The Definitive Guide to Valuing Hard-to-Value Companies: Fully Revised for Today's Financial Markets Valuing money-making companies that have long histories and established business models is straightforward. It is when you encounter difficult-to-value companies that you feel the urge to go over to the dark side of valuation--where you abandon first principles and create new metrics. Aswath Damodaran looks at a range of these companies, from start-ups in new businesses to distressed companies, from banks facing regulatory turmoil to commodity firms, and from emerging market upstarts to multinationals that spread across geographies and businesses. With each grouping, he helps you examine the call of the dark side and its practices and frameworks to value these firms.
To answer these questions, Aswath looks at companies across the life cycle and in different markets, from Uber and Shake Shack at one end of the spectrum to Vale, Royal Dutch, and United Technologies at the other end.
In the process, you learn how to
Deal with "abnormally low" and negative risk-free rates in valuation
Adapt to dynamic and changing risk premiums
Value young companies that are disrupting existing businesses
Analyze commodity and cyclical companies across cycles
Value a company as the sum of its parts or as an aggregation of its users/subscribers and customers
Determine the difference between pricing and valuation, and why some investments can only be priced
Aswath Damodaran is Professor of Finance at the Stern School of Business at New York University. He teaches the corporate finance and equity valuation courses in the MBA program. He received his MBA and PhD from the University of California at Los Angeles. He has written several books on corporate finance, valuation, and portfolio management. He has been at NYU since 1986 and has received the Stern School of Business Excellence in Teaching Award (awarded by the graduating class) eight times. He was profiled in BusinessWeek as one of the top twelve business school professors in the United States in 1994 and was chosen the most popular business school professor in 2012.
1 The Dark Side of Valuation Enlightenment: The Tools Intrinsic Valuation Probabilistic Valuation: Scenario Analysis, Decision Trees & Simulations Relative Valuation Option Valuation The Dark Side of Macro Inputs A Shaky Base: A Risky Risk free Rate Risky Ventures: Assessing the Price of Risk Macro Matters: The Real Economy The Dark Side across the Life Cycle Baby Steps - Valuing start-ups Off to School - Valuing young companies Shooting Stars - Valuing growth companies Not so staid - Valuing mature companies The inevitable end - Valuing companies in distress and decline The Dark Side across company types Ups and Down: Valuing Cyclical and Commodity companies Mark to Market: Valuing Financial Service companies Invisible Investments: Valuing firms with intangible assets Volatility Rules: Valuing Emerging Market companies The Octopus: Valuing Multi-business, global companies Puzzle Palace: Valuing the Unusual The Finale Lighting the Way: Vanquishing the Dark Side