RISKVIEWS recently got the material below in an email. This material seems quite educational and also somewhat amusing. The authors keep pointing out the extreme variety of actual detailed approach from any single theory in the academic literature.
For example, the table following shows a plot of Required Equity Premium by publication date of book.
You get a strong impression from reading this book that all of the concepts of modern finance are extremely plastic and/or ill defined in practice.
RISKVIEWS wonders if that is in any way related to the famous Friedman principle that economics models need not be at all realistic. See post Friedman Model.
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Book “Valuation and Common Sense” (3rd edition). May be downloaded for free
The book has been improved in its 3rd edition. Main changes are:
- Tables (with all calculations) and figures are available in excel format in: http://web.iese.edu/PabloFernandez/Book_VaCS/valuation%20CaCS.html
- We have added questions at the end of each chapter.
- 5 new chapters:
Chapters |
Downloadable at: |
32 Shareholder Value Creation: A Definition | http://ssrn.com/abstract=268129 |
33 Shareholder value creators in the S&P 500: 1991 – 2010 | http://ssrn.com/abstract=1759353 |
34 EVA and Cash value added do NOT measure shareholder value creation | http://ssrn.com/abstract=270799 |
35 Several shareholder returns. All-period returns and all-shareholders return | http://ssrn.com/abstract=2358444 |
36 339 questions on valuation and finance | http://ssrn.com/abstract=2357432 |
The book explains the nuances of different valuation methods and provides the reader with the tools for analyzing and valuing any business, no matter how complex. The book has 326 tables, 190 diagrams and more than 180 examples to help the reader. It also has 480 readers’ comments of previous editions.
The book has 36 chapters. Each chapter may be downloaded for free at the following links:
Chapters |
Downloadable at: |
Table of contents, acknowledgments, glossary | http://ssrn.com/abstract=2209089 |
1 Company Valuation Methods | http://ssrn.com/abstract=274973 |
2 Cash Flow is a Fact. Net Income is Just an Opinion | http://ssrn.com/abstract=330540 |
3 Ten Badly Explained Topics in Most Corporate Finance Books | http://ssrn.com/abstract=2044576 |
4 Cash Flow Valuation Methods: Perpetuities, Constant Growth and General Case | http://ssrn.com/abstract=743229 |
5 Valuation Using Multiples: How Do Analysts Reach Their Conclusions? | http://ssrn.com/abstract=274972 |
6 Valuing Companies by Cash Flow Discounting: Ten Methods and Nine Theories | http://ssrn.com/abstract=256987 |
7 Three Residual Income Valuation Methods and Discounted Cash Flow Valuation | http://ssrn.com/abstract=296945 |
8 WACC: Definition, Misconceptions and Errors | http://ssrn.com/abstract=1620871 |
9 Cash Flow Discounting: Fundamental Relationships and Unnecessary Complications | http://ssrn.com/abstract=2117765 |
10 How to Value a Seasonal Company Discounting Cash Flows | http://ssrn.com/abstract=406220 |
11 Optimal Capital Structure: Problems with the Harvard and Damodaran Approaches | http://ssrn.com/abstract=270833 |
12 Equity Premium: Historical, Expected, Required and Implied | http://ssrn.com/abstract=933070 |
13 The Equity Premium in 150 Textbooks | http://ssrn.com/abstract=1473225 |
14 Market Risk Premium Used in 82 Countries in 2012: A Survey with 7,192 Answers | http://ssrn.com/abstract=2084213 |
15 Are Calculated Betas Good for Anything? | http://ssrn.com/abstract=504565 |
16 Beta = 1 Does a Better Job than Calculated Betas | http://ssrn.com/abstract=1406923 |
17 Betas Used by Professors: A Survey with 2,500 Answers | http://ssrn.com/abstract=1407464 |
18 On the Instability of Betas: The Case of Spain | http://ssrn.com/abstract=510146 |
19 Valuation of the Shares after an Expropriation: The Case of ElectraBul | http://ssrn.com/abstract=2191044 |
20 A solution to Valuation of the Shares after an Expropriation: The Case of ElectraBul | http://ssrn.com/abstract=2217604 |
21 Valuation of an Expropriated Company: The Case of YPF and Repsol in Argentina | http://ssrn.com/abstract=2176728 |
22 1,959 valuations of the YPF shares expropriated to Repsol | http://ssrn.com/abstract=2226321 |
23 Internet Valuations: The Case of Terra-Lycos | http://ssrn.com/abstract=265608 |
24 Valuation of Internet-related companies | http://ssrn.com/abstract=265609 |
25 Valuation of Brands and Intellectual Capital | http://ssrn.com/abstract=270688 |
26 Interest rates and company valuation | http://ssrn.com/abstract=2215926 |
27 Price to Earnings ratio, Value to Book ratio and Growth | http://ssrn.com/abstract=2212373 |
28 Dividends and Share Repurchases | http://ssrn.com/abstract=2215739 |
29 How Inflation destroys Value | http://ssrn.com/abstract=2215796 |
30 Valuing Real Options: Frequently Made Errors | http://ssrn.com/abstract=274855 |
31 119 Common Errors in Company Valuations | http://ssrn.com/abstract=1025424 |
32 Shareholder Value Creation: A Definition | http://ssrn.com/abstract=268129 |
33 Shareholder value creators in the S&P 500: 1991 – 2010 | http://ssrn.com/abstract=1759353 |
34 EVA and Cash value added do NOT measure shareholder value creation | http://ssrn.com/abstract=270799 |
35 Several shareholder returns. All-period returns and all-shareholders return | http://ssrn.com/abstract=2358444 |
36 339 questions on valuation and finance | http://ssrn.com/abstract=2357432 |
I would very much appreciate any of your suggestions for improving the book.
Best regards,
Pablo Fernandez