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<p>About the Authors ix</p> <p>Introduction xi</p> <p><b>Part One Questions</b></p> <p>1 Why Value Value? 3</p> <p>2 Finance in a Nutshell 5</p> <p>3 Fundamental Principles of Value Creation 7</p> <p>4 Risk and the Cost of Capital 11</p> <p>5 The Alchemy of Stock Market Performance 15</p> <p>6 Valuation of ESG and Digital Initiatives 19</p> <p>7 The Stock Market is Smarter Than You Think 21</p> <p>8 Return on Invested Capital 27</p> <p>9 Growth 31</p> <p>10 Frameworks for Valuation 35</p> <p>11 Reorganizing the Financial Statements 39</p> <p>12 Analyzing Performance 43</p> <p>13 Forecasting Performance 47</p> <p>14 Estimating Continuing Value 51</p> <p>15 Estimating the Cost of Capital 55</p> <p>16 Moving from Enterprise Value to Value per Share 59</p> <p>17 Analyzing the Results 63</p> <p>18 Using Multiples 67</p> <p>19 Valuation by Parts 71</p> <p>20 Taxes 75</p> <p>21 Nonoperating Items, Provisions, and Reserves 77</p> <p>22 Leases 81</p> <p>23 Retirement Obligations 83</p> <p>24 Measuring Performance in Capital-Light Businesses 85</p> <p>25 Alternative Ways to Measure Return on Capital 89</p> <p>26 Inflation 91</p> <p>27 Cross-Border Valuation 95</p> <p>28 Corporate Portfolio Strategy 99</p> <p>29 Strategic Management: Analytics 103</p> <p>30 Strategic Management: Mindsets and Behaviors 107</p> <p>31 Mergers and Acquisitions 111</p> <p>32 Divestitures 115</p> <p>33 Capital Structure, Dividends, and Share Repurchases 119</p> <p>34 Investor Communications 123</p> <p>35 Emerging Markets 127</p> <p>36 High-Growth Companies 129</p> <p>37 Cyclical Companies 131</p> <p>38 Banks 135</p> <p>39 Flexibility 139</p> <p><b>Part Two Solutions</b></p> <p>1 Why Value Value? 145</p> <p>2 Finance in a Nutshell 147</p> <p>3 Fundamental Principles of Value Creation 149</p> <p>4 Risk and the Cost of Capital 151</p> <p>5 The Alchemy of Stock Market Performance 153</p> <p>6 Valuation of ESG and Digital Initiatives 155</p> <p>7 The Stock Market is Smarter Than You Think 157</p> <p>8 Return on Invested Capital 159</p> <p>9 Growth 161</p> <p>10 Frameworks for Valuation 163</p> <p>11 Reorganizing the Financial Statements 165</p> <p>12 Analyzing Performance 167</p> <p>13 Forecasting Performance 169</p> <p>14 Estimating Continuing Value 173</p> <p>15 Estimating the Cost of Capital 175</p> <p>16 Moving from Enterprise Value to Value per Share 177</p> <p>17 Analyzing the Results 179</p> <p>18 Using Multiples 181</p> <p>19 Valuation by Parts 183</p> <p>20 Taxes 185</p> <p>21 Nonoperating Items, Provisions, and Reserves 187</p> <p>22 Leases 189</p> <p>23 Retirement Obligations 193</p> <p>24 Measuring Performance in Capital-Light Businesses 195</p> <p>25 Alternative Ways to Measure Return on Capital 197</p> <p>26 Inflation 199</p> <p>27 Cross-Border Valuation 203</p> <p>28 Corporate Portfolio Strategy 207</p> <p>29 Strategic Management: Analytics 209</p> <p>30 Strategic Management: Mindsets and Behaviors 211</p> <p>31 Mergers and Acquisitions 213</p> <p>32 Divestitures 215</p> <p>33 Capital Structure, Dividends, and Share Repurchases 217</p> <p>34 Investor Communications 219</p> <p>35 Emerging Markets 223</p> <p>36 High-Growth Companies 225</p> <p>37 Cyclical Companies 227</p> <p>38 Banks 229</p> <p>39 Flexibility 231</p> <p>Index 233</p>

<p><b>MCKINSEY & COMPANY</b> is a global management-consulting firm that serves leading global organizations across a wide range of industries and functions, helping them create change that matters. <p><b>TIM KOLLER</b> is a partner in McKinsey's Stamford, Connecticut office, where he leads a global team of corporate-finance consultants. Tim has served clients globally on corporate strategy and capital markets, mergers, acquisitions and other transactions, and strategic planning and resource allocation. <p><b>MARC GOEDHART</b> is a senior expert in McKinsey's Amsterdam office and endowed professor of corporate valuation at Rotterdam School of Management, Erasmus University (RSM). <p><b>DAVID WESSELS</b> is an adjunct professor of finance at the Wharton School of the University of Pennsylvania. He was named by <i>Bloomberg Businessweek</i> as one of America's top business school instructors. <p><b>MICHAEL CICHELLO</b> is a teaching professor at the McDonough School of Business at Georgetown University.

<p><b>THE IDEAL COMPANION TO <i>VALUATION | SEVENTH EDITION</i></b> <p><i>Valuation Workbook</i> is the ideal companion to McKinsey's <i>Valuation, Seventh Edition</i>, helping you build intuition and understanding of difficult concepts and calculations before using them in the real world. This workbook reviews valuation concepts and techniques from the ground up, with chapter-by-chapter summaries and comprehensive questions and answers that allow you to test your knowledge and skills. Useful both in the classroom and for self-study, this must-have guide is essential for reviewing and applying the renowned McKinsey & Company approach to valuation, and reinforces the major topics discussed in detail in the book. Fully updated to align with <i>Valuation, Seventh Edition</i>, this workbook is an invaluable learning tool for students and professionals alike. <p>Valuation has become central to corporate financial strategy, and its practitioners must be exceptional at every aspect of the role. There is no room for weak points, and excellence is mandatory. This workbook helps you practice, review, study, and test yourself until you are absolutely solid in every concept, every technique, and every aspect of valuation as demanded in today's economy. <ul> <li>Master the concepts of value creation, the intrinsic metrics of value, M&A, joint ventures, and more</li> <li>Estimate the cost of capital, continuing value, and other vital calculations essential to valuation</li> <li>Test your understanding before putting it to work in the real world</li> </ul> <p>Designed specifically to reinforce the material presented in the book, this workbook provides independent learners with the opportunity to try their hand at critical valuation skills, and helps students master the material so they can enter the job market ready to perform. For financial professionals and students seeking deep, comprehensive understanding, <i>Valuation Workbook, Seventh Edition</i>, is an essential self-study companion to the main text.

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