INSEAD Library

Includes bibliographical references

Digitized

The Valuation of a Company and its Shares Contents Chapter 1 : Introduction 1.1 What is Investment? 1.2 What is Equity? 1.3 What is Analysis? Summary Questions Chapter 2: Basics of Valuation 2.1 Various Value Definitions 2.2 Relationship Between Price and Value 2.3 What Moves Market Price? 2.4 What is Value? 2.5 Valuation Models 2.6 Why Valuation? 2.7 Valuation Process 2.8 Valuation and Efficient Market Hypothesis Summary Questions Chapter 3: Basics of Analysis 3.1 Fundamental Analysis 3.2 Process of Fundamental Analysis 3.3 Top Down Approach of Fundamental Analysis 3.4 Bottom-Up Approach in Fundamental Analysis 3.5 Economic Analysis 3.6 Industry Analysis 3.7 Company Analysis 3.8 Research Report Summary Questions Chapter 4: Discounted Cash Flow Models ­ Defining Cash Flows 4.1 What are Discounted Cash Flow (DCF) Models 4.2 Defining Cash Flows to the Shareholders 4.3 Dividends as Cash Flows in Valuation 4.4 Concept of Free Cash Flows 4.5 Free Cash Flow for the Firm (FCFF) 4.6 Free Cash Flows to Equity (FCFE) 4.7 Residual Income Summary Questions Chapter 5: Estimating Cost of Capital 5.1 What is Discount Rate 5.2 Cost of Debt 5.3 Cost of Equity 5.4 Weighted Average Cost of capital (WACC) Summary Questions 1 3 4 7 9 10 11 13 14 18 20 20 22 23 24 26 28 31 33 33 33 35 36 39 45 46 48 50 51 53 53 53 54 62 64 66 69 71 75 77 77 81 87 89 90 Chapter 6: Dividend Discount Models (DDM) 6.1 What are dividend discount models? 6.2 Dividends and Growth Stages of a Company 6.3 Forecasting. Dividends 6.4 Valuation of a firm in No-growth Stage 6.5 Valuation of a firm in Normal. Growth Stage 6.6 Analysis of Normal Growth rate 'g' 6.7 Sustainable Growth Equation 6.8 Managing Growth 6.9 Single Stage DDM Revisited 6.10 Two-Stage Dividend Discount Model 6.11 H-Model 6.12 Three-Stage Dividend Discount Model 6.13 When to Use Dividend Discount Models 6.14 Applying DDM to Non-dividend Paying Companies 6.15 Dealing with Negative and Cyclical Earnings 6.16 Using DDM to infer Market Expectations Summary Questions Chapter 7: Free Cash Flow Models 7.1 What are Free cash Flows 7.2 Free cash Flow to Equity (FCFE) Models 7.3 Free cash Flow For Firm (FCFF) Models Summary Questions Chapter 8: Residual Income Models 8.1 What is Residual Income 8.2 Calculation of residual Income 8.3 Calculation of Market value Using Residual Income 8.4 General Residual Income Model 8.5 Calculation of Book Value Over Time in RI Model 8.6 Value Recognition in Residual Income Models 8.7 Impact of Terminal Value on Value from RI Model 8.8 Advantages of Residual Income Model 8.9 When is Residual Income Model Used? 8.10 General Residual Income Models 8.11 Adjustment of Accounting Data 8.12 Economic Value Added (EVA) Summary Questions Chapter 9: Relative Valuation Models 9.1 Price Multiples 9.2 Earnings Multiple Model or P/E Model 9.3 Price to Book Value Model (P/BV Model) 9.4 Price to Sales Model (P/S Model) 9.5 Price to Cash Flow Multiples (P/CF Model) 9.6 Enterprise Value to EBITDA (EV/EBITDA Model) 9.7 Dividend Yield Summary Questions Further Readings 93 95 95 96 96 99 101 106 107 110 112 119 122 129 129 131 133 135 137 145 147 147 164 179 182 193 195 195 196 198 199 200 202 202 202 203 209 211 213 215 219 221 224 234 241 246 249 250 252 254 259