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Corporate valuation [electronic resource] : measuring the value of companies in turbulent times / Mario Massari, Gianfranco Gianfrate, Laura Zanetti

Author
Massari, Mario
Published
Hoboken : Wiley, [2016]
Physical Description
xv, 496 pages : illustrations ; 23 cm.
Additional Creators
Gianfrate, Gianfranco and Zanetti, Laura
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Contents
Machine generated contents note: Preface Acknowledgments About the Authors Chapter 1: Introduction 1.1 Fundamental Skills in Company Valuation 1.2 Valuation Methods: An Overview 1.3 The Time Value of Money 1.4 Uncertainty in Company Valuations 1.5 Uncertainty and Managerial Flexibility 1.6 Relationship between Value and Uncertainty Chapter 2: Business Forecasting for Valuation 2.1 Introduction 2.2 Key phases of the business plan elaboration 2.3 What drives the preparation of a business plan 2.4 The main methodological issues Chapter 3: Scenario Analysis 3.1 Introduction 3.2 What is scenario analysis? 3.3 Difference between scenario and sensitivity analysis 3.4 When to perform scenario analysis 3.5 Worst and best and what happens next 3.6 Multi-Scenario Analysis 3.7 Pros and Cons 3.8 How to perform scenario analysis in Excel 3.9 Conclusions Chapter 4: Monte Carlo Valuation 4.1 Introducing Monte Carlo Techniques 4.2 Monte Carlo and Corporate Valuation 4.3 A STEP BY STEP PROCEDURE 4.4. Case study: DuEmme valuation 4.5. A step by step guide using Excel and Crystal Ball Chapter 5: Determining Cash Flows for Company Valuation 5.1 Introduction 5.2 Reorganization of the Balance Sheet 5.3 Relationship Between a Company's Balance Sheet and Income Statement 5.4 From the Economic to the Financial Standpoint 5.5 Cash Flow Definitions and Valuation Models 5.6 Business Plan and Cash Flow Projections Chapter 6: Choosing the Valuation Standpoint 6.1 Debt and Value 6.2 First Problem: The Relationship between Leverage and Value 6.3 Second Problem: alternative valuation techniques when debt benefits from a fiscal advantage 6.4 Third problem: the choice between an asset-side vs. an equity-side perspective 6.5 How to go from a company's asset value to its equity value Chapter 7: Leverage and Value in Growth Scenarios 7.1 Growth, Leverage, and Value 7.2 Nominal and Real Discounting 7.3 Problems with the discount of tax benefit 7.4 Cost of Capital Formulas in Growth Scenarios 7.5 The WACC: some remarks 7.6 The Real Dimension of Tax Benefits Appendix 7.1: Derivation of the Formulas to Calculate the Cost of Capital Appendix 7.2 Chapter 8: Estimating the Cost of Capital 8.1 Defining the Opportunity Cost of Capital 8.2 A Few Comments on Risk 8.3 Practical Approaches to Estimate Keu 88.4 The Approach Based on Historical Returns 8.5 Analysis of Stock Returns 8.6 Analysis of Accounting Returns 8.7 Estimating Expected Returns from Current Stock Prices 8.8 Models Based on Returns' Sensitivity to Risk Factors 8.9 The Capital Asset Pricing Model Appendix 8.1: CAPM with personal taxes Chapter 9: Cash Flow Profiles and Valuation Procedures 9.1 From Business models to Cash Flow models 9.2 Cash Flow Profiles of Business Units vs Whole Entity 9.3 Examples of Cash Flow Profiles 9.4 Problems with the Identification of Cash Flow Models 9.5 Cash Flow Models In the Case of Restructuring 9.6 Debt Profile Analysis 9.2 Debt Profile beyond the Plan Horizon Forecast 9.7 The Valuation of Tax Advantages: Different Alternatives Some Concluding Remarks 9.8 From Cash Flow Profiles to Valuation: Synthetic and Analytical Procedures 9.9 The Standard Procedure Chapter 10: A Concise Cash Flow Model 10.1 Discussion of Formula-based Methods 10.2 The capitalization of a normalized monetary flow 10.3 The Perpetual Growth Formula 10.4 Formulas for Limited and Variable (Multi-Stage) Growth 10.5 Conclusions Chapter 11: Discounting Explicit Cash Flow and Terminal Value (Explicit Method) 11.1 Explicit Projections 11.2 Estimation of the Terminal Value 11.3 Evaluation of "Gas Supply Co." Chapter 12: Multiples: an Overview 12.1 Preliminary Remarks 12.2 The Theory of Multiples: Basic Elements 12.3 The Price Earnings Ratio (P/E) 12.4 The EV/EBIT and EV/EBITDA Multiples 12.5 Other Multiples 12.6 Multiples and Leverage 12.7 Unlevered Multiples 12.8 Multiples and Growth 12.9 Relationship between Multiples and Growth 12.10 THE PEG RATIO 12.11 The Value Maps