Valuation : The Market Approach

Format:

Book

Author/Creator:

Bernström, Seth.

Series:

Wiley finance series.

THEi Wiley ebooks.

The Wiley Finance Series

THEi Wiley ebooks

Language:

English

Subjects (All):

Corporations--Valuation.

Investment analysis.

Stocks--Prices.

Local Subjects:

Corporations--Valuation.

Investment analysis.

Stocks--Prices.

Physical Description:

1 online resource (216 p.)

Edition:

1st ed.

Place of Publication:

Hoboken : Wiley, 2014.

Language Note:

English

System Details:

Access using campus network via VPN at home (THEi Users Only).

Summary:

The market approach aims to establish the value of a company based on how similar firms are priced on the stock exchange or through company transactions. Using the market approach, price-related indicators such as price to earnings, sales and book values are utilised. An ever-present problem however, is that different valuation multiples and valuation methodologies tend to provide the analyst with contradictory outputs. The solution to this problem so far has been to claim that the market approach is more art than science, thus providing the analyst with the freedom to alter the multiples a

Contents:

Cover; Title Page; Copyright Page; Contents; Acknowledgments; Introduction; 1 Corporate Valuation; 1.1 The discounted cash flow approach; 1.2 The market approach; 1.3 The net asset approach; 2 What Value?; 2.1 Standard of values; 2.2 Marketability and control; 2.2.1 Marketability (liquidity); 2.2.2 Control; 2.2.3 Adjusting for marketability and control; 3 Exchange-traded Shares vs. Transactions; 3.1 Exchange-traded shares; 3.2 Transactions; 4 How to Put the Peer Group Together; 4.1 The selection process; 4.1.1 Geography; 4.1.2 Business model; 4.2 How many comparables?

4.3 Analyzing the history 5 Market Value of Equity vs. Market Value of Operating/Invested Capital; 5.1 Market value of equity; 5.2 Market value of operating/invested capital; 6 The Value Multiples; 6.1 EV Multiples; 6.2 P Multiples; 6.3 Other details to consider; 7 The Value Drivers; 7.1 Primary value drivers of the EV multiples; 7.2 Primary value drivers of the P multiples; 7.3 Assumptions regarding value drivers; 8 Applying the Market Approach in Practice; 8.1 The case study; 8.1.1 EV/Sales; 8.1.2 EV/EBIT; 8.1.3 EV/BEV; 8.1.4 Some closing remarks; 8.2 Risk

8.2.1 The discounted cash flow approach (DCF)8.2.2 Forecasted cash flows; 8.2.3 Cost of capital (discount rate); 8.2.4 Cost of equity (Ke); 8.2.5 The capital asset pricing model (CAPM); 8.2.6 Adjusted CAPM; 8.2.7 Cost of debt (Kd); 8.2.8 Capital structure; 8.2.9 Weighted average cost of capital (WACC); 8.3 Summary of calculated values; 8.3.1 EV Multiples; 8.3.2 Price multiples - short tuning; 8.3.3 Concluding remarks; 9 Using the Market Approach for Reconciliation; 9.1 The discounted cash flow value of Engineering Corp; 9.1.1 EV/Sales; 9.1.2 EV/EBIT; 9.1.3 EV/BEV; 9.1.4 Some closing remarks

10 Forward-looking Value Multiples11 Summary and Concluding Remarks; 12 Epilog; Appendix: Brief Derivation of the Respective Value Multiple's Individual Value Drivers; Index

Notes:

Description based upon print version of record.

ISBN:

9781118903889

1118903889

9781118903896

1118903897