Damodaran on Valuation_ Security Analysis for Investment and Corporate Finance ( PDFDrive )
thesecompanies.Zacks,IBES,andFirstCall,tonamethree services among many, provide summaries of how many analystsarebullishorbearis ...
deal is seriously overpriced and recommend rejection, in which casetheanalyst receivestheeternalgratitudeofthe stockholdersofthe ...
Thethirdistoleavethevalueasisbutattributethedifference betweenthevalueweestimateandthevaluewethinkisthe rightonetoaqualitativefa ...
2.Delinkvaluationsfromreward/punishment.Anyvaluation processwheretherewardorpunishmentisconditionalonthe outcomeofthevaluationwi ...
moreprotectedfromovertoutsideinfluencesandbyreporting our biases with our estimated values. It Is Only an Estimate: Imprecision ...
1.Estimationuncertainty.Evenifourinformationsourcesare impeccable,wehavetoconvertrawinformationintoinputs and use these inputs i ...
constant flow of information into financial markets, a valuationdoneonafirmagesquicklyandhastobeupdated to reflectcurrent inform ...
Probabilisticstatements. Some analystscouch their valuations in probabilistic terms to reflect the uncertainty that they feel. ...
ways of valuing companies (multiples and comparables,forexample)thatdonotrequireexplicit assumptions about the future. A few dec ...
believethatinterestratestodayaretoolowandthattheywill goupbyabout1.5percentoverthenextyear.Ifyoubuildthe expectedriseininterestr ...
preciselythanotherssimplybecausethereislessuncertainty about the future. We can value a mature company with relatively few assum ...
Valuationmodelshavebecomemoreandmorecomplexover thepasttwodecadesasaconsequenceoftwodevelopments. Ontheoneside,computersandcalcu ...
A parallel and related question to how much detail there should be in a valuation is the one of how complex a valuationmodelshou ...
words,theassumptionthatpretaxoperatingmargins willstayat 20 percent(abigassumptionthatdoubles thevalueofthecompany)hastocompetew ...
2 APPROACHES TO VALUATION Analystsusea widespectrum ofmodels,rangingfrom the simpleto thesophisticated.Thesemodelsoftenmakevery ...
classroomsandcomeswiththebesttheoreticalcredentials.In thissection,wewilllookatthefoundationsoftheapproach andsomeoftheprelimina ...
Using DCF models is in some sense an act of faith. We believethateveryassethasanintrinsicvalueandwetryto estimate that intrinsic ...
of assets and a business. A businessor a company is an ongoingentitywithassetsthatitalreadyownsandassetsit expectstoinvestinthef ...
One special case of asset-based valuation is liquidation valuation,wherewevalueassetsbased onthepresumption thattheyhavetobesold ...
The second way is to just value the equity stake in the business,andthisiscalledequityvaluation.(SeeFigure1.3.) Thecashflowsafte ...
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