Damodaran on Valuation_ Security Analysis for Investment and Corporate Finance ( PDFDrive )
31 Interestexpenses alwayslower netincome,but thefact that the firm uses debt instead of equity implies that the numberofsharesw ...
37 Thedetailsofthiscalculationwillbeexploredlaterinthis chapter. 38 Foramorecompletediscussionofthisestimationprocess, please lo ...
45 Ifthefirmhasoperating leasesoutstanding, theinterest coverage ratio should be modified. The lease expense should be the curre ...
51 Therearesomewhoarguethatstockpricesaremuchmore volatilethantheunderlyingtruevalue.Evenifthisargument isjustified(andithasnotc ...
54 Preferredstockshouldreallynotbetreatedasdebt.Inthis case,though,theamountofpreferredstockissosmallthat we have included it as ...
CHAPTER 3 Measuring Cash Flows Cashflowsarekeyto discountedcash flowvaluations.To estimate cash flows, we usually begin with a m ...
justtheequityinvestorsinthebusinessandarethusafterall cashflowsassociatedwithdebt(interestpayments,principal payments,newdebtiss ...
flows could have been defined before corporate taxes, in which case the discount rate used should have been a precorporate tax d ...
requiredtovaluefirmsallthroughtheyear.Consequently,the lastannualreportthatisavailableforafirmbeingvaluedcan containinformationt ...
using numbers from the last financial year will lead to undervaluing them. Even for those firms that are not are changing substa ...
The trailing 12-month revenues are more than twice the revenuesreportedinthelatest10-K,andthefirm’soperating loss and net loss h ...
forfinancialexpensessuchasoperatingleasesexpensesthat are treated as operating expenses. This affects the measurement of operati ...
Research expenses, notwithstanding the uncertainty about futurebenefits,shouldbecapitalized.Tocapitalizeandvalue researchassets, ...
year’s entire R&D expense to arrive at the value of the researchasset.Thisaugmentsthevalueoftheassetsofthe firm and, by exte ...
expensewas$3,320million.Weassumedanamortizablelife offiveyearsforitsresearchefforts,someofwhicharebasic and some of which are di ...
Note that none of thecurrent year’s expenditurehas been amortizedbecauseitisassumed tooccurattheend ofthe year,butthatalloftheex ...
Boththebookvalueofequityandcapitalareaugmentedby thevalueoftheresearchasset.Sincemeasuresofreturnon capitaland equityarebased on ...
otheroperatingexpensesthatarguablyshouldbe treatedas capital expenses. Consumer product companies such as Gillette and Coca-Cola ...
Determinetheperiodoverwhich thebenefitsfrom the operating expense (such as SG&A) will flow. Estimatethevalueoftheasset(simi ...
If we assume that the depreciation on the leased asset approximatestheprincipalportionofthedebtbeingrepaid, theadjustedoperating ...
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