Value: The Four Cornerstones of Corporate Finance

Acknowledgments

In 1990, McKinsey first published Valuation: Measuring and Managing the Value of Companies. After having sold more than 500,000 copies in 10 languages, the fifth edition of Valuation was released in mid-2010.

We are greatly indebted to Valuation's authors, because their success led to the formulation of this book. Tom Copeland and Jack Murrin were co-authors of Valuation's first three editions, while Marc Goedhart and David Wessels co-authored the fourth and fifth editions. Without their insight and industry, this book (Value) would not exist today, so we are eternally grateful for these fine colleagues.

We definitely couldn't have created this work without our clients, who hone our thoughts and insights as they interact with us. They provide the reality against which we constantly test our assumptions and ideas, and their experience is the very matter that we combine with academic theory to ferret out the truth.

The intellectual origins of this book lie in the present value method of capital budgeting and in the valuation approach developed by Professors Merton Miller and Franco Modigliani in their 1961 Journal of Business article, “Dividend Policy, Growth and the Valuation of Shares.” Others have gone far to popularize their approach. In particular, Professor Alfred Rappaport of Northwestern University and Joel Stern of Stern Stewart & Company were among the first to extend the Miller-Modigliani enterprise valuation formula to real-world applications.

Ennius ...