Damodaran on Valuation: Security Analysis for Investment and Corporate Finance (Wiley Finance) [Hardcover]

Aswath Damodaran (Author)

Book Description

Publication Date: August 4, 2006 | ISBN-10: 0471751219 | ISBN-13: 978-0471751212 | Edition: 2

"Aswath Damodaran is simply the best valuation teacher around. If you are interested in the theory or practice of valuation, you should have Damodaran on Valuation on your bookshelf. You can bet that I do."
-- Michael J. Mauboussin, Chief Investment Strategist, Legg Mason Capital Management and author of More Than You Know: Finding Financial Wisdom in Unconventional Places

In order to be a successful CEO, corporate strategist, or analyst, understanding the valuation process is a necessity. The second edition of Damodaran on Valuation stands out as the most reliable book for answering many of today?s critical valuation questions. Completely revised and updated, this edition is the ideal book on valuation for CEOs and corporate strategists. You'll gain an understanding of the vitality of today?s valuation models and develop the acumen needed for the most complex and subtle valuation scenarios you will face.

Editorial Reviews

From the Inside Flap

The ability to value any asset is an essential skill in a wide variety of professional environments, from corporate finance to portfolio management to strategy. And while the reasons for doing valuation are as wide-ranging and varied as business itself, the fundamental precepts underlying valuation are surprisingly similar in both form and function.

Damodaran on Valuation, Second Edition provides you with today's most straightforward and comprehensive examination of the approaches and models necessary for performing valuations. Written by renowned teacher, author, and valuation authority Aswath Damodaran, and fully revised and updated from its top-selling first edition—which has become the essential reference for any professional needing accurate and reliable valuation information—this invaluable book now provides you with:

• In-depth coverage of different distinct valuation approaches and key models within each
• Techniques for accurately assessing the effect on value of employee stock options and other equity-based compensation
• Methodologies for using valuation models to value intangible assets—patents, copyrights, trademarks, licenses, brand names, and more
• Sound strategies for identifying and measuring the value of control in any business and why the expected value of control plays a role in many different valuation contexts
• Discussion of how liquidity—or, more accurately, illiquidity—affects value, along with ways to measure this impact on value
• Potential sources of the ever-elusive "synergy" when combining two entities, how best to value each type of synergy, and an examination of why firms so often overpay for synergy
• Techniques for measuring the costs of accounting opacity and business complexity, and accurately discounting the value of complex firms to promote transparency at every level
• A commonsense framework you can use to sift through numerous possible valuation models to determine the best model for your valuation task

For more than a decade, Damodaran on Valuation has been the standard valuation reference for professionals in virtually everyfield. Business realities have changed dramatically over that time, but the principles underlying valuation have not. Let this comprehensively revised and updated edition give you the knowledge and tools you need to address today's increasingly complex—and uncompromising—corporate and investment valuation environment.

From the Back Cover

Praise for Damodaran on Valuation

SECOND EDITION

"Aswath Damodaran is simply the best valuation teacher around. If you are interested in the theory or practice of valuation, you should have Damodaran on Valuation on your bookshelf. You can bet that I do."
—Michael J. Mauboussin, Chief Investment Strategist, Legg Mason Capital Management and author of More Than You Know: Finding Financial Wisdom in Unconventional Places

"Damodaran on Valuation is a marvel. The combination of expositional simplicity and conceptual rigor in this book is a rarity in the field of finance; rarer still is the clarity of ideas that simultaneously informs and delights. I do not believe that one can claim to be a serious practitioner—or, for that matter, teacher—of business valuation without mastering the ideas presented in this definitive piece of work."
—Professor Anant K. Sundaram, Faculty Director of Executive Education, Tuck School of Business at Dartmouth College

"Professor Damodaran does an excellent job of incorporating public and private company valuation issues in one volume. It's full of 'how tos' in dealing with difficult technical issues not usually addressed in text books, making it a great discussion tool and resource for both the student and the valuation professional. This is a great addition to any valuation library or training program."
—Scott A. Nammacher, CFA, ASA, Managing Director, Empire Valuation Consultants, LLC

In today's no-room-for-error business environment, the ability to accurately value a company's assets—both tangible and intangible—is essential for a wide variety of professionals, whether they are inside or outside that company. Damodaran on Valuation looks at valuation from the viewpoint of both the internal corporate strategist and the external portfolio manager, addressing issues related to models and techniques for valuing a business and, just as important, explaining their application in either the operation or acquisition of that business.

Damodaran on Valuation explores all aspects of valuation, from the fundamentals of estimating cash flows and discount rates to the principles underlying the use of multiples. In addition, the book addresses what are often left as loose ends in valuation—the value of control and synergy; how best to deal with cash, non-operating assets, and employee stock options when valuing a company; and the consequences of illiquidity, distress, and lack of transparency for asset value.

