This 26-session equity valuation class will be taped starting September 9,
2009, 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 Fall 2009 class)
Part
II: Relative Valuation and Private Company Valuation (196 pages)
(If you prefer two
slides per page, click here (
Updated for Fall 2009 class)
Part
III: Real Options, Acqusition Valuation and Value Enhancement (171
pages) If you prefer two
slides per page, click here
(Updated for Fall 2009 class)
Part
IV: Closing Presentation
This page will include the webcasts from the current class. 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.
| Session (Click here) | Topics covered | Lecture notes |
| Introduction to Class |
Syllabus for class |
|
2 (9/11/09) Webcast,
streamed (need a good internet connection) |
Approaches to Valuation Introduction to DCF valuaation Firm vs Equity Valuation |
Packet 1: 1-10 |
3 (9/16/09) Webcast,
streamed (need a good internet connection) |
The Big Picture of Valuation Riskfree Rates - Necessary Ingredients - What if the government is not default free? |
Packet 1: 11-30 |
Weekly challenge # 1 |
Reconciling firm and equity valuation | Weekly challenge #1 Solution |
4 (9/18/09) Webcast,
streamed (need a good internet connection) |
Equity Risk Premiums - What are they? - Historical Risk Premiums - Country Risk Premiums - Company Exposure to Country Risk - Implied Equity Risk Premiums |
Packet 1: 31-52 |
5 (9/23/09) Webcast,
streamed (need a good internet connection) |
Equirty Risk Premia and Bond default spreads Equity Risk Premia and Real Estate Cap Rates Implied premia for emerging markets Betas - The problem with regression betas - Solutions |
Packet 1: 52-72 |
| Weekly Challenge # 2 | Estimating country risk premiums (or) |
Country premium challenge and solution Implied premium challenge, data and solution |
6 (9/25/09) Webcast,
streamed (need a good internet connection) |
Updated ERP for September 2009 The Cost of Debt Why we use market value debt ratios.. Cost of Capital - From one currency to another... |
ERP Computation Spreadsheet: 9/30/09 Packet 1: 73-83 |
7 (9/20/09) Webcast,
streamed (need a good internet connection) |
Hybrid Securities Measuring Earnings - Updated values - Corrrecting for leases - Correcting for R&D |
Packet 1: 84-103 |
8 (10/7/09) Webcast,
streamed (need a good internet connection) |
Take the first
quiz and check out the solution as
well as the distribution of
grades for the class. - Accounting fraud - Dealing with money losing companies - Tax rates - Cap Ex |
Packet 1: 104-113 |
| Weekly Challenge # 3 | Adjusting Operating Earnings |
Weekly challenge Solution |
9 (10/12/09) Webcast,
streamed (need a good internet connection) |
Working Capital: Definition and Forecasting Cash flow to Equity: Dividends, Earnings and FCFE Expected growth - The problems with historical growth - Analyst and Management forecasts of growth - Fundamental Growth |
Packet 1: 114-139 |
10 (10/14/09) Webcast,
streamed (need a good internet connection) |
Fundamental Growth |
Packet 1: 140-162 |
| Weekly Challenge # 4A | Terminal Value Mechanics | Weekly challenge Solution |
11 (10/19/09) Webcast,
streamed (need a good internet connection) |
Terminal value: Final thoughts Picking the "right" DCF model Loose ends in valuation - The value of cash - The value of cross holdings |
Packet 1: 163-184 |
12 (10/21/09) Webcast,
streamed (need a good internet connection) |
Other missed assets? The value of complexity Defining debt: Cost of capital versus Debt to net out... Equity Options |
Packet 1: 184- 210 |
| Weekly Challenge # 5 | Dealing with management options | Weekly challenge Solution |
13 (10/26/09) Webcast,
streamed (need a good internet connection) |
Valuation examples |
Packet 1: 211-228 |
14 (10/28/08) Webcast,
streamed (need a good internet connection) |
Valuing Corporate Governance Lambdas and value The Dark Side of Valuation - Valuing young companies |
Packet 1: 229-244 |
| Weekly Challenge # 6 | Circular Reasoning in DCF valuation | Weekly Challenge Daimler valuation Solution |
15 (11/2/09) Webcast,
streamed (need a good internet connection) |
Valuing companies with R&D Dealing with uncertainty in valuation Valuing declining and distressed companies Macro effects on valuation Relative Valuation - Introduction - Definition and Descriptive Tests |
Packet 1: 244-258 Packet 2: 1-9 |
16 (11/4/09) Webcast,
streamed (need a good internet connection) |
Take the second quiz and check out the solution as well as the distribution of grades for the class. Analysis and Application Tests |
Packet 2: 10-22 |
17 (11/9/09) Webcast,
streamed (need a good internet connection) |
More on PE ratios PEG Ratios |
Packet 2: 23-61 |
18 (11/11/09) Webcast,
streamed (need a good internet connection) |
PEG Ratios- Applicaitons Value Multiples - EV/EBITDA and determinants Price to Book Ratios |
Packet 2: 62-99 |
| Weekly Challenge # 7 | Analyzing the PEGY ratio | Weekly challenge Solution |
19 (11/16/09) Webcast,
streamed (need a good internet connection) |
Visualizing cheap companies - PBV versus ROE EV to Book Capital Ratios Finding the companion variable PS and EV/Sales Ratios Brand Name Value |
Packet 2: 100-143 |
20 (11/18/09) Webcast,
streamed (need a good internet connection) |
Choosing between multiples Sector versus Market Relative Valuation Private Company Valuation - The absence of market prices - Holes in the financial statements Total Beta and diversification Illiquidity |
Packet 2: 144-185 |
| Weekly Challenge # 8 | Relative Valuation versus DCF valuation | Weekly challenge Solution |
21 (11/23/09) Webcast,
streamed (need a good internet connection) |
Take the third quiz and check out the solution as well as the distribution of grades for the class. Valuing a private company for a public offering |
Packet 2: 186-End Packet 3: 1-14 |
22 (11/30/09) Webcast,
streamed (need a good internet connection) |
Option Pricing Redux The Option to Delay - Valuing Patents - Valuing undeveloped natural reserves |
Packer 3: 15-43 |
23 (12/2/09) Webcast,
streamed (need a good internet connection) |
Valuing natural resource companies The option to expand - Valuing the option - Implications for young, growth companies The option to abandon and the value of flexibility Valuing equity as an option |
Packet 3: 44-86 |
24 (12/7/09) Webcast,
streamed (need a good internet connection) |
Final thoughts on valuing equity as an option Acquirers' Anonymous: Seven Steps to Sobriety - Evidence on acquisitions - Acquisition tests |
Packet 3: 87-119 |
25 (12/9/09) Webcast,
streamed (need a good internet connection) |
More acquisition tests |
Packet 3: 120-152 |
26 (12/14/09) Webcast,
streamed (need a good internet connection) |
Closing thoughts on Value Enhancement Dante meets DCF: Ten Sins in Valuation Project Findings |
Closing Presentation |
| Take the final and
check out the solution. |