This was a great publication. As of it’s the best Financing book I’ve ever read now. It is an essential reference for learning the basics of how to value stocks and their underlying firms. Sometimes in Finance classes they just give you formulas or superficial information about how to resolve problems without letting you know how to create a meaningful model to help you in real life. This written publication paints an image and a process for how to approach valuation. The writing is easy to follow and the examples are rich with details yet they are also understandable rather than muddling down with confusing wording or semantics.
He always retains the picture as a whole of what we should want to accomplish with the valuation at heart and does an amazing job of seamlessly connecting different principles from different parts of the chapter. With his examples Damadoran needs complex information and ideas and transforms them into simple and significant models and equations that are intuitive and easy to follow.
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I used the reserve to create valuation models for the situations in my class and the models were accurate and offered insight into how to value companies in real life. The examples are way much better than the typical textbook with the chapter and end of the section problems design that so many textbooks use.
The book opened my brain to how the valuation of companies is achieved. I am a huge enthusiast of Damadoran now. I recommend this reserve strongly! Damodaran is well known in the academic/financial arena. The next edition clears up many hiccups in the first edition. There are other books out there that will provide you with most of the information in this book, however, not with as much fine detail and description.
Also, this book is written perfectly. It does a great job of keeping the student’s interest rather than sounding too dry (most of the time). I bought this for one finance class and have used it as a supplement in all other finance classes nearly. Every finance professor I have asked about Damodaran speaks very highly of him.
Although this publication material/methodology sticks mainly to the educational world, it still supplies the audience with the real-world content and thorough understanding that will be needed available world. If you need a detailed yet useful analysis of valuation truly, then this is actually the publication for you. I saw the author speak at a conference which prompted me to buy the written book. His presentation and book nicely merge theory with practice — too many valuation books are academic and don’t deal with the real-life problems.
He appears to anticipate the types of real-life issues you’ll get and then lets you know how to handle them (about 50 % the publication addresses these “loose ends” that aren’t always covered in more basic valuation materials). The publication is targeted at valuation practitioners and MBA students mainly. The book handles 3-valuation techniques- DCF, relative valuation (based on PE, P/BV, PS multiples), and contingent claims (options).
Great insights into determining key factors (PE, PS, P/BV) predicated on business-basic principles and pro and downsides of using each strategy. However, the publication will not get into enough depth in CAPM and APT. The writer assumes that the reader would have a good idea about financial ratios, fundamentals etc. The very best area of the book handles the valuation of special cases like cyclical companies, brands etc. and exactly how corporate restructuring affects value. It offers great insights into valuation for takeovers and mergers as well. The author provides a usable framework for valuing intangibles within an acquisition target- what the various sources of synergy are as well as how to value each in a lucid framework.
Overall, a good publication to gain a company footing in investment valuation techniques. This is an excellent reserve. It serves as both a course in valuation as well as a useful research tool. The reserve is weighted to discounted cash flow evaluation intensely, though it also discusses comparative valuation (like P/E multipliers) and contingent statements. Clearly written the publication presents in detail simple to complicated DCF centered models (dividend-discount model, free cash flow to collateral and free cash flow to the firm). This range of models to deal with the complex valuation issue of variable development.
After presenting a model, its limitations and best uses are described. He then shows how these models can be used to derive P/E, P/S, and P/BV ratios from fundamentals. Abundant examples are used to make the material clear. The publication also talks about special situations, e.g., cyclical firms, and distressed companies to mention only a few.