Approach | |
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| Effect of Leverage on Firm Value | |
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| Adjusted Present Value and Financial Leverage | |
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| Conclusion | |
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| Questions and Short Problems | |
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| Estimating Equity Value per Share | |
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| Value of Nonoperating Assets | |
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| Firm Value and Equity Value | |
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| Management and Employee Options | |
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| Value per Share When Voting Rights Vary | |
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| Conclusion | |
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| Questions and Short Problems | |
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| Fundamental Principles of Relative Valuation | |
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| Use of Relative Valuation | |
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| Standardized Values and Multiples | |
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| Four Basic Steps to Using Multiples | |
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| Reconciling Relative and Discounted Cash Flow Valuations | |
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| Conclusion | |
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| Questions and Short Problems | |
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| Earnings Multiples | |
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| Price-Earnings Ratio | |
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| The PEG Ratio | |
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| Other Variants on the PE Ratio | |
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| Enterprise Value to EBITDA Multiple | |
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| Conclusion | |
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| Questions and Short Problems | |
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| Book Value Multiples | |
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| Price-to-Book Equity | |
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| Applications of Price�Book Value Ratios | |
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| Revenue Multiples and Sector-Specific Multiples | |
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| Valuing Financial Service Firms | |
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| Valuing Firms with Negative or Abnormal Earnings | |
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| Valuing Young or Start-Up Firms | |
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| Valuing Private Firms | |
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| Aquisitions and Takeovers | |
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| Valuing Real Estate | |
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| Valuing Other Assets | |
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| The Option to Delay and Valuation Implications | |
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| The Options to Expand and to Abandon: Valuation Implications | |
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| Valuing Equity in Distressed Firms | |
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| Value Enhancement: A Discounted Cash Flow Valuation Framework | |
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| Value Enhancement: Economic Value Added, Cash Flow Return on Investment, and Other Tools | |
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| Probabilistic Approaches in Valuation: Scenario Analysis, Decision Trees, and Simulations | |
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| Overview and Conclusion | |