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This web page is designed to support "Damodaran on Valuation", the second edition. The publisher is John Wiley and Sons. You can navigate the site by either going to individual chapters and getting supporting material by chapter, or by going to the supporting material directly. The supporting material includes:

1. Chapter Outlines and overheads: These are saved as pdf files, and you need Adobe Acrobat to read them. You can download Adobe Acrobat by going to the Adobe site. (www.adobe.com) The overheads are categorized by topic, rather than chapter. To go to overheads, click here.
2. Derivations and Discussion: These represent interesting questions that often come up in the context of the specified topic, with discussions and analyses.
3. Readings: These are readings from business and academic publications that supplement the specific topic.
4. Powerpoint Presentations: These are power point presentations that are designed for use by instructors. You will need a password to download these as well.
5. Spreadsheets: These are spreadsheets that supplement the topic. They are in Microsoft Excel format, and can be used on either a Mac or Windows system.
6. Datasets: These are useful datasets to supplement each chapter. They generally include industry averages for key variables and represent updates on many of the tables in the book.
7. Web Casts: These are webcasts of the lectures from the valuation class that I teach at Stern. You can use the lecture notes and the text book to follow the lectures.

You can pick the chapter that you would like to go to, to see illustrations, solutions and other supporting material.

Chapter 1	Chapter 2	Chapter 3	Chapter 4	Chapter 5	Chapter 6
Chapter 7	Chapter 8	Chapter 9	Chapter 10	Chapter 11	Chapter 12
Chapter 13	Chapter 14	Chapter 15	Chapter 16	Chapter 17	Chapter 18

Or you can pick the material that you are interested in.

Spreadsheets	Overheads
Powerpoint Presentations	Datasets

Chapter 1: Introduction to Valuation

Topic	Details
Overheads	Introduction to Valuation
Readings	The Rise of Jack Grubman The Fall of Jack Grubman The Consequences of a Sell Recommendation A Sage on Enron Fairness Opinion: What's fair about it? Second Opinions? Regulation FD: The SEC's shot at evening the playing field For more readings, go here.

Chapter 2: Estimating Discount Rates

Topic	Details
Overheads	Download as pdf file
Illustrations	Illustration 2.1: Estimating CAPM risk parameters for Disney Illustration 2.2. Bottom-up Beta for Disney Illustration 2.3: Bottom-up Beta and Total Beta for Kristin Kandy Illustration 2.4: Cost of Equity for an emerging market company: Embraer Illustration 2.5: Estimating Costs of Debt: Kristin Kandy Illustration 2.6: Breaking down a convertible bond into debt and equity components: Disney Illustration 2.7: Market Value and Book Value Debt Ratios - Disney Illustration 2.8: Estimating Cost of Capital: Disney, Kristin Kandy and Embraer
Data Sets	histretSP.xls: Summarizes historical returns on stocks, T.Bonds and T.Bills going back to 1928. ratings.xls: This dataset includes default spreads for bonds in different ratings classes. ctryprem.xls: Contains the updated ratings for countries and the risk premiums associated with each. histimpl.xls: Shows the inputs used to calculate the premium in each year for the U.S. market. betas.xls: Updated betas and unlevered betas by business sector in the United States. spearn.xls: Earnings changes, by year, for the S&P 500 going back to 1960. wacc.xls: Costs of debt, costs of equity, debt ratios and costs of capital, by industry group, for firms in the United States.
Spreadsheets	implprem.xls: This spreadsheet allows you to estimate the implied equity premium in a market. accbeta.xls: Estimate the accounting beta on a division or firm. risk.xls: Run a regression of stock returns against market returns and estimate risk parameters. levbeta.xls: Estimate the unlevered beta for a firm and compute the betas as a function of the leverage of the firm. ratings.xls: This spreadsheet allows you to estimate the synthetic rating and cost of debt for any firm. oplease.xls: This spreadsheet allows you to convert operating lease expenses into debt. wacccalc.xls: This spreadsheet allows you to convert book values of debt into market values.
Readings	Market Risk and Time Horizon Investors must recall risk New Definitions of Risk Diversification matters Risk Premium in Emerging Markets Classic Rule of Risk Premium under Attack Are risk premiums too low? (Greenspan testimony) Historical Risk premiums: A reexamination A contrary view on betas Margin for Safety.. An alternative to beta? For more readings, go here.

