Damodaran on Valuation_ Security Analysis for Investment and Corporate Finance ( PDFDrive )
Useexpectedvalues.Thefuturerevenuesorearnings usedinthevaluationshouldbeexpectedvaluesand not best-case estimates. With both di ...
Enterprise value multiples look at market value of the operatingassetsofthefirmandnotjusttheequityinvestedin them.Thus,theyprovi ...
PART THREE Loose Ends in Valuation Thereliefwefeeloncewehavevaluedtheoperatingassetsof a firmshouldbe short-lived. Itis in thisp ...
In Chapter 13, we deconstruct the control premium, often usedtojustifylargepremiumsinacquisitions,andarguethat thevalueofcontrol ...
CHAPTER 10 Cash, Cross Holdings, and Other Assets Mostfirms,privateandpublic,haveassetsontheirbooksthat canbe consideredto be no ...
cashandtheextentofsuchholdingsatcompanies.Wethen discussvariousapproachesusedtocategorizecashholdings andhowbesttodealwithcashho ...
Cash-oriented versus credit-oriented businesses. Firmsthatareincash-orientedbusinesses(fast-food restaurants,grocerystores)will ...
Thesecondreasonforholdingcashistocoverunanticipated expensesortomeetunspecifiedcontingencies.Forexample, cyclicalfirmswillaccumu ...
Future Capital Investments If capital markets were efficient and always accessiblewithnotransactionscosts,firmscouldraisefresh c ...
companies.Cashbalancesshouldalsodecreasewith anincreaseinthefinancialchoicesthatfirmshaveto raisecapital.Thus,thecapacityto acce ...
cash during economic crises to buy assets from distressed firms at bargain prices. The advantage to holding cash becomesmuchsmal ...
13 Thereisalsoevidencethatfirmsthataccumulatecashtendto report subpar operating performance, at least on average. 14 Extent of C ...
3.Cashasapercentofafirm’srevenues.Thismeasuresthe linkage(ifoneexists)betweencashholdingsandoperations. Figure10.3providesthedis ...
FIGURE 10.3Cash as a Percent of Revenues ...
WhileFigures10.1through10.3provideusefulinformation aboutthedifferencesacrossallfirms,itisstillinstructiveto lookunderneathatdif ...
neededforoperationsisnoteasy,thoughtherearethreeways in which this estimation is made: 1.Ruleofthumb.Fordecades,analystshaveused ...
Wasting versus Nonwasting CashInourview,thedebateabouthowmuchcashisneeded foroperationsandhowmuchisexcesscashmissesthepoint when ...
thebookinterestrateearnedoncashwillbelowerthanthe marketinterestrate.Considerasimpleexample.CyberTech Inc.hadanaveragecashbalanc ...
There aretwo ways in which we can deal with cash and marketablesecuritiesindiscountedcashflowvaluation.One istolumptheminwiththe ...
wouldneedtoadjustthebetaaccordingly.Whilethiscanbe donesimplyifyouusebottom-upbetas,youcanseethatit wouldbemuchmoredifficulttodo ...
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