Damodaran on Valuation_ Security Analysis for Investment and Corporate Finance ( PDFDrive )
firmstockholders,whoplayednoroleintheacquiringfirm’s higher rating, be paid a premium for that higher rating? Payingthishigherva ...
Notwithstandingthisprinciple,therearesomecommonerrors that continue to be made when it comes to valuing synergy: Cash flows gen ...
valueofsynergyforthefollowingreason:Synergyrequires twoentities(firms,businesses,projects)foritsexistenceand iscreatedbycombinin ...
synergy,acquiringfirmstockholdersgetalmostnoneofthe benefits of the increased value; in fact, they overpay for synergyinmostacqu ...
thatmaybecreatedwhenthetargetstockpriceincreasesonce an acquisition is announced. 6 Paul D.Childs,StevenH.Ott, and AlexanderJ.Tr ...
tocomputethecostofcapitaleachyear,usingtheestimated value of the firms each year. 11 L. Lang and R. Stulz, “Tobin’s Q, Corporate ...
17 G.Andrade,“DoAppearancesMatter?TheImpactofEPS Accretion and Dilution on Stock Prices,” working paper, Harvard Business School ...
25 M.L.MitchellandK.Lehn,“DoBadBiddersMakeGood Targets?,”Journal of AppliedCorporateFinance 3 (1990): 60–69. 26 S. Kaplan and M. ...
33 P.Hietalla,S.N.Kaplan,andD.T.Robinson,“WhatIsthe Price of Hubris? Using Takeover Battles to Infer OverpaymentsandSynergies,”w ...
CHAPTER 16 The Value of Transparency When valuing firms, we draw on financial statements for information and trust these stateme ...
AN EXPERIMENT Consider thefollowingexperiment.Youareanalyzing two firms with thesame overall market risk exposure and the same f ...
differencesacrossfirmsonfundamentals,thesefundamentals tendtobefinancial(risk,growth,andcashflows)andalmost neverrelatetocomplex ...
information.Inthesecond,theinformationmaybeavailable, but the firm itself is so complex (either because of its organizationalstr ...
emerging marketsareoftenincomplete andleave out large chunksofrelevantinformation,largelyasaconsequenceof lax regulatory require ...
Theaccountingstandards thatareonthebookstodaywere originally written for manufacturing firms that dominated business 40 yearsago ...
6 Whymightthisaddtothecomplexityoffinancialstatements? Depending on what assets they invest in and how they structurethese inves ...
9 Someofthesefirmsusetheseentitiesaslegitimatedevices to reduce their cost of debt and then provide information abouttheirexiste ...
Unintended Consequences of Increased Disclosure Requirements Overthepastthreedecades,wehaveseenanincreasingfocus on information ...
complexityofP&G’sbusinesses,alargeportionofitreflects the effects of new accounting edicts and rules. FIGURE16.1NumberofPage ...
Business Mix Some firms aremore complex thanothers simply because they operate in multiple businesses, often with little in comm ...
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