Whether you are a manager looking to maximize a company's value or an investor looking to beat the market, Damodaran on Valuation will give you the detailed, logical, and sensible answers you need to arrive at an accurate valuation.

See all Editorial Reviews

Product Details

• Hardcover: 696 pages
• Publisher: Wiley; 2 edition (August 4, 2006)
• Language: English
• ISBN-10: 0471751219
• ISBN-13: 978-0471751212
• Product Dimensions: 10 x 7.3 x 1.5 inches
• Shipping Weight: 2.9 pounds (View shipping rates and policies)
• Average Customer Review: 4.1 out of 5 stars  See all reviews (10 customer reviews)
• Amazon Best Sellers Rank: #205,547 in Books (See Top 100 in Books)
  • #28 in Books > Business & Investing > Management & Leadership > Pricing

More About the Author

Aswath Damodaran is a professor of finance and David Margolis teaching fellow at the Stern School of Business at New York University. He teaches the corporate finance and equity valuation courses in the MBA program. He received his MBA and PhD from the University of California at Los Angeles. His research interests lie in valuation, portfolio management, and applied corporate finance. He has been published in the Journal of Financial and Quantitative Analysis, the Journal of Finance, the Journal of Financial Economics, and the Review of Financial Studies. He has written three books on equity valuation (Damodaran on Valuation, Investment Valuation, and The Dark Side of Valuation) and two on corporate finance (Corporate Finance: Theory and Practice, Applied Corporate Finance: A User's Manual). He has coedited a book on investment management with Peter Bernstein (Investment Management) and has written a book on investment philosophies (Investment Philosophies). His newest book on portfolio management is titled Investment Fables and was published in 2004. He was a visiting lecturer at the University of California, Berkeley, from 1984 to 1986, where he received the Earl Cheit Outstanding Teaching Award in 1985. He has been at NYU since 1986 and received the Stern School of Business Excellence in Teaching Award (awarded by the graduating class) in 1988, 1991, 1992, 1999, 2001, and 2007, and was the youngest winner of the University-wide Distinguished Teaching Award (in 1990). He was profiled in Business Week as one of the top 12 business school professors in the United States in 1994.

Customer Reviews

Most Helpful Customer Reviews

16 of 16 people found the following review helpful:

5.0 out of 5 stars Thoroughly covers most aspects of equity valuation, May 22, 2009

By 

jelarv "jelv" (Riverside, CT USA) - See all my reviews

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This review is from: Damodaran on Valuation: Security Analysis for Investment and Corporate Finance (Wiley Finance) (Hardcover)

I saw the author speak at a conference which prompted me to buy the book. His presentation and book nicely merge theory with practice -- too many valuation books are academic and don't deal with the real-life problems. He seems to anticipate the types of real-life challenges you'll get and then tells you how to handle them (about half the book addresses these "loose ends" that aren't always covered in more basic valuation material). I especially like that he's embraced valuation methods beyond DCF (such as P/E and P/B) because purists tend to dismiss these other methods as too crude for serious consideration(in his book he acknowledges that only 10% of Wall Street valuations are done with DCF). His web site is great for practitioners because you can download the raw numbers for thousands of companies and do the valuation steps he highlights in the book.

2 of 2 people found the following review helpful:

5.0 out of 5 stars The bible of valuation and corporate finance, October 10, 2011

By 

J. Lancellotti - See all my reviews
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This review is from: Damodaran on Valuation: Security Analysis for Investment and Corporate Finance (Wiley Finance) (Hardcover)

Damodaran is widely known in the academic/financial arena. The second edition clears up many hiccups in the first edition. There are other books out there that will provide you with most of the information in this book, but not with as much detail and explanation. Also, this book is written very well. It does a great job of keeping the student's interest and not sounding too dry (most of the time). I bought this for one finance class, and have used it as a supplement in nearly all other finance classes. Every finance professor I have asked about Damodaran speaks very highly of him. Although this book material/methodology sticks primarily to the academic world, it still provides the reader with the real-world content and thorough understanding that will be needed in the business world. If you want a truly detailed yet practical analysis of valuation, then this is the book for you.

3 of 8 people found the following review helpful:

5.0 out of 5 stars the best book regarding vauation's methods, September 22, 2008

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T. Gorski "tomi74" (Warsaw, Poland) - See all my reviews
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This review is from: Damodaran on Valuation: Security Analysis for Investment and Corporate Finance (Wiley Finance) (Hardcover)

This is the best book which I have in this field. For me this is an Encyclopedia of fundamental analysis
Something what I can recommend