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Chapter 9: Doomsday - Declining and Distressed firms
Description
Description: Support session to accompany chapter 9 of the updated version of the Little Book of Valuation, published in March 2024.
Publisher: John Wiley
Amazon link: https://www.amazon.com/Little-Book-Valuation-Company-Profits/dp/1394244401
My webpage for the book: https://pages.stern.nyu.edu/~adamodar/New_Home_Page/littlebook2ed.htm
In this session, I examine at why investors have trouble valuing and pricing declining and distressed companies, arguing that the combination of shrinking revenues, margins under assault and the possibility of bankruptcy make for a potent mix. I try to value Bed, Bath and Beyond, a brick and mortar US retail company to illustrate the hurdles and ways to get around them.
BB&B valuation: https://pages.stern.nyu.edu/~adamodar/pc/littlebook2/BB&B2022.xlsx
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