The Search for Value: Measuring the Company's Cost of Capital (Financial Management Association Survey and Synthesis Series) Book

	Preface
Ch. 1	The Search for Value	1
I	Value Creation: Stockholders and Stakeholders	1
II	Techniques for Measuring Value Creation	4
III	The Rest of the Book	5
Ch. 2	Why You Should Use the Weighted Average Cost of Capital	9
I	The Simplest Case: Perpetual Constant Cash Flows	11
II	The Cost of Capital Under More Realistic Assumptions	18
III	Defining Cash Flows	22
	Appendix: Defining Cash Flows for an Alternative Model: Using the Pre-Tax Costs of Debt and Equity	25
Ch. 3	How to Estimate Your Weighted Average Cost of Capital	33
I	Estimating Costs for the Separate Components of Capital Structure	34
II	Estimating Weights for the Components of the Capital Structure	73
III	Sensitivity Analysis	80
	Appendix: Alternative Methods for Estimating the Cost of Equity	83
Ch. 4	The Cost of Capital for a Division, a Project, or a Private Company	101
I	Estimating Systematic Risk When Stock Prices Are Not Observable	103
II	Adjusting for Leverage	114
	Appendix: Other Factors That Affect the Cost of Equity	122
Ch. 5	Some Advanced Issues: Flotation Costs and Long-Term Projects	131
I	Flotation Costs	131
II	The Cost of Capital for Long-Term Projects	140
	Appendix: Capital Rationing and the Cost of Capital	153
Ch. 6	The Cost of Capital for Regulated Companies: Utilities and Deposit-Taking Financial Institutions	163
I	The Cost of Capital for Utilities	164
II	The Cost of Capital for Deposit-Taking Financial Institutions	174
Ch. 7	The Cost of Capital in a Global Economy	183
I	Globalization and the Cost of Capital	183
II	Measuring the Cost of Capital for an International Project	192
	Appendix: The Adjusted Net Present Value Approach	202
Ch. 8	Valuing Strategic Options: When the Discounted Cash Flow Approach Doesn't Work	209
I	What Are Embedded Real Options?	210
II	Why You Can't Estimate the Cost of Capital for Embedded Real Options	212
III	Valuing Embedded Real Options	218
	Index	225