Summary

As part of the CFA Institute Investment Series, the Second Edition of Equity Asset Valuation has been designed for a wide range of individuals, from graduate-level students focused on finance to practicing investment professionals. This globally relevant guide outlines the essential methods used to evaluate modern equity investments—including those traded outside North America. Two sample chapters have been provided to CFA Institute as a member benefit.

In this latest edition, the distinguished team of Jerald Pinto, Elaine Henry, Thomas Robinson, and John Stowe returns to provide you with the most up-to-date information associated with this important discipline. Blending theory with practice, they detail the contemporary techniques used to determine the intrinsic value of an equity security, and show you how to successfully apply these techniques in both foreign and domestic markets.

The Second Edition of Equity Asset Valuation clearly integrates finance and accounting concepts into the discussion—providing the evenness of subject matter treatment, consistency of notation, and continuity of topic coverage that is so critical to the learning process. Valuable for self-study and general reference, this revised guide contains clear, example-driven coverage of many of today’s most important valuation issues, including:

• Equity valuation—applications and processes

• Return concepts essential for evaluating an investment

• Discounted dividend valuation

• Free cash flow valuation

• Market-based valuation—including price and enterprise value multiples

• Residual income valuation

• Private company valuation

And to further enhance your understanding of the tools and techniques presented, Equity Asset Valuation Workbook, Second Edition —an essential study guide that contains challenging problems and solutions related to the concepts developed here—is also available.

With the authors bringing their own unique experiences and perspectives to the equity analysis process, this book distills the knowledge, skills, and abilities you need to succeed in today’s dynamic financial environment. Filled with in-depth insights and practical advice, the Second Edition of Equity Asset Valuation does not simply examine a collection of valuation models for you to use, but it challenges you to determine which models are most appropriate for specific companies and situations.