Written by a gifted teacher and respected valuation authority, Damodaran on Valuation offers systematic examination of the threebasic approaches to valuation - discounted cash-flow valuation,relative valuation, and contingent claim valuation - and thevarious models within these broad categories.

Using numerous real-world examples involving both US andInternational firms, the book illuminates the purpose of eachparticular model, its advantages and limitatations, thestep-by-step process involved in putting the model to work, and thekinds of firms to which it is best applied. Among the toolspresented are designed to:

• Estimate the cost of equity - including the capital asset pricingmodel and arbitrage pricing model
• Estimate growth rates - with coverage of how to arrive at aweighted average of growth rates by blending three separateapproaches
• Value equity - focusing on the Gordon Growth Model and thetwo-and three-stage dividend discount model
• Measure free cash flow to equity - cash flows that are carefullydelineated from the dividends of most firms
• Value firms - including free cash flow to firm models, which areespecially suited to highly leveraged firms
• Estimate the value of assets by looking at the pricing ofcomparable assets - with insight into the use and misuse ofprice/earning and price/book value ratios, and underutilizedprice-to-sales ratios
• Measure the value of assets that share option characteristics -including a comparative look at the classic Black-Scholes andsimpler binomial models

Supported by an optional IBM-compatible disk, which consists ofspreadsheet programs designed to help users apply the modelshighlighted in the book, Damodaran on Valuation providespractitioners involved in securities analysis, portfoliomanagement, M&A, and corporate finance with the knowledge theyneed to value any asset.