McKINSEY'S TRUSTED GUIDE TO TEACHING CORPORATE VALUATION, NOW IN ITS 25TH YEAR Valuation, University Edition, Sixth Edition, is filled with the expert guidance from McKinsey & Company that students and professors have come to rely on. New to the fully revised and updated Sixth Edition: New case studies that clearly illustrate how vital valuation techniques and principles are applied in real-world situations Expanded content on advanced valuation techniques New content on the strategic advantages of value-based management that reflect the economic events of the past decade For twenty-five years Valuation has remained true to its core principles and offers a step-by-step approach to valuation, including: Analyzing historical performance Forecasting performance Estimating the cost of capital with practical tips Interpreting the results of a valuation in light of a company's competitive situation Linking a company's valuation multiples to the core drivers of its performance The University Edition contains End-of-Chapter Review Questions, helping students master key concepts from each chapter. Wiley also offers an Online Instructor's Manual with a full suite of learning resources for professors and students. wileyvaluation.com

McKINSEY'S TRUSTED GUIDE TO TEACHING CORPORATE VALUATION, NOW IN ITS 25¯TH YEARValuation, University Edition, Sixth Edition, is filled with the expert guidance from McKinsey & Company that students and professors have come to rely on. New to the fully revised and updated Sixth Edition:* New case studies that clearly illustrate how vital valuation techniques and principles are applied in real-world situations* Expanded content on advanced valuation techniques* New content on the strategic advantages of value-based management that reflect the economic events of the past decadeFor twenty-five years Valuation has remained true to its core principles and offers a step-by-step approach to valuation, including:* Analyzing historical performance* Forecasting performance* Estimating the cost of capital with practical tips* Interpreting the results of a valuation in light of a company's competitive situation* Linking a company's valuation multiples to the core drivers of its performanceThe University Edition contains End-of-Chapter Review Questions, helping students master key concepts from each chapter.Wiley also offers an Online Instructor's Manual with a full suite of learning resources for professors and students.wileyvaluation.com

About the Authors ixPreface xiAcknowledgments xvPart One Foundations of Value1 Why Value Value? 3Review Questions 162 Fundamental Principles of Value Creation 17Review Questions 343 Conservation of Value and the Role of Risk 35Review Questions 484 The Alchemy of Stock Market Performance 49Review Questions 645 The Stock Market is Smarter Than You Think 65Review Questions 936 Return on Invested Capital 95Review Questions 1167 Growth 117Review Questions 134Part Two Core Valuation Techniques8 Frameworks for Valuation 137Review Questions 1679 Reorganizing the Financial Statements 169Review Questions 20410 Analyzing Performance 207Review Questions 22611 Forecasting Performance 229Review Questions 25512 Estimating Continuing Value 259Review Questions 28013 Estimating the Cost of Capital 283Review Questions 31414 Moving from Enterprise Value to Value per Share 317Review Questions 33615 Analyzing the Results 339Review Questions 34916 Using Multiples 351Review Questions 37217 Valuation by Parts 375Review Questions 393Part Three Advanced Valuation Techniques18 Taxes 397Review Questions 41119 Nonoperating Items, Provisions, and Reserves 413Review Questions 43020 Leases and Retirement Obligations 431Review Questions 44821 Alternative Ways to Measure Return on Capital 449Review Questions 47122 Inflation 473Review Questions 48723 Cross-Border Valuation 489Review Questions 51124 Case Study: Heineken 513Part Four Managing for Value25 Corporate Portfolio Strategy 557Review Questions 57526 Performance Management 577Review Questions 59827 Mergers and Acquisitions 599Review Questions 62728 Divestitures 629Review Questions 64729 Capital Structure, Dividends, and Share Repurchases 649Review Questions 68030 Investor Communications 681Review Questions 702Part Five Special Situations31 Emerging Markets 705Review Questions 72932 Valuing High-Growth Companies 731Review Questions 74533 Cyclical Companies 747Review Questions 75534 Banks 757Review Questions 78435 Flexibility 785Review Questions 819Appendix A Discounted Economic Profit Equals Discounted Free Cash Flow 821Appendix B Derivation of Free Cash Flow, Weighted Average Cost of Capital, and Adjusted Present Value 827Appendix C Levering and Unlevering the Cost of Equity 833Appendix D Leverage and the Price-to-Earnings Multiple 841Appendix E Other Capital Structure Issues 845Appendix F Technical Issues in Estimating the Market Risk Premium 851Index 855