This 26-session equity valuation class will be taped starting January 26,
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
.
Introduction to Valuation
Part
I: Discounted Cashflow Valuation (258 pages). If you prefer two
slides per page, click here. (Updated for Spring 2009 class)
Part
II: Relative Valuation and Private Company Valuation (196 pages)
(If you prefer two
slides per page, click here
(Updated for Spring 2009 class)
Part
III: Real Options, Acqusition Valuation and Value Enhancement (171
pages) If you prefer two
slides per page, click here
(Updated for Spring 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 |
1 (1/26/09)
|
Introduction to Class Approaches to Valuation |
Syllabus for class |
A quick test of bias Valuation Approaches - DCF Valuation - Relative Valuation - Real Options First steps in DCF valuation |
A Quick bias test |
|
Weekly challenge # 1 |
Reconciling firm and equity valuation | Weekly challenge #1 Solution |
| Consistency: Equity versus Firm The four pillars of value The risk free rate: Defining it and measurement issues Equity Risk Premiums |
Kennecott
cashflow page Packet 1: 11-33 |
|
| More on historical risk premiuns Country risk premiums Company exposure to country risk Implied equity risk premiums |
Packet 1: 34-55 |
|
| Weekly Challenge # 2 | Estimating country risk premiums (or) |
Country premium challenge and solution Implied premium challenge, data and solution |
| Closing thoughts on equity risk premiums Betas - Why regression betas stink - Bottom up Betas |
Packet 1: 56-72 | |
| The Cost of Debt - Ratings and Default Spreads - The right tax rate - Subsidized debt Cash flows |
Packer 1: 73-96 | |
| Capitalizing leases Capitalizing R&D One-time charges Negative income Tax rate |
Packet 1: 97-107 | |
| Weekly Challenge # 3 | Adjusting Operating Earnings |
Weekly challenge Solution |
Dealing with NOLs |
Packet 1: 108-135 | |
Take the first quiz and check out the solution as well as the distribution of grades for the class. More on fundamental growth |
Packet 1: 136-151 | |
| Weekly Challenge # 4 | Estimating fundamental growth | Weekly challenge Solution |
| Terminal value - Constraints on growth - Length of growth period - Excess returns and consistentcy Picking the right model |
Packet 1: 152-172 | |
| Loose Ends in Valuation - Dealing with cash - Valuing cross holdings - Other assets? - The cost of complexity - Dealing with Debt |
Packet 1: 173-193 | |
| Weekly Challenge # 4A | Terminal Value Mechanics | Weekly challenge Solution |
| Equity options (employees) DCF valuations - Stable growth assumptions - Implied growth rates - Valuing banks |
Packet 1: 194-218 | |
| Decomposing value Negative FCFE and equity dilution Corporate governance and value The Dark Side of Valuation (beginning) |
Packet 1: 219-240 | |
| Weekly Challenge # 5 | Dealing with management options | Weekly challenge Solution |
| Weekly Challenge # 6 | Circular Reasoning in DCF valuation | Weekly Challenge Daimler valuation Solution |
| More on valuing growth companies Distressed and Declining Companies Dealing with uncertainty |
Packet 1: 241-End | |
Relative Valuation |
Packet 2: 1-30 | |
| Take the second
quiz and check out the solution as
well as the distribution of
grades for the class. More on PE ratios |
Packet 2: 31-45 | |
| The value of growth & price of risk PEG Ratios Value multiples EV/EBITDA |
Packet 2: 36-83 | |
| Weekly Challenge # 7 | Analyzing the PEGY ratio | Weekly challenge Solution |
| More on EV/EBITDA Book Value Multiples Revenue Multiples |
Packert 2: 84-124 | |
| Relative valuation of young and distressed companies Choosing between the multiples Private company valuation: introduction |
Packet 2: 125-160 | |
| Weekly Challenge # 8 | Relative Valuation versus DCF valuation | Weekly challenge Solution |
| Valuing private to private transactions - Total betas - Illiquidity - Key person Valuing private to public transactions Valuing IPOs |
Packet 2: 161-196 | |
| Introduction to real options The option to delay Patents as options |
Packet 3: 1-37 | |
| Weekly Challenge # 9 | Valuing Private companies | Weekly challenge Solution |
Take the third
quiz and check out the solution as
well as the distribution of
grades for the class. |
Packet 3: 38-48 | |
| The option to expand The otpion to abandon Equity in troubled firms |
Packet 3: 49-97 | |
| Acquirer's Anonymous: Seven Steps to Sobriety A Discourse or Rant on Acquisition Valuation |
Packet 3: 98-130 | |
| Value Enhancment - Versus Price Enhancement - Pathways to value enhancement - The expected value of control |
Packet 3: 131-170 | |
| Closing thoughts on valuation | Closing presentation Summaries of valuations |
|