About the Book :
Offering a unique combination of practical valuation techniques with the most current thinking, this book provides readers with an up-to-date synthesis of valuation theory as it applies to mergers, buyouts and restructuring. Readers will gain a strong understanding of the problems encountered in valuation practice as well as sound solutions. This includes detailed discussions of free cash flow valuation, financing and valuation of leveraged buyouts, real option analysis, and much more.
About the Author :
Enrique Arzac is Professor of Finance and Economics at Columbia University's Graduate School of Business, and Director of the Mergers and Acquisition programs for senior executives offered at Columbia Business School and London Business School. Previously he has served as Chairman of the Finance department, and Vice Dean for Academic Affairs for the Columbia Graduate School of Business. He has published many articles on corporate finance, portfolio management, and commodity markets in the leading financial journals Dr. Arzac is a director of the Adams Express Company, Petroleum and Resources Corporation, and BEA Funds. In addition he has served as a financial consultant to the State of New Jersey, the United Nations Conference on Trade Development and several U.S. and foreign firms, and has lectured in numerous executive programs in North and South America and Europe. Dr. Arzac holds a MA, MBA, and Ph.D. all from Columbia University.
Interesting Facts :
Integrates additional real-life examples and illustrations based upon recent transactionsOffers updated references to current academic research and its implication for applied valuationPresents new information on the tax consequences of alternative M&A transactionsExamines contract design to resolve differences of opinions in valuation and mergers and acquisitionsContains financial modeling software for preparing pro-forma financial statements and performing valuation of mergers, acquisitions and leveraged buyouts
Part One: The Tools of Valuation.A User's Guide.Forecasting and Valuation of Free Cash Flows.The Equity Premium and the Cost of Capital.Metrics and Multiples.Economic Value Added.Valuation with Changing Capital Structure.Debt Capacity for Acquisition Financing.Valuing Entry and Exit Options.Part Two: Mergers, Acquisitions, and Buyouts.Mergers and Acquisitions.Deal Making with Difference of Opinion.Special Offer Structures: Price Guarantees and Collars.Acquisitions in Developed and Emerging Markets.Leveraged Buyouts.Part Three: Recapitalizations and Restructuring.Recapitalization of Troubled Companies.Asset Restructuring.Appendix A. Financial Options.A.1 Financial Options in M & A Valuation.A.2 European Calls and Puts and American Calls.A.3 American Puts.A.4 Warrant Pricing Model.A.5 Asian Options.A.6 Knockout (Barrier) Options.A.7 The Put-Call Parity.A.8 Stock Options Paying A Known Dividend Yield.A.9 Dilution Adjustment in Warrant Valuation.Problems.Appendix B. Valuation Aids Software.Appendix C. Answers to Selected End-of-Chapter Problems.Appendix D. Modeling Mergers and Buyouts with DealModeler2122: User's Manual.D.1 Brief Description of DealModeler.D.1.1 Financial Modeling.D.1.2 Inputs.D.1.3 Addictions.D.1.4 Printing Output.D.1.5 Demo and Blank Copies.D.2 Modeling Mergers and Acquisitions.D.2.1 Setting Up the Financial Model for M&A Transactions.D.2.2 Valuation.D.2.3 Checking the Model.D.2.4 Printing M&A Financials and Valuation Output.D.2.5 Sensitivity and Scenario Analysis.D.3 Modeling Leveraged Buyouts.D.3.1 Setting Up the Financial Model for LBO Transactions.D.3.2 IRR Valuation.D.3.3 Checking the Model and Printing.Technical Notes.References.Index.