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Valuation: Measuring and Managing the Value of Companies, 4th Edition, University Edition



Valuation: Measuring and Managing the Value of Companies, 4th Edition, University Edition

McKinsey & Company Inc., Tim Koller, Marc Goedhart, David Wessels

ISBN: 978-0-470-89361-6 May 2010 768 Pages


The University Edition of Valuation 4e offers students and professors up-to-date information on valuing companies. It contains all the revisions of the main edition, plus end of chapter questions for the needs of the classroom.
Part One: Foundations of Value.

1. Why Maximize Value?

2. The Value Manager.

3. Fundamental Principles of Value Creation.

4. Do Fundamentals Really Drive the Stock Market?

Part Two: Core Valuation Techniques.

5. Frameworks for Valuation.

6. Thinking about Return on Invested Capital and Growth.

7. Analyzing Historical Performance.

8. Forecasting Performance.

9. Estimating Continuing Value.

10. Estimating the Cost of Capital.

11. Calculating and Interpreting Results.

12. Using Multiples for Valuation.

Part Three: Making Value Happen.

13. Performance Measurement.

14. Performance Management.

15. Creating Value through Mergers and Acquisitions.

16. Creating Value through Divestitures.

17. Capital Structure.

18. Investor Communications.

Part Four: Advanced Valuation Issues.

19. Valuing Multibusiness Companies.

20. Valuing Flexibility.

21. Cross-Border Valuation.

22. Valuation in Emerging Markets.

23. Valuing High-Growth Companies.

24. Valuing Cyclical Companies.

25. Valuing Financial Institutions.

Appendix A: Economic Profit and the Key Value Driver Formula.

Appendix B: Discounted Economic Profit Equals Discounted Free Cash Flow.

Appendix C: Adjusted Present Value Equals Discounted Free Cash Flow.

Appendix D: Levering and Unlevering the Cost of Equity.

Appendix E: Leverage and the Price-Earnings Multiple.


INCLUDES ALL UPDATED INFORMATION FROM VALUATION 4E. This long-awaited new edition of the best-selling book on valuation provides new information on the strategic advantages of value-based management amidst changing business conditions.

OFFERS STUDENTS AND PROFESSORS TAILORED INFORMATION FOR USE IN THE CLASSROOM including end of chapter questions, an Instructor's Manual for professors, and complimentary use of excel spreadsheets.

PROVIDES DETAILED INSTRUCTION FOR LEARNING AND APPLICATION. Valuation 4e has case studies showing how techniques and principles are applied, and gives instructions on real options valuation.

PROVIDES RELIABLE VALUATION STRATEGIES: Gives strategies for multi-business valuation, and valuation for corporate restructuring, mergers, acquisitions. International comparisons of the cost of capital, differences in accounting procedures, and how valuation works in different countries.

  • Valuation, Fourth Edition is filled with expert guidance that students have come to trust.
  • Contains a solid framework for valuation:
    • Analyzing historical performance, including reorganizing a company's financial statements to reflect economic rather than accounting performance
    • Forecasting performance, with emphasis on not just the mechanics of forecasting but also how to think about a company's future economics
    • Estimating the cost of capital with practical tips that aren't found in textbooks
    • Interpreting the results of a valuation in light of a company's competitive situation
    • Linking a company's valuation multiples to the core drivers of its performance. 
  • Extensive discussion on the complexity of measuring corporate performance to assess historical financial results properly and to gain insight into a company's ability to create value in the future (its corporate "health").
  • Complementary chapter advises managers how to run companies to create long-term value, and a new chapter explores ways to improve communication with financial markets.