Investment Analysis

Michael Dempsey is Professor of Finance at Ton Duc Thang University in Ho Chi Minh City, Vietnam, having previously been Professor of Finance and Head of Finance at RMIT University, Melbourne, Australia. His personal web page can be found at dempseymichael.com.

• 1. IntroductionPART A Foundations of investment analysis2. The valuation of equity shares: the P/E ratio3. Shareholders’ required rate of return (the cost of equity capital)4. Financial leverage: the value of the firm and the economic cycle5. Accounting statements and ratio analysisPART B The nature of investment growth6. The nature of growth (the exponential function)7. Prediction of returns (the normal distribution)8. Statistical relations for component assets9. Growth over many periods10. Growth with many assetsPART C Principles of portfolio construction and management11. Portfolio choice between risky and risk-free assets12 A fundamental model of asset pricing and portfolio allocation13 Fluctuations of opinion: stock mispricing14 Portfolio algorithms15 Institutional portfolio management16 Conclusion and text review

"This book offers a comprehensive, yet intuitive, overview of portfolio theory and investment analysis for a student with little background in these subjects. I especially like how self-contained and accessible the book is. A beginning student with a little mathematics background should have no difficulty following the arguments and formulae." — Professor Raghavendra Rau, Sir Evelyn de Rothschild Professor of Finance, Cambridge Judge Business School, University of Cambridge, Cambridge"This book is organized in three excellent parts. The author, Michael Dempsey, not only provides a great depth of knowledge about the foundations of investments, portfolio analysis and management, but also shows carefully how the techniques acquired can be used and implemented in various business situations. Students and professionals who want to excel in the financial services industry would greatly benefit from reading this interesting book." — Duc Khuong Nguyen, Professor of Finance, Head, Department of Finance, Auditing and Accounting, Deputy Director for Research, IPAG Business School, Paris."Professor Dempsey does an excellent job in explaining investment and portfolio management in a clear and easy-to-understand style. The illustrative examples in the text will surely help students better understand complexities and bring more clarity to the analysis. I highly encourage anyone with an interest in finance, students and professionals alike, to read this book and to have it on their shelves." — Sabri Boubaker, Ph.D., Professor of Finance, South Champagne Business School & University of Paris Est