Valuation: The Art and Science of Corporate Investment Decisions

For upper-division undergraduate and MBA students as well as business professionals.

A Holistic Approach to Project and Enterprise Valuation

The Art and Science of Corporate Investment Decisions provides an up-to-date, integrated treatment of the valuation of investment opportunities. Taking both industry practice and recent advances in valuation methods into consideration, this text introduces students to a broad spectrum of valuation approaches and equips them to make wise investment decisions.

The Third Edition exposes readers to the latest valuation tools being used in the industry. Practical examples are offered throughout the text to help students understand core principles in the context of realistic situations. Using the accompanying spreadsheets and simulation tools, students will be able to glean information from a variety of sources, construct models that utilize this information, and then summarize their analysis in a meaningful way.

Preface

Acknowledgments

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1. Overview of Valuation

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PART I:? PROJECT ANALYSIS USING DISCOUNTED CASH FLOW (DCF)

2. Forecasting and Valuing Cash Flows

3.?Project Risk Analysis

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PART II: COST OF CAPITAL

4. Estimating a Firm's Cost of Capital

5. Estimating Required Rates of Return for Projects

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PART III: FINANCIAL STATEMENTS AND VALUATION

6. Forecasting Financial Performance

7. Earnings Dilution, Incentive Compensation, and Project Selection

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PART IV: ENTERPRISE VALUATION

8. Relative Valuation Using Market Comparables

9. Enterprise Valuation

10. Valuation in a Private Equity Setting

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PART V : FUTURES, OPTIONS, AND THE VALUATION OF REAL INVESTMENTS

11. Using Futures and Options to Value Real Investments

12. Managerial Flexibility and Project Valuation: Real Options

13. Strategic Options: Evaluating Strategic Opportunities

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Epilogue

Index