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Business Valuation: An Integrated Theory, 2nd Edition



Business Valuation: An Integrated Theory, 2nd Edition

Z. Christopher Mercer, Travis W. Harms

ISBN: 978-0-470-17866-9 January 2008 320 Pages

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Praise for Business Valuation, Second Edition

"The Second Edition of Business Valuation: An Integrated Theory manages to present the theoretical analysis of valuation from the first edition and expand on that discussion by providing additional guidance on implementing the relevant valuation theories, notably in its expanded discussion of the Quantitative Marketability Discount Model."
-Dr. David Tabak
NERA Economic Consulting

Your Essential Valuations Reference

Whether you are an accountant, auditor, financial planner, or attorney, Business Valuation: An Integrated Theory, Second Edition enables you to understand and correctly apply fundamental valuation concepts. Thoroughly revised and expanded, the Second Edition demystifies modern valuation theory, bringing together various valuation concepts to reveal a comprehensive picture of business valuation.

With the implementation of new accounting pronouncements mandating the recognition of numerous assets and liabilities at fair value, it has become critical for CPAs charged with auditing financial statements to understand valuation concepts.

With thoughtful and balanced treatment of both theory and application, this essential guide reveals:

The "GRAPES of Value"-Growth, Risk and Reward, Alternative Investments, Present Value, Expectations, and Sanity

The relationship between the Gordon Model and the discounted cash flow model of valuation

The basis for commonly applied, but commonly misunderstood valuation premiums and discounts

A practical perspective on the analysis of potential business acquisitions

Grounded in the real world of market participants, Business Valuation, Second Edition addresses your need to understand business valuation, providing a means of articulating valuation concepts to help you negotiate value-enhancing transactions.

If you want to get back to valuation basics, this useful reference will become your guide to defining the various levels of value and developing a better understanding of business appraisal reports.
Chapter 1. Discounted Cash Flow and The Gordon Model - The Very Basics of Value.

Chapter 2. The GRAPES of Value.

Chapter 3. The Integrated Theory of Business Valuation.

Chapter 4: Adjustments to the Income Statements: Normalizing and Control Adjustments.

Chapter 5. Fundamental Adjustments to Market Capitalization Rates.

Chapter 6. Developing Appropriate Discount Rates.

Chapter 7. Introduction to the QMDM: The Shareholder Level of Value.

Chapter 8. The QMDM Assumptions in Detail.

Chapter 9: Applying the QMDM.

Chapter 10: Application of the Integrated Theory to Tax Pass-Through Entities.


  • New introductory chapter that “eases the reader into the book
  • Revision includes review of latest restricted stock and pre-IPO studies
  • Updated Quantitative Marketability Discount Model (QMDM) chapter
  • New S Corporation valuation chapter
  • Discussion of the latest development in Business Valuation practice in light of “the new integrated theory”