1 Enterprise Value, Company Value, and other Essential Financial Data1.1 Abstract and Keywords. 9
1.2 Definition of Two Essential Aggregates. 10
1.2.1 Enterprise Value. 10
1.2.2 The Fair Market Value of Equity. 13
1.2.3 Case Study Showing the Differences Between the Two Aggregates. 15
1.2.4 Fundamental Equations. 17
1.2.5 Market Efficiency and Behavioral Finance. 19
1.3 The Strategic Positioning of a Company. 23
1.4 Method Comparison and a Few Recommendations. 27
1.5 Key Takeaways and Limitations. 31
2 Asset-Based Approach to Valuation. 34
2.1 Abstract and Keywords. 34
2.2 The Net Worth of a Company. 36
2.3 Adjusted Net Asset Value Method. 41
2.3.1 Essential Income Statement Adjustments. 43
2.3.2 Essential Asset Adjustments. 53
2.3.3 Essential Equity and Liability Adjustments. 60
2.3.4 Case Study of a Family-Owned Real Estate Investment Company. 66
2.3.5 Adjusted Net Asset Value Case Study. 67
2.4 The Capitalized Excess Earnings or Goodwill Method. 71
2.4.1 Intangible Assets and Goodwill 71
2.4.2 Implementation of the CEEM or Goodwill Method. 72
2.4.3 Goodwill Valuation Case Study. 82
2.5 Key Takeaways and Limitations. 91
3 Fundamental Value or DCF Approach to Valuation. 94
3.1 Abstract and Keywords. 94
3.2 Fundamental Value Definition. 95
3.3 The Two-Stage DCF Method. 96
3.4 Generalities on the Forecast and Scenarios. 100
3.5 Free Cash Flows. 103
3.5.1 Free Cash Flow to the Firm.. 103
3.5.2 Free Cash Flow to Equity. 106
3.5.3 Company SEGI's Free Cash flows Case Study. 106
3.5.4 Free Cash Flow Summary. 112
3.6 Cost of Equity. 113
3.6.1 The Methods Used. 113
3.6.2 The Issues and Ambiguities of the Risk Premiums. 116
3.6.3 Estimated Cost of Equity for a Small Business. 117
3.6.4 Implementation of the Build-Up Method. 122
3.7 Weighted Average Cost of Capital (WACC) 124
3.8 Dividend Discount Model 127
3.9 D
