This book is the greatest book I have found on applied corporate finance. It has the equivalent of a standard Corporate Finance course in Chapter 2. The remaining chapters expand the theoretical financial valuation framework and then show students that terms, structure, probability, and the control premium are fare more valuable insights than knowing WACC to one more decimal place.
If you buy it, buy the hardcover, you'll refer to its insights often.
I bought this book for my last M&A class, and as I am going through the book now, I find it to be riddled with computational errors. Why is that so? Shouldn't there be editors to check for these sorts of simple mistakes? Within the first few chapters, some of the problems and examples given in the chapter have data that don't match up and can cause confusion for those who are using it. Other than that, this book seems like a good backup reference, but all the math errors really make this book seem very unprofessional.
I was going over the reviews for this book and noticed that 8 of them occurred within a very short span around the beginning of December 2004. They were all 5 star reviews, and except for one person, this book was the only book they had reviewed (nothing before, nothing since). There were 2 one star reviews from the same period - actually a 1 star review started the series.
How likely is it that this was a random set of events? It would appear that someone was trying to juice the ratings. I've seen this with a few other books as well, and was wondering if anyone had another explanation. I find it hard to believe that an author like Arzac would attempt such a thing, but you never know.
This is a very good book, but possibly a little too technical across the board. The depth the book goes to in certain parts of the text are very deep, and it might have ben an idea to introduce more material to the book rather than go so deep into certain areas. An excellent reference text, but not a book that someone would want to read to come up to speed on topics such as M & A Valuation.
This book is a must for anyone who desires to improve her valuation and modeling skills.
It includes well detailed examples of LBO deal, which is quite rare in the literature.
The computation of the wacc is very comprehensive (may be too much) but the reader does not need to understand it to benefit from the other valuable chapters and demonstrations.
I have read many many books on Valuation for investment banking purposes. Many of them have good theories and decent number crunching. But this is the best one in regard technical aspects of finance. It's not for everyone. The book really is for practioner and MBA students who want go ahead of their peers. If you are through with this book nobody can beat you in valuation world.
Enrique I would really want you to cover Project Finance in your next addition.
I thoroughly enjoyed the book and liked the technical cocenpts especially the explanation about fomulas and derivations at the end of the book. Moreover the book is absolutely to the point and covers analytical part of Valution for M&A, LBO and Restructuring.
Great Work Enrique.
This is one of the best books I have read to date on Valuation. It spanks various methodologies and speaks to their differences. It goes into the detail and stays there to provide the depth necessary to get a intuative understanding. WARNING: not for those who do not like math. You can follow the derivations and I found it very good practice and reinforcement to learning the concepts.
Buy it and try it on a company in the news.
As an M&A finance practitioner, I am torn between giving this book a 3-star or 4-star rating. As many reviewers have noted, this is structured to be a reference book. There is more math than is typically needed or used in most small or medium-sized transactions, and there is very little introductory material for the uninitiated to get their bearings. Instead, the books delves straight into valuation exercises that are at times even more difficult than what I have encountered in the profession. The examples, while numerous and varied, are often reviewed much too quickly, and occasionally with so many permutations and small digressions that it is difficult to keep track of the purpose of the original endeavor. And as good students know, it is very hard to remember how to do something when you do not know *why* you are doing it. As such, it is difficult to recommend this book with much enthusiasm to anyone who does not at least have a few transactions under their belt because as a general guide it does not at all do the trick.
However, for more experienced users, it can come in handy, although I will still have to say that information is unnecessarily difficult to find. I feel like this book is so dense that it would be much more effective in an electronic (and hence, searchable) version. That being said, I really enjoyed a few chapters, including Chapter 9, which had some excellent examples of the effect different tax treatments have on a transaction. It came in very handy for a deal I was working on where I had to deal with NOLs.
As a venture capitalist and former investment banker, I have found this book to be a phenomenal resource for applied finance and valuation. The book is filled with real world examples of valuation techniques and more importantly, with detailed explanations of the academic underpinnings of these techniques. Arzac does a masterful job of explaining valuation methodology in an easy to follow manner. I highly recommend this book to anyone with an interest in investment banking or investing.
In my consulting career, I have worked on lots of models to value M& A candidates, to restructure debt, to perform due diligence etc. My main problem was that I always found it difficult to get a good reference book on valuation. Most books just give the basics of DCF and treat valuation in a straightforward manner.
Arzac's book on the other hand treats valuation from a practical and theoretical perspective and is supported by research evidence. I found his book to be very helpful as it contained the different types of valuation tools and arrangements commonly found in practice i.e. adjusted present value, earnouts, original issue discount, synergies and scenario analysis, contingent clauses, entry, foothold and exit options etc. I am an engineer by training so I found the technical notes at the end of the book to be very handy. In addition, the CD accompanying Arzac's textbook is very useful as it provided many essential valuation tools such as option pricing, debt capacity calculator etc. I highly recommend this book to anyone with a serious interest in corporate finance, consulting and investment banking
This is a solid work on the subject matter of valuations. Although it is definitely academically oriented rather than telling a than a story, it gives great examples (many of them based on real-life deals) of actual real-life applications.
The plethora of examples and solid coverage in the area earns this book a permanent spot on my bookshelf. I believe I'll be referencing it quite often. Also, the included CD has helpful sample deal models at are immediately usable.
On a side note, I find no basis for the 'one-star' review from the 'MBA-student' hoping to gain some insights before an interview at an investment bank. Comparing Arzac's solid work to the reviewer's misleading comments raises questions about the reviewer's competence and/or credibility.
Professor Arzac's latest work endeavors to balance the practical with the theoretical, and it succeeds. It is rare that an academic writer is able to so effectively and comfortably communicate practical financial concepts, particularly while remaining true to their academic roots. Arzac does a great service to the reader by straying from the standard academic explanations of valuation techniques to incorporate the everyday techniques that are actually applied in the real world (particularly in the area of the leveraged buyout). This work will be appreciated by valuation practitioners and academic readers alike.
"Valuation..." by Arzac is a refreshing compilation of valuation tools used by investment professionals today. It neatly combines the theory and historic data with what really is relevant in the marketplace. Having finished a top MBA program recently, I can attest that this book is second to none (especially when compared to "established" textbooks that fail in making the theory relevant). This reading is a must for someone looking to gain an edge in financial analysis, but even if you're a financial pro, there are many valuable insights contained in this easy to follow book.
This is a very superficial book. If you've had an introductory course in finance (Brealey and Myers or Ross, Westerfield and Jaffe) it is unlikely that you will learn anything new or profund.
Product Details :
Hardcover: 480 pages
Publisher: Wiley; 2 edition (November 9, 2007)
Language: English
ISBN-10: 0470128895
ISBN-13: 978-0470128893
Product Dimensions: 7 x 0.8 x 10.1 inches
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