Equity Asset Valuation

by John D. Stowe (University of Missouri-Columbia ); Thomas R. Robinson; Jerald E. Pinto (TRM Services ); Dennis W. McLeavey (AIMO )

• ISBN13: 9780470052822
• ISBN10: 0470052821
• Format: Hardcover
• Copyright: 2007-01-01
• Publisher: WILEY

Summary

-David Blackwell, Head and RepublicBank/James W. Aston Professor of Finance, Mays Business School, Texas A&M University

Author Biography

JOHN D. STOWE , PHD, CFA, is Head of Curriculum Development at CFA Institute. Prior to joining CFA Institute, he was a professor of finance and associate dean at the University of Missouri-Columbia, where he taught investments and corporate finance. Stowe has won several teaching awards and has published frequently in academic and professional journals in finance. He is also coauthor of a college-level textbook in corporate finance. Stowe earned his BA from Centenary College and his PhD in economics from the University of Houston. He obtained his CFA charter in 1995.

THOMAS R. ROBINSON, PHD, CFA, is Head, Educational Content, in the Education Division of CFA Institute. Previously, he was an Associate Professor of Accounting and Director of the Master of Professional Accounting program at the University of Miami. Robinson has a BA in economics from the University of Pennsylvania and a master's and PhD in accounting from Case Western Reserve University. He is a Certified Public Accountant (Ohio), Certified Financial Planner® (CFP®) certificant, and Chartered Financial Analyst® (CFA®) charterholder. Prior to joining the University of Miami, Robinson practiced public accounting and financial planning for ten years, and also served as a consultant in the areas of financial statement analysis and valuation.

JERALD E. PINTO, PHD, CFA, is Director of Curriculum Development at  CFA Institute. Before coming to CFA Institute in 2002, he was a consultant to corporations, foundations, and partnerships in investment planning, portfolio analysis, and quantitative analysis. He has also worked in the investment and banking industries in New York City and taught finance at New York University's Stern School of Business. He holds an MBA from Baruch College and a PhD in finance from the Stern School. Pinto obtained his CFA charter in 1992.

DENNIS W. MCLEAVEY, CFA, is Head of Professional Development Products at CFA Institute. During his twenty-five year academic career, he has taught at the University of Western Ontario, the University of Connecticut, the University of Rhode Island (where he founded a student-managed fund), and Babson College. McLeavey completed a doctorate in production management and industrial engineering at Indiana University in 1972 and obtained his CFA charter in 1990, and began grading CFA examinations in 1995.

Table of Contents

Foreword.

Preface.

Acknowledgements.

About the Authors.

Chapter 1. The Equity Valuation Process.

Learning Outcomes.

Introduction.

The Valuation Process.

Understanding the Business.Forecasting Company Performance.Selecting the Appropriate Valuation Model.

Performing Valuation: The Analyst's Role and Responsibilities.

Communicationg Valuation Results: The Research Report.

Summary.

Chapter 2. Discounted Dividend Valuation.

Learning Outcomes.

Introduction.

Present Value Models.

The Dividend Discount Model.

The Gordon Growth Model.

Multistage Dividend Discount Models.

The Financial Determinants of Growth Rates.

Summary.

Chapter 3. Free Cash Flow.

Learning Outcomes.

Introduction.

FCFF and FCFE Valuation Approaches.

Forecasting Free Cash Flow.

Free Cash Flow Model Variations.

Non-Operating Assets and Firm Value.

Summary.

Chapter 4. Market-Based Valuation: Price Multiples.

Learning Outcomes.

Introduction.

Price Multiples in Valuation.

Price to Earnings.

Price to Book Value.

Price to Sales.

Price to Cash Flow.

Enterprise Value to EBITDA.

Dividend Yield.

International Valuation Considerations.

Momentum Valuation Indicators.

Valuation Indicators and Investment Management.

Summary.

Chapter 5. Residual Income Valuation.

Learning Outcomes.

Introduction.

Residual Income.

The Residual Income Valuation Model.

Accounting and International Considerations.

Single-Stage Residual Income Valuation.

Multi-Stage Residual Income Valuation.

Index