Chapter 1  Chapter 2  Chapter 3  Chapter 4  Chapter 5  Chapter 6 
Chapter 7  Chapter 8  Chapter 9  Chapter 10  Chapter 11  Chapter 12 
Chapter 13  Chapter 14  Chapter 15  Chapter 16  Chapter 17  Chapter 18 
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Illustrations  Illustration
2.1: Estimating CAPM risk parameters for Disney

Data Sets  histretSP.xls:
Summarizes historical returns on stocks, T.Bonds and T.Bills going
back to 1928. ratings.xls: This dataset includes default spreads for bonds in different ratings classes. ctryprem.xls: Contains the updated ratings for countries and the risk premiums associated with each. histimpl.xls: Shows the inputs used to calculate the premium in each year for the U.S. market. betas.xls: Updated betas and unlevered betas by business sector in the United States. spearn.xls: Earnings changes, by year, for the S&P 500 going back to 1960. wacc.xls: Costs of debt, costs of equity, debt ratios and costs of capital, by industry group, for firms in the United States. 
Spreadsheets  implprem.xls:
This spreadsheet allows you to estimate the implied equity premium
in a market. accbeta.xls: Estimate the accounting beta on a division or firm. risk.xls: Run a regression of stock returns against market returns and estimate risk parameters. levbeta.xls: Estimate the unlevered beta for a firm and compute the betas as a function of the leverage of the firm. ratings.xls: This spreadsheet allows you to estimate the synthetic rating and cost of debt for any firm. oplease.xls: This spreadsheet allows you to convert operating lease expenses into debt. wacccalc.xls: This spreadsheet allows you to convert book values of debt into market values. 
Readings 

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Illustrations  Illustration 4.1: Length of Growth Period Illustration 4.2: Differences between Arithmetic and Geometric Averages: Ryanair Illustration 4.3: Growth in Earnings per Share: Examples Illustration 4.4: Growth in Net Income: Toyota and Exxon Mobil Illustration 4.5: Breaking down Return on Equity: Exxon Mobil and Toyota Illustration 4.6: Effects of Changing Return on Equity: J.P. Morgan Chase Illustration 4.7: Measuring the Reinvestment Rate, Return on Capital and Expected Growth Rate  Titan Cement and SAP Illustration 4.8: Current, Historical and Industry Averages Illustration 4.9: Estimating Expected Growth with Changing Return on Capital  Blockbuster Illustration 4.10: Estimating Revenues at Sirius Illustration 4.11: Estimating Operating Margins  Sirius Illustration 4.12: Estimating Sales to Capital Ratio  Sirius Illustration 4.13: Stable Growth Rates and Excess Returns Illustration 4.14: Stable Growth Inputs (See full valuations in chapters 5 &6) 
Data Sets  histgr.xls:
There is a dataset on the web that summarizes historical growth
rates in earnings and revenues by industry group for the United States. 
Spreadsheets  chgrowth.xls:
This spreadsheet allows you to estimate the expected growth rate
in operating income for a firm where the return on capital is expected
to change over time. impliedROC.xls: Solves for the return on capital implied in terminal value assumptions about growth and reinvestment. 
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Illustrations 
Illustration 5.1: Valuation with Stable Growth DDM: J.P. Morgan Chase 
Data Sets  divfund.xls:
This dataset on the web summarizes retention ratios, by industry
group, for firms in the United States. divfcfe.xls: There is a dataset on the web that summarizes dividends, cash returned to stockholders and free cash flows to equity, by sector, in the United States. 
Spreadsheets  DDMst.xls:
This spreadsheet allows you to value a stable growth firm, with
stable firm characteristics (beta and retun on equity) and dividends
that roughly match cash flows. 
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Illustrations 
Illustration 6.1: Valuing a firm with a stable growth FCFF Model:
Nintendo 
Data Sets 

