July 2009
Intermediate to advanced
600 pages
19h 50m
English
book
The Dark Side of Valuation: Valuing Young, Distressed, and Complex Businesses, Second Edition
by Aswath Damodaran
Content preview from The Dark Side of Valuation: Valuing Young, Distressed, and Complex Businesses, Second Edition
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What Do Intrinsic Valuation Models Tell Us?
All the approaches described in this chapter try to estimate the intrinsic value of an asset or business. However, it is important that we understand exactly what we are doing in the process. We are estimating what an asset or business is worth, given its cash flows and the risk in those cash flows. To the extent that the value is dependent on the assumptions we make about cash flows, growth, and risk, it represents what we think the intrinsic value is at any point in time.
So, what if the intrinsic value we derive is very different from the market price? Several explanations are possible. One is that we have made erroneous or unrealistic assumptions about a company’s future growth potential or riskiness. ...
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I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.