Damodaran on Valuation_ Security Analysis for Investment and Corporate Finance ( PDFDrive )
Reconciling the Two Approaches Inthespecificcasethatweexamined,thevalueofequityis lowerusingthenetdebtratioapproachthanwiththegr ...
Therearetwofactorscausingtheequityvaluedifference.The firstisthatweusedthesamecostofdebtusedunderthetwo approaches forcomputing ...
Ifweusethesedifferentpretaxcostsofdebtincomputingthe operating costof capital,thevaluesof equityareidentical usingboth thegrossd ...
bediscountedinvalue;inotherwords,adollarincashmay be valued at less than a dollar by the market. 21 1.Thecashheldbyafirmisinvest ...
Thevalueofcashthatisinvestedatalowerrateis$133.33 million. In this scenario, if the cash is returned to stockholders,itwouldyiel ...
30%thatthemanagement willtryto acquire anotherfirm. Further,assumethatthemarketanticipatesthatthefirmwill overpayby$50millionont ...
level,italsohappenswhenwefailtoadjustthecostofdebtin the gross debt and net debt approaches to reflect our assumptions about how ...
Unlevered beta Shouldbetheweighted average of the unlevered beta of operatingassetsandthe betaof cash(generally zero). Weights s ...
riskonthetwoinvestmentswillmaketheprice-earningsratio a function of the size of the cash balance. To see why, considerafirmwith$ ...
Whatrelevancedoesthishaveforrelativevaluation?Inmost relativevaluations,analystscomparetheprice-earningsratios of firms in a sec ...
Inthiscase,cashtradesatalowerprice-to-bookratiothanthe operatingassetsdo,andthepresenceofcashwillpushdown theprice-to-bookratiof ...
The cash balance that is netted out against firm value usuallyisfromthemostrecentfinancialstatements.Tothe extentthattherearese ...
willreportahighercashbalancebutitwillalsoreportmore debt outstanding. Thefinalcaveatthatweshouldaddrelatestodivestituresof porti ...
the handsof larger, more mature companies. Surprisingly, theyfindonlyaweakrelationshipbetweenhowthemarket values cash and a firm ...
Itshouldbenotedthatallofthesestudiesarebasedonvery largesamplesofdiversefirms.Whiletheyalltrytocontrol fordifferencesacrossfirms ...
To Make a Higher Return Near-cash investments such as Treasury bills and commercialpaperareliquidand havelittleor norisk,but the ...
Investinginriskierinvestmentsmayearnahigherreturnfor thefirm,butitdoesnotmakethefirmmorevaluable.Infact, usingthesamereasoningth ...
Howlikelyisitthatfirmswillfindundervaluedstocksand bondstoinvestin?Itdependsonhowefficientmarketsare and how good the managers o ...
the equity of software, entertainment, and Internet-related firms. It did so for several reasons. 29 First,itgaveMicrosoftasayin ...
Dealing with Marketable Securities in Valuation Marketable securities can include corporate bonds, with default risk embedded in ...
«
96
97
98
99
100
101
102
103
104
105
»
Free download pdf