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Analysis of Equity Investments: Valuation
by: John D. Stowe, Thomas R. Robinson, Jerald E. Pinto, Dennis W. McLeavey

Used Price: $34.00
Third Party New Price: $56.73

Binding: Hardcover
EAN: 9780935015768
ISBN: 0935015760
Label: Assn for Investment Management &
Manufacturer: Assn for Investment Management &
Number Of Pages: 318
Publication Date: August 01, 2002
Publisher: Assn for Investment Management &
Sales Rank: 52754
Studio: Assn for Investment Management &

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Product Description:
The treatment in Analysis of Equity Investments: Valuation is intended to communicate a practical equity valuation process for the investment generalist. Unlike many alternative works, the book integrates accounting and finance concepts, providing the evenness of subject matter treatment, consistency of notation, and continuity of topic coverage so critical to the learning process.

The book does not simply deliver a collection of valuation models, but challenges the reader to determine which models are most appropriate for specific companies and situations. This book contains many real-life worked examples and problems with complete solutions. In addition, the examples and problems reflect the global investment community.

Chapter 1 describes how an analyst approaches the equity valuation process.

Chapter 2 begins with the basic John Burr Williams dividend discount model (DDM) and discusses the derivation of the required rate of return within the context of Markowitz and Sharpe’s modern portfolio theory (the capital asset pricing model).

Chapter 3 shows how the DDM approach can be modified to a free cash flow (FCF) approach. Considerable attention is devoted to forecasting FCF and its relationship both to the firm (FCFF) and to equity (FCFE).

Chapter 4 takes a somewhat different approach to equity valuation by using Graham and Dodd–type concepts of earning power and associated 'Market Multiples.' The most familiar of these is probably the price-to-earnings ratio, but there is also merit to using price to book value, price to sales, price to cash flow, enterprise value to EBITDA, and price to dividends.

In Chapter 5, the authors present residual income models. The authors demonstrate how to calculate residual income and discuss the accounting adjustments necessary to estimate single-stage and multistage residual income valuation.

Customer Reviews

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Rating:

- Must-have reference for students!
As an undergraduate Finance student prepping for the C.F.A. exam, I must say this is the best textbook I have seen on valuing equities. Clearly written by experienced C.F.A.'s, this guide to valuation has been more helpful and easier to use than any of the textbooks used in my finance classes.

It is well organized, making it easy to read as a single pass-through and to use as a reference for specific topics. The best thing about its writing style is the plentiful examples. Pages of practice problems and step-by-step demonstrations leave the reader with no misunderstanding of the material.

Some important topics covered include methods of valuation (discounted dividend, discounted cash flow, multiples, and the less popular residual income), methods of obtaining discount rates/required return, and other helpful information such as how analyst research reports are structured. Each topic ... Read More

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