Damodaran on Valuation_ Security Analysis for Investment and Corporate Finance ( PDFDrive )
Multiple Fundamental Determinants Price-to-sales ratio Expected growth, payout, risk, net margin Itispossible,however,thatthepro ...
relationshipamongandwiththeindependentvariablesused in the regression. Thefactthatmultiplesarenot normallydistributed canpose p ...
thequestionofhowhighanR-squaredhastobetobe meaningful,wewouldfocusonthepredictivepower oftheregression.WhentheR-squareddecreases ...
softwarecompanyrelativetoothersmallsoftwarecompanies, weareassumingthatthemarkethaspricedthesecompanies correctly on average, ev ...
1 Idid thestudy, which includedsell-side equity research reportsfromdifferentinvestmentbanksintheUnitedStates, London,and Asia.A ...
CHAPTER 8 Equity Multiples When investing in a stock, our interests primarily lie in whethertheequityin acompanyisfairlypriced.I ...
three decisions that we have to make that can have consequences for how we measure equity value: 1.Per-shareoraggregateequityval ...
areso different from the riskand returncharacteristics of operatingassetsthatitmaymakesense(especiallywhencash balances comprise ...
Equity earnings variables. In a conventional accounting statement,we begin with revenues, net outoperatingexpensestoarriveatope ...
extraordinaryitems.Thekeyistocomeupwithameasureof earningsthatiscomparableacrossdifferentfirms.Withthat objective inmind, itisqu ...
flow measures, and they have two choices with equitymultiples.Oneisanapproximatemeasureof cash earnings,obtainedby addingdepreci ...
value paid for each acquisitionand the difference between the market value and book value of the acquiredcompanyasgoodwill;thego ...
Measure of Equity Value Measure of Book Equity Price per share Book value of equity per share Aggregate market value of equity B ...
distributions themselvesare volatileand changeover time. Equitymultiplesarenoexceptiontothisgeneralrule.Inthis section,we examin ...
Table8.3presentssummarystatistics,inJanuary2006,onall threemeasuresoftheprice-earningsratio,startingwith the meanandthestandarde ...
LookingatallthreemeasuresoftheP/Eratio,themeanis consistentlyhigherthanthemedian,reflecting thefact that P/Eratioscanbeveryhighp ...
definedtobetheprice-earningsratiodividedbytheexpected growth rate in earnings per share: Forinstance,afirmwithaPEratioof 20 anda ...
In estimating these PEG ratios, the analyst estimates of growthinearningspershareoverthenextfiveyearsareused inconjunctionwithth ...
FIGURE 8.3 PEG Ratios for High-Growth Firms—U.S. Technology firms in January 2006 Table8.4includesthesummarystatistics,inJanuary ...
All FirmsTechnology Firms Standard error0.17 0.25 Median 1.70 1.66 Skewness 20.11 9.92 Range 234.24 60.43 Minimum 0.00 0.34 Maxi ...
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