- estimate cash flows
- calculate discount rates
- adjust for accounting distortions
- take uncertainty into consideration
Written for investment professionals, corporate managers and anyone interested in developing their understanding of this key area, Equity Valuation: Models from the Leading Investment Banks will arm readers with the latest thinking and depth of knowledge necessary to make the right decisions in their valuation methodologies.
Part I: Discounted Cash Flow (DCF) Models (Jan Viebig and Thorsten Poddig).
2. The Fundamental Value of Stocks and Bonds.
3. Discounted Cash Flow Models: The Main Input Factors.
Part II: Monte Carlo Free Cash Flow to the Firm (MC-FCFF) Models (Deutsche Bank/DWS) (Jan Viebig and Thorsten Poddig).
5. Standard FCFF Model.
6. Monte Carlo FCFF Models.
Part III: Beyond Earnings: A User's Guide to Excess Return Models and the HOLT CFROI® Framework (Tom Larsen and David Holland).
8. From Accounting to Economics - Part I.
9. From Economics to Valuation - Part I.
10. Where Does Accounting Go Wrong?
11. From Accounting to Economics: CFROI.
12. From Accounting to Economics: Economic Profit.
13. From Economics to Valuation - Part II.
Appendix1. Vodafone Financial Statements and Relevant Notes for CFROI Calculation.
Appendix 2: Additional Notes from Vodafone Annual Report for EP Calculation.
Part IV: Morgan Stanley ModelWare's Approach to Intrinsic Value: Focusing on Risk-Reward Trade-Offs (Trevor S. Harris, Juliet Estridge and Doron Nissim).
15. Linking Fundamental Analysis to the Inputs of the Valuation Model.
16. Our Valuation Framework.
17. Linking Business Activity to Intrinsic Value Approach: The ModelWare Profitability Tree.
18. ModelWare's Instrinsic Value Approach.
19. Treatment of Key Inputs.
20. The Cost of Capital.
21. Summary and Conclusions.
Part V: UBS VCAM and EGW Regression-based Valuation (David Bianco).
22. Introducing "EGQ" - Where Intrinsic Methods and Empirical Techniques Meet.
23. A Quick Guide to DCF and Economic Profit Analysis.
24. Regression-based Valuation.
25. UBS Economic Growth Quotient.
26. UBS EGQ Regression Valuation.
27. Understanding Regressions.
28. Appendix Discussions.
Part VI: Leverage Buyout (LBO) Models (Jan Viebig, Daniel Stillit and Thorsten Poddig).
30. Leveraged Buyouts.
31. IRRs and the Structure of LBO Models.
32. Assumptions of LBO Models.
33. Example: Continental AG.
34. A Word of Caution.
Part VII: Valuation 101: Approaches and Alternatives (Aswath Damodaran).
36. Overview of Valuation.
37. Discounted Cash Flow Valuation.
38. Liquidation and Accounting Valuation.
39. Relative Valuation.
40. Real Option valuation.
41. Closing Thoughts on Value Enhancement.
Part VIII: Final Thoughts on Valuation (Armin Varmaz, Thorsten Poddig and Jan Viebig).
43. Valuation in Theory: The Valuation of a Single Asset.
44. Outlook: The Multi-asset Valuation and Allocation Case.