Chapter 3: Estimating Cash Flows

Topic	Details
Overheads	Download as pdf file
Illustrations	Illustration 3.1: Updated Earnings for Google: September 2005 Illustration 3.2: Capitalizing R&D expenses: Cisco in 2005 Illustration 3.3: Adjusting Operating Income for Operating Leases: Target in 2005 Illustration 3.4: Effect of Tax Assumptions on Value Illustration 3.5: The Effect of Net Operating Loss on Value - Sirius Illustration 3.6: Tax Benefit from Expensing: Cisco in 2005 Illustration 3.7: Estimating Normalized Net Capital Expenditures - Titan Cement Illustration 3.8: Effect of Capitalizing R&D- Cisco Illustration 3.9: The Effect of Acquisitions: Cisco in 2005 Illustration 3.10: Working Capital versus Non-cash Working Capital - Target Illustration 3.11: Estimating Non-cash Working Capital Needs - Target
Data Sets	taxrate.xls: There is a dataset on the web that summarizes average effective tax rates by industry group in the United States for the most recent quarter. wcdata.xls: There is a dataset on the web that summarizes non-cash working capital needs by industry group in the United States for the most recent quarter. capex.xls: Summarizes capital expenditures as a percent of depreciation, by industry group. Operating Lease effect on debt: This summarizes the impact of converting operating lease commitments into debt on market debt to capital ratios, operating income and return on capital, categorized by industry.
Spreadsheets	R&Dconv.xls: This spreadsheet allows you to convert R&D expenses from operating to capital expenses. oplease.xls: This spreadsheet allows you to convert operating lease expenses into debt.
Readings	Measuring Earnings The Content of an Annual Report Low Points in Accounting History Operating Leases as Debt R& D's effects on earnings Smoothing Earnings Is this debt? One-time Write off? The Accounting Black Box The Practices of Five Companies: GE, Coke, AIG, Williams and IBM Warnings Signs in Earnings Reports Accounting versus Cash Earnings Off Balance Sheet Items? Special Purpose Entities A Primer on Financial Statements Adjusting for Operating Leases Adjusting for R&D Expenses Accounting versus Cash Earnings Working Capital and Cashflows For more readings, go here.

Chapter 4: Estimating Growth and Terminal Value

Topic	Details
Overheads	Download as pdf file
Illustrations	Illustration 4.1: Length of Growth Period Illustration 4.2: Differences between Arithmetic and Geometric Averages: Ryanair Illustration 4.3: Growth in Earnings per Share: Examples Illustration 4.4: Growth in Net Income: Toyota and Exxon Mobil Illustration 4.5: Breaking down Return on Equity: Exxon Mobil and Toyota Illustration 4.6: Effects of Changing Return on Equity: J.P. Morgan Chase Illustration 4.7: Measuring the Reinvestment Rate, Return on Capital and Expected Growth Rate - Titan Cement and SAP Illustration 4.8: Current, Historical and Industry Averages Illustration 4.9: Estimating Expected Growth with Changing Return on Capital - Blockbuster Illustration 4.10: Estimating Revenues at Sirius Illustration 4.11: Estimating Operating Margins - Sirius Illustration 4.12: Estimating Sales to Capital Ratio - Sirius Illustration 4.13: Stable Growth Rates and Excess Returns Illustration 4.14: Stable Growth Inputs (See full valuations in chapters 5 &6)
Data Sets	histgr.xls: There is a dataset on the web that summarizes historical growth rates in earnings and revenues by industry group for the United States. fundgrEB.xls: There is a dataset on the web that summarizes reinvestment rates and return on capital by industry group in the United States for the most recent quarter. margins.xls: This dataset on the web summarizes operating margins, by industry, for the United States. wacc.xls: This dataset on the web summarizes the debt ratios and costs of debt, by industry group, for firms in the United States. capex.xls: This dataset on the web summarizes the reinvestment rates, by industry group, for firms in the United States.
Spreadsheets	chgrowth.xls: This spreadsheet allows you to estimate the expected growth rate in operating income for a firm where the return on capital is expected to change over time. impliedROC.xls: Solves for the return on capital implied in terminal value assumptions about growth and reinvestment.
Readings	The inside of earnings growth in the 1990s Evaluating analyst growth estimates Return on Capital, not growth.... Competitive Advantage Period For more readings, go here.

