Written by a gifted teacher and respected valuation authority, Damodaran on Valuation offers systematic examination of the three basic approaches to valuation – discounted cash-flow valuation, relative valuation, and contingent claim valuation – and the various models within these broad categories.

Using numerous real-world examples involving both US and International firms, the book illuminates the purpose of each particular model, its advantages and limitatations, the step-by-step process involved in putting the model to work, and the kinds of firms to which it is best applied. Among the tools presented are designed to:
* Estimate the cost of equity – including the capital asset pricing model and arbitrage pricing model
* Estimate growth rates – with coverage of how to arrive at a weighted average of growth rates by blending three separate approaches
* Value equity – focusing on the Gordon Growth Model and the two-and three-stage dividend discount model
* Measure free cash flow to equity – cash flows that are carefully delineated from the dividends of most firms
* Value firms – including free cash flow to firm models, which are especially suited to highly leveraged firms
* Estimate the value of assets by looking at the pricing of comparable assets – with insight into the use and misuse of price/earning and price/book value ratios, and underutilized price-to-sales ratios
* Measure the value of assets that share option characteristics – including a comparative look at the classic Black-Scholes and simpler binomial models.

Supported by an optional IBM-compatible disk, which consists of spreadsheet programs designed to help users apply the models highlighted in the book, Damodaran on Valuation provides practitioners involved in securities analysis, portfolio management, M&A, and corporate finance with the knowledge they need to value any asset.