This 26-session equity valuation class will be taped starting January 30, 2012, and the lectures are accessible as live streams.
You can get the supporting lecture notes by clicking on the pdf files
below - the pages covered by each lecture are provided next to each
lecture. The
quality of the video and audio leaves much to be desired but it will
get better over time. For the syllabus and other details, visit the home
page
.
Introduction to Valuation
Part
I: Discounted Cashflow Valuation (258 pages). If you prefer two
slides per page, click here. (Updated for Spring 2012 class)
Part
II: Relative Valuation and Private Company Valuation (202 pages) (If
you prefer two
slides per page, click here (Not yet updated for Spring 2012 class)
Part
III: Real
Options, Acqusition Valuation and Value Enhancement (172 pages) If
you prefer two
slides per page, click here(Not yet updated for Spring 2012 class)
Part
IV: Closing Presentation
This page will include the webcasts from the current class. The webcasts
can be accessed in one of three ways:
Streaming video (The file will be streamed to your computer. This will
work only if you have a good internet connection, but should be of the
best quality)
Video podcast (The .m4v file will be downloaded to your computer and you
can watch the video using Quicktime or video software or on your iPod)
Audio podcast (The .mp3 file will be downloaded as an audio file and can
be played on any audio player)
The AV system used to record the lectures
has changed and I think it is much improved. The prior semester's webcasts
can be found here.
If you want to join the Coursekit page for this class (or just lurk), here
is the link.
The emails related to this class can be accessed here.
Session (Click here) | Topics covered | Lecture notes |
Introduction to Class |
Syllabus
for class |
|
Bias in valuation Valuation Approaches Introduction to DCF valuation |
Bias Tests Introduction to Valuation (5-End) Packet 1 (pg 1-9) |
|
Weekly challenge # 1 |
Reconciling firm and equity valuation | Weekly challenge #1 Solution |
Equity vs firm valuation: Wrap up Inputs to DCF valuation The Discount rate - Choices of models - The riskfree rate |
Congoleum
Valuation test (to start class) Packet 1 (10-32) |
|
Equity Risk Premiums - Historical risk premiums - Implied risk premoiums - Country risk premiums |
Packet 1 (33-52) |
|
Weekly Challenge # 2 | Implied Premium versus Riskfree Rate |
Implied premium challenge, data and solution |
Equity Risk Premiums: Closing thoughts Betas - The problem with regression betas - Alternatives Cost of debt |
Beta tests Packet 1: 53-80 |
|
Subsidised debt |
Cash
flow tests Packet 1: 81-104 |
|
Weekly Challenge # 3 | Adjusting Operating Earnings |
Weekly challenge Solution & Synthetic rating |
One time and extraordinary charges Accounting malfeasance Money losing companies Cap ex and working capital Cash flows to equity Growth rates - Historical growth |
Packet 1: 104-130 | |
Historical Growth rates: Final thoughts Analyst estimates of growth Fundamental growth Growth for young companies |
Packet 1: 131-156 |
|
Take the first quiz and check out the solution as well as the distribution of grades for the class. Terminal Value |
Packet 1: 157-173 | |
Weekly Challenge # 4A | Terminal Value Mechanics | Weekly challenge Solution |
Loose Ends in Valuation - The value of cash - The value of cross holdings - Any other assets? - The cost of complexity |
Packet 1: 174-193 | |
Debt: Cost of capital versus Netting out Management options and equity value Valuations - Implied growth rates - Financial service companies |
Packet 1: 194-221 | |
Weekly Challenge # 5 | Dealing with management options | Weekly challenge Solution |
Decomposing value Valuing market indices The Dilution effect in DCF Corporate governance and value Valuing young growth companies |
Packet 1: 222-245 | |
Value over time R&D and value Valuing declining companies Valuing distressed companies Introduction to relative valuation |
Packet 1: 246- End Packet 2: 1-3 |
|
Weekly Challenge # 6 | Circular Reasoning in DCF valuation | Weekly Challenge Daimler valuation Solution |
Four steps in deconstructing multiples |
Packet 2: 4-33 | |
More on PE ratios PEG ratios Value multiples |
Packet 2: 34-79 | |
Take the second
quiz and check out the solution and the distribution. |
Packet 2: 80-95 | |
Price to Book ratios and ROE |
Packet 2: 96-140 | |
Weekly Challenge # 8 | Relative Valuation versus DCF valuation | Weekly challenge Solution |
The value of a brand name Choosing between multiples Valuing Private businesses - Special issues - Motive matters - Total betas |
Packet 2: 140-172 | |
Private company valuation Valuing a company for an IPO Valuing a company for a venture capitalist |
Packet 2: 173-End | |
The essence of real options |
Packet 3: 1-36 | |
Valuing undeveloped natural resource reserves The option to expand (strategic considerations) The option to delay The value of financial flexibility |
Packet 3: 37-71 | |
Take the third quiz and check out the solution and the distribution. Valuing equity in a troubled firm as an option |
Packet 3: 72-97 | |
Acquisition Valuation - A brief and depressing history - Acquisition errors |
Packet 3: 98-123 | |
Improving your odds on acquisitions Value Enhancement - vs price enhancement - Pathways to increase value |
Slide of cost vs growth synergies Packet 3: 124-138 |
|
Value of Control |
Packet 3: 139-172 | |
Dante meets DCF: Valuation Sins Project and course recap |
Closing presentation | |
The Final Exam |