This 26-session equity valuation class will be taped starting January 27, 2003 and the lectures will be available as Real Player files (You can download Real Player for free by going to http://www.real.com). 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 for the class.
Introduction to Valuation
Part I: Discounted Cashflow Valuation (260 pages). If you prefer two slides per page, click here.
Part II: Relative Valuation and Private Company Valuation (238 pages)
Part III: Real Options, Acqusition Valuation and Value Enhancement (238 pages) If you prefer two slides per page, click here.
Part IV: Closing Presentation

Session (Click here)	Topics covered	Lecture notes
1 (1/27/03)	Introduction to Class A Philosophical Defense of Valuation	Syllabus for class Project Description Introduction to Valuation (Pg 1-7)
2 (1/29/03)	Valuation Approaches Introduction to DCF valuation (Equity versus Firm)	Introduction to Valuation (8-End) Packet 1: 1-15
First Weekly Challenge	Reconciling Equity and firm valuation	The Challenge The Solution
3 (2/3/03)	Estimating Discount Rates Riskfree Rates Historical Risk Premiums	Packet 1: 16-34
4 (2/5/03)	Implied Equity Risk Premiums Betas: Regression and Bottom-up Betas Cost of debt: Ratings and Synthetic Ratings	Packet 1: 35-54
Second Weekly Challenge	Estimating Country Risk Premiums	The Challenge The Solution
5 (2/10/03)	From cost of debt to cost of capital Estimating earnings Updating Earnings The operating lease and R&D adjustment	Packet 1: 55-78
6 (2/12/03)	Dealing with one-time and extraordinary charges Adjusting for negative earnings The Right Tax Rate to use in estimating earnings What should go into net cap ex? Estimating working capital needs From cashflow to firm to cashflow to equity	Packet 1: 79-100
Third Weekly Challenge	Estimating FCFF	The Challenge The Solution
7 (2/19/03)	Historical Growth Arithmetic versus Geometric averages Dealing with negative earnings Size and Growth Analyst Estimates of Growth Fundamental Growth Rates - Growth in EPS, Net Income and Operating Income	Packet 1: 101-128
Fourth Weekly Challenge	Estimating Fundamental Growth	The Challenge The Solution
8 (2/24/03) (Quiz in first 30 minutes)	Take the first quiz and check out the solution to it. (You can grade yourself) Stable Growth Approaches for estimating terminal value Fundamentals in stable growth	Packet 1: 129-144
9 (2/26/03)	Choosing the right valuation model Loose Ends in Valuation - Valuing Cash and Marketable Securities - Valuing Cross Holdings - Dealing with management options	Packet 1: 145-175
Fifth Weekly challenge	Dealing with management options	The Challenge The Solution
10 (3/3/03)	Valuation Examples Stable Growth Dividend Discount Model Two-stage Dividend Discount Model Stable growth FCFE Model Two-stage FCFE Model	Packet 1: 176-204
11 (3/5/03)	Valuation Examples New Information and Value Emerging Market valuation The Corporate governance discount	Packet 1: 205-233
Sixth Weekly Challenge	Take the challenge with Daimler.	The Challenge Daimler valuation Daimler Circular valuation
12 (3/10/03)	Valuation Examples Valuing distressed companies Valuing young companies	Packet 1: 234-260
13 (3/12/03)	Relative Valuation Why do people like relative valuation? Categorizing Multiples The four steps in using mutliples PE Ratio Basics	Packet 2: 1-26
14 (3/24/03)	Earnings Multiples PE Ratio examples PE lower than growth = cheap? PEG ratios	Packet 2: 27-67
15 (3/26/03)	Relative PE Ratios Value Multiples Value to EBITDA	Packet 2: 68-101
Seventh Weekly Challenge	Analyzing the PEGY ratio	Challenge Solution
16 (3/31/03)	Take the quiz and check out the solution Price to Book Ratios	Packet 2: 102-122
Mystery Project	This project is due 4/14/03. It is a group project.	Description Data
17 (4/2/03)	Undervalued firms: Price to Book Ratios Price to Sales Ratios Enterprise value to Sales Ratios	Packet 2: 123-165
18 (4/7/03)	Choosing the Right Multiple Valuing Private Companies Estimating discount rates and cashflows Valuation: Private buyer versus Publicly traded firm	Packet 2: 166-208
19 (4/9/03)	Illiquidity Discounts for Private Companies The Value of Control Minority discounts Voting versus Non-voting shares IPO Valuation	Packet 2: 209-233
20 (4/14/03)	Introduction to Option Pricing The Three Tests for Real Options The Option to Delay Valuing a Patent as an Option	Packet 3: 1-29
21 (4/16/03)	Valuing companies with patents Natural Resource Options Valuing Options to Expand: The Exclusivity Test Valuing Options to Abandon	Packet 3: 30-65
22 (4/21/03)	Take the quiz and check out the solution Valuing equity in a distressed company as an option - Set up - Equity value and Option Life - The Conflict between Stockholders and Bondholders	Packet 3: 66-89
23 (4/23/03)	Valuing equity in troubled firms in practice Acquisitions - The five steps in an acquisition - Valuing Control	Packet 3: 90-124
24 (4/28/03)	Acquisition Valuation - Valuing Operating Synergy - Valuing Financial Synergy - Does synergy exists and who gets the benefits? Value Enhancement - Value versus Price Enhancement - The Paths to Value Enhancement	Packet 3: 125-159
25 (4/30/03)	Value Enhancement - Increasing cashflows from assets in place - Increasing expected growth - Increasing length of growth period - Reducing cost of capital Alternate Approaches to Value Enhancement - Economic Value Added	Packet 3: 160-198
26 (5/4/03)	More on EVA Closing Thoughts - Summary of your project findings - Parting Advice (to be taken with a grain of salt)	Packet 3: 199-222 Closing Presentation
	Take the final and check out the solution If you have taken all of the quizzes and the final, you can see what your grade would have been in this class (Honor system)