This 26-session equity valuation class will be taped starting January 25,
2010, 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 2010 class)
Part
II: Relative Valuation and Private Company Valuation (197 pages)
(If you prefer two
slides per page, click here (
Updated for Spring 2010 class)
Part
III: Real Options, Acqusition Valuation and Value Enhancement (171
pages) If you prefer two
slides per page, click here
(Updated for Spring 2010 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 |
|
| A quick test of bias Valuation Approaches - DCF Valuation - Relative Valuation - Real Options First steps in DCF valuation |
Packet 1: 1-10 | |
Weekly challenge # 1 |
Reconciling firm and equity valuation | Weekly challenge #1 Solution |
Consistency in cash flow estimation |
Carborandum/Kennecott
exhiibit Packet 1: 11-37 |
|
| Conditions for country risk premium to not matter Measuring company exposure to country risk Implied Equity Risk Premiums |
Packet 1: 38-58 | |
| Weekly Challenge # 2 | Implied Premium versus Riskfree Rate |
Implied premium challenge, data and solution |
| Betas - The problems with regression betas - Alternatives - Bottom up Betas Cost of Debt |
Packet 1: 59-81 | |
| Weights for the cost of capital Dealing with hybrids Estimating cash flows - Importance of updating earnings - Correcting for operating leases - Correcting for R&D |
Packet 1: 82-102 | |
| Weekly Challenge # 3 | Adjusting Operating Earnings |
Weekly challenge Solution & Synthetic rating |
| More on Earnings: Extraordinay charges and losses Effective versus Marginal Tax Rates What should be in cap ex? Working Capital Potential Dividends First steps on growth |
Packet 1: 103-127 | |
| More on historical growth Analysts estimates of growth Fundamental growth Top line versus bottom line growth |
Packet 1: 128-154 | |
Take the first quiz and check out the solution as well as the distribution of grades for the class. Terminal Value |
Packet 1: 155-170 | |
| Weekly Challenge # 4A | Terminal Value Mechanics | Weekly challenge Solution |
| Loose Ends in Valuation - The value of cash - Valuing cross holdings - Valuing other assets - Thc cost of complexity |
Packet 1: 171-192 | |
| More loose ends - Equity Options Valuation examples |
Packet 1: 193-217 | |
| Weekly Challenge # 5 | Dealing with management options | Weekly challenge Solution |
| Decomposing value into growth and assets in place Valuing the S&P 500 Valuing emerging market companies |
Packet 1: 218-240 | |
| The Dark Side of Valuation: Valuing young companies Valuing Companies with intangible assets Valuing declining and distressed companies |
Packet 1: 241-End | |
| Weekly Challenge # 6 | Circular Reasoning in DCF valuation | Weekly Challenge Daimler valuation Solution |
| Relative Valuation - The allure of relative valuation - A four step process to break down multiples - PE ratios |
Packet 2: 1-25 | |
| More on PE ratios - Comparing PE ratios across markets - Comparing PE ratios across time - Market regressions PEG ratios |
Packet 2: 26-72 | |
Take the second quiz and check out the solution as well as the distribution of grades for the class. EV Multiples |
Packer 2: 73-88 | |
| More on EV/EBITDA multiples Price to Book and EV/Invested Capital Ratios The Companion Variable |
Packet 2: 89-128 | |
| Weekly Challenge # 7 | Analyzing the PEGY ratio | Weekly challenge Solution |
| Price to Sales and EV/Sales The value of a brand name Choosing between multiples Sector versus Market Relative Valuation |
Packet 2: 129-163 | |
Valuing Private Companies |
Packet 2: 164- End | |
| Weekly Challenge # 8 | Relative Valuation versus DCF valuation | Weekly challenge Solution |
| The core of the real options argument Option pricing basics Three questions on real options The option to delay Patents as options |
Packet 3: 1-30 | |
Valuing a company with patents |
Packet 3: 31-71 | |
Take the third quiz and check out the solution as well as the distribution of grades for the class. Valuing Equity as an option |
Packet 3: 72-91 | |
| Valuing Equity as an option: A real world example Acquirer's Anonymous: Seven steps to Sobriety - A losers' game? - Seven sins!! |
Packer 2: 92-113 | |
| The value of synergy Improving the odds of success in mergers Value Enhancement vs. Price Enhancement - Increasing cash flows from existing assets |
Packet 2: 114-134 | |
Value Enhancement The value of control Value Enhancement short cuts |
Packet 2: 135-End | |
The final review |
Presentation | |
| Take the final and
check out the solution. |