Publications

16 Mar 2023
HBS Conference

Values and Valuations

October 2014 (Revised October 2014)
Case

Valuation Ratios in the Airline Industry, 2013

By: Paul M. Healy and Penelope Rossano

Examines factors underlying differences in valuation multiples (price-to-earnings and price-to-book) across four firms in the airline industry. View Details

Keywords: Airline Industry; Multiples; Valuation; Accounting; Air Transportation Industry

February 1996
Exercise

Free Cash Flow Valuation Problem Set

By: William A. Sahlman and Andrew S. Janower

Free cash flow valuation problems: 1) build a simple pro forma, 2) value a public company's stock, and 3) evaluate a proposed LBO. View Details

Keywords: Leveraged Buyouts; Cash Flow; Public Ownership; Problems and Challenges; Valuation

Article

Cash Take-Overs and Accounting Valuations

By: Russell Taussig and Samuel Hayes

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Awards

Notable Contributions to Accounting Literature Award

By: Paul M. Healy

Business Analysis and Valuation Using Financial Statements (South-Western College Publishing, 1996), with Victor L. Bernard and Krishna G. Palepu, won the 1999 American Accounting Association Notable Contributions to Accounting Literature Award. View Details

November 2009
Background Note

Business Valuation and the Cost of Capital

By: Timothy A. Luehrman

This note is an introduction to the cost of capital as used in discounted cash flow valuation analyses. The note covers basic financial economic principles and practical problems encountered in calculating the cost of capital, especially WACC. It concludes with... View Details

Keywords: Economics; Capital Budgeting; Cash Flow; Cost of Capital; Valuation

December 2023
Case

The Valuation Multiple Detective

By: Jonas Heese, Paul M. Healy and Pietro Bonetti

August 2000
Teaching Note

Fixed Income Valuation (TN)

By: W. Carl Kester

Teaching Note for (9-298-080). View Details

Keywords: Consumer Products Industry

25 Mar 2021
News

Startup Hits $1.5B Valuation

Keywords: internet security; entrepreneurship; veterans; leadership; News, Library, Internet, and Other Services; Information

2000
Book

Business Analysis and Valuation

By: Paul M. Healy, Krishna G. Palepu and Victor L. Bernard

Keywords: Valuation; Theory

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February 2006 (Revised October 2006)
Background Note

Introduction to Valuation Multiples

By: Robin Greenwood and Lucy White

Outlines the definition and applicability of financial multiples and their relationship to discounted cash flow analysis. View Details

Keywords: Cash Flow; Valuation

November 2012
Technical Note

OpCo / PropCo Valuation

By: Nicolas P. Retsinas, Lisa Strope and John C. Hettinger

This technical note describes the "OpCo/PropCo" process of valuing a real estate intensive business. The term "OpCo/PropCo" refers to a business arrangement in which a consolidated, real estate-intensive enterprise is split into two separate businesses: (1) A property... View Details

Keywords: Real Estate; Property; Valuation; Investment

April 2005 (Revised February 2006)
Background Note

Note on Option Valuation

For every option, a fair price has to be established. But how do you actually price an option? Assuming a basic knowledge of options, this note covers two pricing methods: the binominal tree and the Black-Scholes/Merton formula. View Details

Keywords: Valuation; Stock Options

February 2024 (Revised February 2024)
Case

CLSA: Integrating ESG in Stock Valuation

By: Shirley Lu, Aaron Yoon and Billy Chan

In 2023, a senior financial analyst at the Hong Kong-based stock brokerage firm CLSA was surprised to see that, based on his calculations, the financial impact from climate risks on a major Indian cement manufacturing company’s projected earnings could be massive.... View Details

Keywords: Accounting; Corporate Governance; Analysis; Stocks; Valuation; Environmental Sustainability; Financial Services Industry; Industrial Products Industry; Hong Kong; China; India; Asia

April 2010
Case

Groupe Ariel S.A.: Parity Conditions and Cross-Border Valuation

By: Timothy A. Luehrman and James Quinn

Groupe Ariel evaluates a proposal from its Mexican subsidiary to purchase and install cost-saving equipment at a manufacturing facility in Monterrey. The improvements will allow the plant to automate recycling and remanufacturing of toner and printer cartridges, an... View Details

Keywords: Exchange Rates; Securities Analysis; Project Evaluation; International Finance; Debt Securities; Currency Exchange Rate; Cash Flow; Cross-Cultural and Cross-Border Issues; Capital Budgeting; Europe; Mexico

April 2001 (Revised April 2002)
Background Note

Note on Pre-Money and Post-Money Valuation (A &B), A

Provides a brief introduction to calculations inherent in pre-money and post-money evaluations at multiple stages of financing. Relies on three different examples to illustrate how valuations can be calculated depending on the information provided. View Details

Keywords: Information; Valuation; Financing and Loans