A superior new replacement to traditional discounted cash flow valuation models
In the aftermath of the financial meltdown, the models commonly used for discounted cash flow valuation havebecome outdated, practically overnight. To meet the demand for an authoritative guidebook to the new economy,internationally recognized expert Kenneth Hackel has written Security Valuation and Risk Analysis.
Packed with an arsenal of tools and know-how, this groundbreaking book shows you how to accurately analyze credit to determine the true value of a company and its ability to make a return on investors' money. The author's breakthrough approach helps you determine the attractiveness of a company based on its free cash flow, credit, and valuation characteristics. In-depth and easy to use, Security Valuation and Risk Analysis:
- Equips you with a revolutionary credit risk model to make confident and realistic valuations on any enterprise
- Explains why cash flow trumps productivity when valuing a company
- Offers a metric for clearly measuring the abilities of senior management
- Provides a comprehensive model to determine cost of capital, replacing the historically inaccurate capital asset pricing model
- Describes important adjustments to cash flow from operations that ensure the computation of free cash flow
A renowned expert on the subject of free cash flow analysis, Kenneth S. Hackel brings his credit-based valuation method to life with examples from his personal experience. With firsthand insight, he shows you how his models and other popular models fared when he used them to determine the cost of equity capital for IBM and to analyze how building a new refinery would affect Sunoco. Other such examples are discussed throughout the text.
The evidence is clear--investors who understand cash flow and credit will gain an important competitive advantage in today s market. See a company for what it's really worth with Security Valuation and Risk Analysis.
Gone are the days when executives and corporate finance practitioners could rely on discounted cash flow analysis to value companies and make important business and investment decisions. In today's market, it s credit that really matters, and now there's a superior tool to help analyze it--Security Valuation and Risk Analysis.
In this pioneering book, valuation authority Kenneth Hackel presents his next-generation methodology for placing a confident value on an enterprise and identifying discrepancies in value--a system that will provide even themost well-informed investor with an important competitive advantage.
At the core of Security Valuation and Risk Analysis is Hackel's successful credit model fordetermining an accurate fair value and reliable discount rate for a company. Using free cash flow as the basis for evaluating return on invested capital is the most effective method for determining value. Hackel takes you step by step through years of compelling evidence thatshows how his method has earned outsized returns and helped turn around companies that were heading toward failure.
Whether used for corporate portfolio strategy,acquisitions, or performance management, the tools presented in Security Valuation and Risk Analysis are unmatched in their accuracy and reliability. Reading through this informative book, you'll discover how to:
- Take advantage of early warning signs related to cash flow and credit metrics
- Estimate the cost of equity capital from which free cash flows are discounted
- Identify where management can free up resources by using a better definition of free cash flow
Security Valuation and Risk Analysis provides acomplete education on cash flow and credit, from how traditional analysts value a company and spot market mispricing (and why many of those traditional methods are obsolete) to working with the most recent financial innovations, including derivatives, special purposeentities, pensions, and more.
Security Valuation and Risk Analysis is youranswer to a credit market gone bad, from an expert who knows bad credit from good.