I must confess that I am not a great believer in instructor’s manuals, because I believe that teaching is personal - we develop our own ways of telling the story that we want to tell. Consequently, I have developed a fairly unconventional manual, where my notes on teaching are included as notes to powerpoint slides. You can view this as work in progress. I will add more to these notes and you will, I am sure, find other interesting things to add to each slide.
Semester Course on Valuation: As a precursor, the notes that you will see below are for a 27-session valuation class that I teach over a semester at Stern. I cover almost the entire investment valuation book and the only chapters I do not cover are the ones on fixed income valuation and futures and options. The sequence in which I introduce the topics and the material that goes with each are shown below:
|
Session |
Material covered |
Powerpoint file |
|
1-2 |
Introduction to Valuation Chapters 1-2 |
|
|
3-8 |
Estimating the Inputs for Discounted Cashflow Valuation Chapters 4, 6-12, Chapter 16 |
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|
9-11 |
Discounted Cashflow Valuation Examples Chapters 13-15, 21-23 |
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12-17 |
Relative Valuation Chapters 17-20 |
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|
18-19 |
Private Company valuation Chapter 24 |
|
|
20-22 |
Real Option Applications in Valuation Chapter 5, Chapters 27-30 |
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23-24 |
Acquisition Valuation |
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25-26 |
Value Enhancement |
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27 |
Review and Closing Thoughts |
There are about 800 overheads overall in these powerpoint presentations and I must confess that some of the sessions do get crammed. You will have to use your discretion to eliminate some of the topics, if you feel that this is too rushed. Given that there are other classes that look at mergers and acquisitions, that would be one of the topics I would consider removing. Another would be the valuation of private companies. While these powerpoint slides are not updated frequently, you can ge the most recent versions by going clicking here.
Quarter Course on Valuation(19 –20 sessions): If you are doing a course that lasts only 19 or 20 sessions, I would reduce my coverage of discounted cashflow and relative valuation by about a third. In particular, I would spend less time on the valuation examples (do fewer) and look at only three or four multiples instead of seven or eight. In addition, you can skip acquisition valuation and private company valuation.
4-8 sessions on Valuation: If you decide to incorporate valuation into a class on another topic (say corporate finance or M&A), you might want to use the shorter version of the lecture notes that I have available.
|
Session |
Material covered |
Powerpoint file |
|
1-2 |
Discounted Cashflow Valuation (Short Version) |
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|
3 |
Relative Valuation
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|
|
4 |
Real Option Applications in Valuation |
These notes were developed for a two-day valuation course that I teach for executives at Stern and they hit all the high points.
Valuation Project: The most effective way to learn valuation is by doing it. I assign a semester-long project where each student picks a company and values it using discounted cash flow, relative valuation and option pricing models. In addition, I have a second project that is much more tightly focused on valuing an initial public offering.
Quizzes and Exams: I give three quizzes and a final exam, all of which are open-book and open-notes. The quizzes are usually weighted 10% apiece and the final exam is weighted 30%.