DEDICATION PREFACE Chapter 1 Introduction to Valuation A Philosophical Basis for Valuation Pricing versus Valuation The Bermuda Triangle of Valuation Market Efficiency The Role of Valuation Conclusion Chapter 2 Approaches to Valuation Intrinsic Valuation Pricing or Relative Valuation Contingent Claim Valuation Conclusion Chapter 3 Understanding Financial Statements The Basic Accounting Statements Asset Measurement and Valuation Measuring Financing Mix Measuring Earnings and Profitability Measuring Risk Other Issues in Analyzing Financial Statements Conclusion Chapter 4 The Basics of Risk What Is Risk? Equity Risk and Expected Return Alternative Models for Equity Risk A Comparative Analysis of Equity Risk Models Models of Default Risk Conclusion Chapter 5 Option Pricing Theory and Models Basics of Option Pricing Option Pricing Models Extensions of Option Pricing Conclusion Chapter 6 Market Efficiency--Definition, Tests, and Evidence Market Efficiency and Investment Valuation What Is an Efficient Market? Testing Market Efficiency Cardinal Sins in Testing Market Efficiency Some Lesser Sins That Can Be a Problem Evidence on Market Efficiency Time Series Properties of Price Changes Market Anomalies Evidence on Insiders and Investment Professionals Conclusion Chapter 7 Riskless Rates and Risk Premiums The Risk-Free Rate Equity Risk Premium Default Spreads on Bonds Conclusion Chapter 8 Estimating Risk Parameters and Costs of Financing The Cost of Equity and Capital Cost of Equity From Cost of Equity to Cost of Capital Best Practices at Firms Conclusion Chapter 9 Measuring Earnings The Lead in: From accounting data to financial information Adjusting Earnings Measuring Earnings Power: Clean up and Time Differences Conclusion Chapter 10 From Earnings to Cash Flows The Tax Effect Reinvestment Needs Conclusion Chapter 11 Estimating Growth The Importance of Growth Historical Growth Outsourcing Growth Fundamental Determinants of Growth Top-Down Growth: From Revenue Growth to Free Cash Flows Qualitative Aspects of Growth Conclusion Chapter 12 Closure in Valuation: Estimating Terminal Value Closure in Valuation The Survival Issue Closing Thoughts on Terminal Value Conclusion Chapter 13 Narrative and Numbers - Story to Value Valuation as a Bridge From Story to Numbers: The Process Narrative and Numbers across the Life Cycle Story Resets, Changes and Breaks Conclusion Chapter 14 Equity Intrinsic Value Models Equity Valuation The Dividend Discount Model The Augmented Dividend Discount Model Potential Dividend or FCFE Models FCFE Valuation Versus Dividend Discount Model Valuation Conclusion Chapter 15 Firm Valuation: Cost of Capital and Adjusted Present Value Approaches Free Cash Flow to the Firm Firm Valuation: The Cost of Capital Approach Firm Valuation: The Adjusted Present Value Approach Firm Valuation - Sum of the parts Effect of Leverage on Firm Value Conclusion Chapter 16 Estimating Equity Value Per Share Value of Nonoperating Assets Firm Value and Equity Value Stock-based Compensation Value Per Share When Voting Rights Vary Conclusion Chapter 17 Fundamental Principles of Relative Valuation Use of Relative Valuation Standardized Values and Multiples Four Basic Steps to Using Multiples Reconciling Relative and Discounted Cash Flow Valuations Conclusion Chapter 18 Earnings Multiples Price-Earnings Ratio The PEG Ratio Other Variants on the PE Ratio Other Variants on the PE Ratio Enterprise Value to EBITDA Multiple Conclusion Chapter 19 Book Value Multiples Price-to-Book Equity Value-to-Book Ratios Tobin''S Q: Market Value/Replacement Cost Conclusion Chapter 20 Revenue Multiples and Sector-Specific Multiples Revenue Multiples Sector-Specific Multiples Conclusion Chapter 21 Valuing Financial Service Firms Categories of Financial Service Firms What Is Unique About Financial Service Firms? General Framework for Valuation Discounted Cash Flow Valuation Relative Valuation The Crisis Effect Non-bank financial service firms Conclusion Chapter 22 Valuing Money Losing Firms Negative Earnings: Consequences and Causes Valuing Money-losing Firms Conclusion Chapter 23 Valuing Young or Start-Up Firms Information Constraints General Framework for Analysis Value Drivers Estimation Noise The Expectations Game Conclusion Chapter 24 Valuing Private Firms What Makes Private Firms Different? Estimating Valuation Inputs at Private Firms Valuation Motives and Value Estimates Valuing Venture Capital and Private Equity Stakes Pricing Private Businesses Conclusion Chapter 25 ACQUISITIONS AND TAKEOVERS Background on Acquisitions Steps in an Acquisition Takeover Valuation: Biases and Common Errors Structuring the Acquisition Improving the Odds Analyzing Management and Leveraged Buyouts Conclusion Chapter 26 Valuing Real Estate Real Versus Financial Assets Real Estate: The Underfollowed Investment class Intrinsic Valuation of Real Estate Comparable/Relative Valuation Valuing Real Estate Businesses Conclusion Chapter 27 Valuing Other Assets Investment classification Cash-Flow-Producing Assets Collectibles Trophy Assets Conclusion Chapter 28 The Option to Delay and Valuation Implications Real Options: Promise and Pitfalls The Option to Delay a Project Valuing a Patent Natural Resource Options Other Applications Conclusion Chapter 29 The Options to Expand and to Abandon: Valuation Implications The Option to Expand When Are Expansion Options Valuable? Valuing a Firm with the Option to Expand Valuing the Optionality in Users and Data Value of Financial Flexibility The Option to Abandon Reconciling Net Present Value and Real Option Valuations Conclusion Chapter 30 Valuing Equity in Distressed Firms Equity in Highly Levered Distressed Firms Optionality in Valuation: A Corporate Life Cycle Perspective Implications of Viewing Equity as an Option Estimating the Value of Equity as an Option Distressed Equity as an Option: Consequences for Decision Making Conclusion Chapter 31 Value Enhancement: A Discounted Cash Flow Valuation Framework Value-Creating and Value-Neutral Actions Ways of Increasing Value Value Enhancement Chain Closing Thoughts on Value Enhancement Conclusion Chapter 32 Value Enhancement: Economic Value Added, Cash Flow Return on Investment, and Other Tools Economic Value Added Cash Flow Return on Investment A Postscript on Value Enhancement Conclusion Chapter 33 Probabilistic Approaches in Valuation: Scenario Analysis, Decision Trees, and Simulations Scenario Analysis Decision Trees Simulations An Overall Assessment of Probabilistic Risk-Assessment Approaches Conclusion Chapter 34 Overview and Conclusion Scenario Analysis Choices in Valuation Models Which Approach Should You Use? Choosing the Right Intrinsic Valuation Model Choosing the Right Pricing Model When Should You Use the Option Pricing Models? Conclusion References Index.