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Price and Value

A Guide to Equity Market Valuation Metrics

Authors: Calhoun, George

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  • Use market multiples for valuation in the finance industry
  • Interpret the relationship between the market value of an enterprise and its fundamental performance
  • Triangulate the intrinsic value of a company by comparing valuation metrics in the form of simple ratios
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eBook $29.99
price for USA (gross)
  • ISBN 978-1-4842-5552-0
  • Digitally watermarked, DRM-free
  • Included format: PDF, EPUB
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  • Immediate eBook download after purchase
Softcover $39.99
price for USA
  • ISBN 978-1-4842-5551-3
  • Free shipping for individuals worldwide
  • Immediate ebook access, if available*, with your print order
  • Usually dispatched within 3 to 5 business days.
About this book

Understand how to use equity market metrics such as the price/earnings ratio (and other multiples) to value public and private enterprises. This essential book gives you the tools you need to identify and qualify investments and assess business strategy and performance.

Author George Calhoun, Founding Director of the Quantitative Finance Program at Stevens Institute of Technology, shows you how to use metrics to appraise mergers, acquisitions, and spin-offs. You will be able to shed light on financial market conditions, benchmark fair value assessments, and check and calibrate complex cash flow models.

Market multiples share a peculiar construction: they are based on an explicit apples-to-oranges comparison of market prices with accounting fundamentals, combining data derived from two very different sources and methodologies. This creates ambiguities in interpretation that can complicate the application of these metrics for the many purposes.

Multiples are thus easy to construct, but they can be difficult to interpret. The meanings of certain multiples have evolved over time, and new-and-improved versions have been introduced. The field is becoming more complex and the question of which metrics perform best can be a source of controversy.


What You Will Learn

  • Know the definitions, interpretations, and applications of all major market ratios, including: price/earnings (trailing and forward), cyclically adjusted price/earnings, cash-adjusted price/earnings, EV/EBITDA, price/sales, dividend yield, and many more
  • Examine the factors that drive the values of ratios from firm level (such as earnings growth, leverage, and governance) to market level (such as inflation, tax and fiscal policy, monetary policy, and international characteristics)
  • Apply metrics in: investment analysis, index construction, factor models, sum-of-the-parts analysis of corporate structures, and detection of asset bubbles

Who This Book Is For

Professionals at all levels working in the finance industry, especially in fields related to investment management, trading, and investment banking who are involved with valuation and assessing and advising on corporate transactions and interpreting market trends, and university students in finance-related programs at the undergraduate and graduate levels

About the authors

George Calhoun is a professor, and founding director of the Quantitative Finance Program at the Stevens Institute of Technology. He is also is executive director of the Hanlon Financial Systems Center at Stevens, and area coordinator for the graduate and undergraduate finance programs at Stevens. George is the series editor for the Stevens Series in Quantitative Finance & Data Sciences, a book series launched in 2014 with Springer/Apress. He has a PhD from the Wharton School. George has 30 years of experience in the technology industry: in executive and board-level positions at several public companies, including as CEO, chairman of the board (two companies), and audit committee chairman (four companies). He has extensive experience in capital acquisition through public offerings (five), convertible and straight debt offerings, private placements, joint ventures, and venture capital transactions. And he is the author of three books on advanced signal processing technology and applications to the telecommunications field.

Table of contents (6 chapters)

Table of contents (6 chapters)

Buy this book

eBook $29.99
price for USA (gross)
  • ISBN 978-1-4842-5552-0
  • Digitally watermarked, DRM-free
  • Included format: PDF, EPUB
  • ebooks can be used on all reading devices
  • Immediate eBook download after purchase
Softcover $39.99
price for USA
  • ISBN 978-1-4842-5551-3
  • Free shipping for individuals worldwide
  • Immediate ebook access, if available*, with your print order
  • Usually dispatched within 3 to 5 business days.

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Bibliographic Information

Bibliographic Information
Book Title
Price and Value
Book Subtitle
A Guide to Equity Market Valuation Metrics
Authors
Copyright
2020
Publisher
Apress
Copyright Holder
George Calhoun
eBook ISBN
978-1-4842-5552-0
DOI
10.1007/978-1-4842-5552-0
Softcover ISBN
978-1-4842-5551-3
Edition Number
1
Number of Pages
XXXI, 391
Number of Illustrations
4 b/w illustrations, 181 illustrations in colour
Topics

*immediately available upon purchase as print book shipments may be delayed due to the COVID-19 crisis. ebook access is temporary and does not include ownership of the ebook. Only valid for books with an ebook version. Springer Reference Works are not included.