Analytical Corporate Valuation

This book integrates the models employed in the fundamental analysis of a company with the models used by investors in the capital markets to diversify risks and maximize expected returns. The underlying thesis is that the company creates value only if the return on capital invested exceeds the cost of capital, while the objective is to demonstrate how integration of the fields of corporate finance and asset pricing enables comprehensive and accurate company valuation.

Companies can thrive only if they are able to create value for shareholders over time. A company's value creation and the correct approach to its measurement require two main skills: first, the ability to analyze and evaluate the company's fundamentals with respect to its business model and its performance over time; and second, knowledge of investors' models with regard to risk diversification and return maximization from which the cost of capital for the firm is derived. Based on this perspective, the book combines rigorous quantitative analysis with effective use of graphics to aid intuitive understanding.

Integrates the fields of corporate finance and asset pricing in order to enable comprehensive and accurate company valuation Offers strong methodological rigor, with analysis of all relevant models Appeals to academics, on the basis of the analysis of models, and practitioners, through the application of equations

Autorentext

Pasquale De Luca, PhD, is a Researcher and Adjunct Professor at Sapienza University of Rome, Italy, where he teaches Business Administration and Finance. His main fields of research are corporate finance and asset pricing, with a specific focus on topics including corporate valuation, capital structure choices and cost of capital, restructuring, mergers and acquisitions, private equity, and planning and control systems for management decisions.

Inhalt
Part I Fundamental analysis of the company.- 1 Strategic Formula of the firm.- 2 Economic and financial dynamics of the firm.- Part II Asset pricing.- 3 Risk and return in the capital market.- 4 Mean-variance approach.- 5 Equilibrium models in capital market.- Part III Corporate value.- 6 Capital structure choices of the company and the cost of capital.- 7 Equity valuation.- 8 Enterprise valuation.- 9 Option valuation.