Aswath Damodaran INVESTMENT VALUATION: SECOND EDITION Chapter 1: Introduction to Valuation 3 Chapter 2: Approaches to Valuation 16 Chapter 3: Understanding Financial Statements 37 Chapter 4: The Basics of Risk 81 Chapter 5: Option Pricing Theory and Models 121 Chapter 6: Market Efficiency: Theory and Models 152 Chapter 7: Riskless Rates and Risk Premiums 211 Chapter 8: Estimating Risk Parameters and Costs of Financing 246 Chapter 9: Measuring Earnings 311 Chapter 10: From Earnings to Cash Flows 341 Chapter 11: Estimating Growth 373 Chapter 12: Closure in Valuation: Estimating Terminal Value 425 Chapter 13: Dividend Discount Models 450 Chapter 14: Free Cashflow to Equity Models 487 Chapter 15: Firm Valuation: Cost of Capital and APV Approaches 533 Chapter 16: Estimating Equity Value Per Share 593 Chapter 17: Fundamental Principles of Relative Valuation 637 Chapter 18: Earnings Multiples 659 Chapter 19: Book Value Multiples 718 Chapter 20: Revenue and Sector-Specific Multiples 760 Chapter 21: Valuing Financial Service Firms 802 Chapter 22: Valuing Firms with Negative Earnings 847 Chapter 23: Valuing Young and Start-up Firms 891 Chapter 24: Valuing Private Firms 928 Chapter 25: Acquisitions and Takeovers 969 Chapter 26: Valuing Real Estate 1028 Chapter 27: Valuing Other Assets 1067 Chapter 28: The Option to Delay and Valuation Implications 1090 Chapter 29: The Option to Expand and Abandon: Valuation Implications 1124 Chapter 30: Valuing Equity in Distressed Firms 1155 Chapter 31: Value Enhancement: A Discounted Cashflow Framework 1176 Chapter 32: Value Enhancement: EVA, CFROI and Other Tools 1221 Chapter 33: Valuing Bonds 1256 Chapter 34: Valuing Forward and Futures Contracts 1308 Chapter 35: Overview and Conclusions 1338 References 1359 1 CHAPTER 1 INTRODUCTION TO VALUATION Every asset, financial as well as real, has a value. The key to essfully investing in and managing these a