Spreadsheets  fcffginzu.xls:
This spreadsheet allows you to estimate the value of a firm using
the FCFF approach. fcffvsfcfe.xls: This spreadsheet allows you to compare the equity values obtained using FCFF and FCFE models captstru.xls: This spreadsheet allows you to compute the optimal debt ratio firm value for any firm, using the same information used for Boeing. It has updated interest coverage ratios and default spreads built in apv.xls: This spreadsheet allows you to compute the value of a firm, with leverage, using the adjusted present value approach 
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Illustrations 
Illustration 7.1: Comparing PE ratios and growth rates across firms:
Beverage Companies 
Data Sets  
Spreadsheets  
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Illustrations  Illustration 9.1: Estimates of Firm and Enterprise Value 
Data Sets  vebitda.xls:
This is a dataset on the web that summarizes value to earnings
multiples and fundamentals by industry group in the United States for
the most recent year psdata.xls: Dataset on the web that summarizes price to sales and value to sales ratios and fundamentals by industry group in the United States for the most recent year. 
Spreadsheets  firmmult.xls: This spreadsheet allows you to estimate firm value multiples for a stable growth or high growth firm, given its fundamentals. 
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Illustrations 
Illustration 10.1: Consolidated versus Separate Valuation  All Equity
Firm 
Data Sets 
cash.xls: Dataset on the web that summarizes the value of cash and marketable securities by industry group in the United States for the most recent quarter. 
Spreadsheets  GrossvsNet.xls: This spreadsheet allows you to reconcile the differences between the Gross debt and Net debt approaches to valuation. 
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Illustrations  Illustration 11.1: Fully Diluted approach to estimating Value per share Illustration 11.2: Treasury Stock Approach Illustration 11.3: Option Value Approach: Cisco and Google Illustration 11.4: Adjusting PE Ratio for Options Outstanding Illustration 11.5: Dealing with Expected Option Issues in the future 
Data Sets  optoverhang: Estimated option overhang by industry group, for firms in the United States. 
Spreadsheets  warrants.xls: This spreadsheet allows you to value the options outstanding in a firm, allowing for the dilution effect. 
Readings 

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Illustrations 
Illustration 13.1: The Value of Changing Management  SAP: Status
Quo versus Optimal value 
Data Sets  
Spreadsheets 
controlvalue.xls: This model analyzes the value of control in a firm. 
Readings 
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Illustrations  Illustration 14.1: Estimating the Illiquidity Discount for a Private
Firm: Standard
approaches and option approach Illustration 14.2: Estimating the Illiquidity Adjusted Discount Rate for a Private Firm: Kristin Kandy valued with unadjusted rate versus higher discount rate Illustration 14.3: Estimating Illiquidity Discount in a Relative Valuation 
Data Sets  Total Beta By Industry Sector: These are betas adjusted to reflect a firm's total exposure to risk rather than just the market risk component. 
Spreadsheets  liqdisc.xls: Estimates the illiquidity discount that should be applied to a private firm as a function of the firm's size and financial health. Uses both restricted stock approach and bidask spread regression. 
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Illustrations  Illustration 15.1: Valuing Cost Synergies Illustration 15.2: Valuing Growth Synergies: Higher Returns, More investments, longer growth period Illustration 15.3: Valuing Cost and Growth Synergies: P&G and Gillette Illustration 15.4: Valuing Cash Slack in a Merger Illustration 15.5: Valuing a Net Operating Loss Carryforward Illustration 15.6: Tax Benefits of writing up asset values after takeover: Congoleum Illustration 15.7: Valuing Additional Debt Capacity in a Merger 
Data Sets  
Spreadsheets 
synergyvaluation.xls:
This program estimates the value of synergy in a merger.

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Illustrations  
Data Sets  
Spreadsheets  complscore.xls: This spreadsheet allows you to measure the complexity in a company and give it a score. 
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Illustrations 
Illustration 17.1: Estimating the probability of bankruptcy using bond
price: Global Crossing 
Data Sets  dbtfund.xls:
Dataset on the web that summarizes book and market value debt
ratios by industry group in the United States for the most recent year optvar.xls: Standard deviations in firm value and equity value by industry group in the United States 
Spreadsheets  normearn.xls:
This spreadsheet allows you to normalize the earnings for a firm,
using a variety of approaches distress.xls: Estimates the probability that a firm will cease existence as a going concern  i.e. the probability of distress. equity.xls: A model that uses option pricing to value the equity in a firm; best suited for highly levered firms in trouble 
Readings 

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Data Sets  
Spreadsheets  model.xls: Chooses the right model to value your firm. 
Readings 
Topic  Chapters 
Introduction to Valuation  Chapter 1 
Estimating discount rates  Chapter 2 
Estimating cash flows  Chapter 3 
Estimating growth rate and terminal value  Chapter 4 
Discounted Cashflow Valuation: Examples  Chapter 56 
Relative Valuation  Chapters 79 
The Value of Cash and Cross Holdings  Chapter 10 
Dealing with Employee Options  Chapter 11 
The Value of Intangibles  Chapter 12 
The Value of Control  Chapter 13 
The Value of Liquidity  Chapter 14 
The Value of Synergy  Chapter 15 
The Value of Transparency  Chapter 16 
The Cost of Distress  Chapter 17 
Closing thoughts 
Chapter 18 