Appendix 12.1: P/E with Growth Chapter 13: Multiples in Practice 13.1 A Framework for the Use of Stock Market Multiples 13.2 The Significance of Multiples 13.3 The Comparability of Multiples 13.4 Multiples Choice in Valuation Processes 13.5 The Estimation of "Exit" Multiples 13.6 An Analysis of Deal Multiples 10.7 A Valuation Process Carried Out Using The Comparable Approach: The "Wine CO." Transaction Appendix 13.1 Capital Increases and the P/E Ratio Chapter 14: The Acquisition Value 14.1 Acquisition Value Plays a Key Role 14.2 Definitions of Value: An Overview 14.3 The Value Created by an Acquisition 14.4 The Value-Components Model 14.5 Further Considerations in Valuing Acquisitions 14.6 Acquisition Value of "Plastic Materials Co." 14.7 The Acquisition Value of Controlling Interests 14.8 Other Determinants of Control Premium 14.9 Acquisition Value in a Mandatory Tender Offer 14.10 Maximum and Minimum Exchange Ratios in Mergers 14.11 Exchange Ratio and Third Party Protection Appendix 14.1: Other Value Definitions Appendix 14.2: Notions of Value Developed by Italian Scholars Chapter 15: Value and prices in the market for corporate control 15.1 Price Formation in the Market for Control 15.2 Different Kinds of Benefits Arising from Acquisitions 12.3 From the Pricing Model to the Fair Market Value 15.4 Fair Market Value Estimated Adjusting Stand Alone Cash Flows 15.5 "Premiums" and "Discounts" in Valuation 15.6 The Most Common Premiums and Discounts 15.7 Value-Levels and Value Expressed by Stock Prices 15.8 "Estimating "Control Premiums" 15.9 Estimating Acquisition Premiums 15.10 Acquisition and Control Premiums in a Perfect World 15.10 Estimating Controlling Interest: An Example 15.11 Minority Discount 15.12 Discount for the Lack of Marketability 15.13 Definitions of Value and Estimation Procedures Chapter 16: Valuation Considerations on Rights Issues 16.1 Introduction to Rights Issues 16.2 Setting the subscription price 16.3 Value of pre-emptive rights 16.4 Conclusions Index.
Summary
"Risk consideration is central to more accurate post-crisis valuation Corporate Valuation presents the most up-to-date tools and techniques for more accurate valuation in a highly volatile, globalized, and risky business environment. This insightful guide takes a multidisciplinary approach, considering both accounting and financial principles, with a practical focus that uses case studies and numerical examples to illustrate major concepts. Readers are walked through a map of the valuation approaches proven most effective post-crisis, with explicit guidance toward implementation and enhancement using advanced tools, while exploring new models, techniques, and perspectives on the new meaning of value. Risk centrality and scenario analysis are major themes among the techniques covered, and the companion website provides relevant spreadsheets, models, and instructor materials. Business is now done in a faster, more diverse, more interconnected environment, making valuation an increasingly more complex endeavor. New types of risks and competition are shaping operations and finance, redefining the importance of managing uncertainty as the key to success. This book brings that perspective to bear in valuation, providing new insight, new models, and practical techniques for the modern finance industry. Gain a new understanding of the idea of "value," from both accounting and financial perspectives Learn new valuation models and techniques, including scenario-based valuation, the Monte Carlo analysis, and other advanced tools Understand valuation multiples as adjusted for risk and cycle, and the decomposition of deal multiples Examine the approach to valuation for rights issues and hybrid securities, and more Traditional valuation models are inaccurate in that they hinge on the idea of ensured success and only minor adjustments to forecasts. These rules no longer apply, and accurate valuation demands a shift in the paradigm. Corporate Valuation describes that shift, and how it translates to more accurate methods"--
"Corporate Valuation offers investment bankers and equity analysts many new insights. First, the book provides a more modern and thorough analysis of the idea of value"--
Subject(s)
Genre(s)
ISBN
9781119003335 (hardback)
9781119003359 (Adobe PDF)
9781119003342 (epub)
Note
Includes index.
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