Recent Trends in Valuation: From Strategy to Value

Recent Trends in Valuation From Strategy to Value......Page 3
Contents......Page 7
Preface......Page 11
About the editors......Page 13
1. Introduction – strategic valuation: the relationship between strategy, valuation techniques and options......Page 15
1.1. From strategy . . .......Page 16
1.2. . . . to value......Page 17
2. Option theory in the determination of value......Page 18
3. Conclusion......Page 20
1. Introduction......Page 21
2.1. Description of the DCF method......Page 23
2.2. Projected free operating cash flows......Page 24
2.3. Essential for the WACC: the cost of equity......Page 25
2.4. Importance of WACC in EVA®......Page 30
2.5. Enterprise DCF versus equity DCF......Page 31
2.6. Where can specific valuation parameters be found?......Page 32
3.1. Description of the APV method......Page 33
4.1. Observations......Page 35
4.2. Wrong interpretations of the DCF method (and APV method)......Page 36
4.3. Real options and the analogy with financial options......Page 37
4.4. When is the value of real options important?......Page 38
4.6. From decision-tree analysis (DTA) to real options......Page 39
4.7. A few examples of real options......Page 40
4.9. Critique of the real option method......Page 45
5. Summary and Conclusions......Page 46
References......Page 47
1. Introduction......Page 49
2.1. Introduction......Page 50
2.2. Empirical tests of discounted cash flow......Page 52
2.3. Discounted cash flow valuation of AOL......Page 57
2.4. Discounted cash flow valuation of Amazon.com......Page 63
3.1. Company performance measurement......Page 67
3.2. Expectations-based management: examples......Page 70
3.4. Expectations-based management: an integrated framework......Page 77
4.1. Introduction......Page 78
4.2. Coal lease valuation......Page 83
4.3. Cancellable operating lease valuation......Page 84
4.4. Consumer PC assembly business: exit decision......Page 86
4.6. Natural resources: exploration and development......Page 89
4.7. Capital expenditures: a programme......Page 92
4.8. Project analysis: a four-step process......Page 94
Note by the editors......Page 95
4. Value-based management: control processes to create value through integration......Page 101
1. Introduction......Page 102
2.2. Defining value-based management (VBM)......Page 103
2.3. Why value-based management?......Page 106
2.4. The stakeholder approach versus the shareholder approach......Page 107
3.1. Introduction......Page 108
3.2. Listed perspective......Page 109
3.3. Not-listed perspective......Page 111
4.2. Value-based management in practice......Page 117
4.3. Value-based management as a practice......Page 119
5. Conclusion......Page 154
References......Page 159
Index......Page 165