Chapter 5: Equity DCF Models

Topic	Details
Overheads	Download as pdf file
Illustrations	Illustration 5.1: Valuation with Stable Growth DDM: J.P. Morgan Chase Illustration 5.2: Valuing a firm wtih the two-stage DDM: Goldman Sachs Illustration 5.3: Valuing with the H Model: Barclays Bank Illustration 5.4: Valuing with the Three-stage DDM: Canara Bank Illustration 5.5: Valuing with modified DDM: Exxon Mobil Illustration 5.6: Valuing the S&P 500 using a modified DDM: January 1, 2005 Illustration 5.7: FCFE Stable Growth Model: Exxon Mobil Illustration 5.8: Two-Stage FCFE Model: Toyota Illustration 5.9: Three-stage FCFE Model: Tsingtao Breweries Illustration 5.10: Equivalence of the FCFE and DDM models
Data Sets	divfund.xls: This dataset on the web summarizes retention ratios, by industry group, for firms in the United States. divfcfe.xls: There is a dataset on the web that summarizes dividends, cash returned to stockholders and free cash flows to equity, by sector, in the United States.
Spreadsheets	DDMst.xls: This spreadsheet allows you to value a stable growth firm, with stable firm characteristics (beta and retun on equity) and dividends that roughly match cash flows. DDM2st.xls: This spreadsheet allows you to value a firm with a temporary period of high earnings followed by stable growth. DDMH.xls: This spreadsheet allows you to use the H model to value a stock. DDM3st.xls: This spreadsheet allows you to value a firm with a period of high growth followed by a transition period where growth declines to a stable growth rate. divginzu.xls: A complete dividend discount model that can do stable growth, 2-stage or 3-stage valuation. This is your best choice if you are analyzing financial service firms.
Readings	The Dividend Discount Model The dividend yield matters.... Microsoft faces a call to pay dividends For more readings, go here.

Chapter 6: Firm Value DCF Models

Topic	Details
Overheads	Download as pdf file
Illustrations	Illustration 6.1: Valuing a firm with a stable growth FCFF Model: Nintendo Illustration 6.2: Valuing Titan Cement Illustration 6.3: Valuing Target: Dealing with Operating Leases Illustration 6.4: Valuing SAP: Effects of R&D Illustration 6.5: Valuing a Young, High Growth Company: Sirius Illustration 6.6: Valuing a firm with APV Approach: Titan Cement Illustration 6.7: Discounted Cashflow Valuation and Economic Value Added Illustration 6.8: An EVA Valuation of Titan Cement Illustraiton 6.9: Analyzing the Capital Structure for Titan Cement Illustration 6.10: Using the APV Approach to calculate Optimal Debt Ratio for Titan Cement
Data Sets	wacc.xls: This dataset on the web summarizes the cost of capital by industry group, for the United States. Book and Market Debt Ratios By Industry eva.xls: This dataset on the web summarizes the returns on capital (equity), costs of capital (equity) and excess returns, by industry group, for firms in the United States.
Spreadsheets	fcffginzu.xls: This spreadsheet allows you to estimate the value of a firm using the FCFF approach. fcffvsfcfe.xls: This spreadsheet allows you to compare the equity values obtained using FCFF and FCFE models captstru.xls: This spreadsheet allows you to compute the optimal debt ratio firm value for any firm, using the same information used for Boeing. It has updated interest coverage ratios and default spreads built in apv.xls: This spreadsheet allows you to compute the value of a firm, with leverage, using the adjusted present value approach
Readings	Adjusted Present Value with growth and changing cost of capital EVA as elixir An EVA debate

Chapter 7: Relative Valuation- First Principles

Chapter 8: Equity Multiples

Topic	Details
Overheads	Download as pdf file
Illustrations	Illustration 8.1: Estimating Equity Multiples for a high growth firm in the two-stage model Illustration 8.2: Comparing PE across software companies Illustration 8.3: Comparing PEG ratios across semiconductor companies Illustration 8.4: Comparing PBV ratios across banks Illustration 8.5: Comparing price to sales ratios across specialty retailers Illustration 8.6: PE Ratios across time for the S&P 500 Illustration 8.7: Comparing PBV ratios across time Illustration 8.8: Comparing PE Ratios across markets
Data Sets	pedata.xls: Dataset on the web that summarizes price earnings ratios and fundamentals by industry group in the United States for the most recent year pbvdata.xls: Dataset on the web that summarizes price to book and value to book multiples and fundamentals by industry group in the United States for the most recent year
Spreadsheets	eqmult.xls: This spreadsheet allows you to estimate the price earnings ratio for a stable growth or high growth firm, given its fundamentals.
Readings	Malkiel on PE ratios Interest rates and PE ratios PE ratios with R&D Motley Fool on PEG ratios Price to Book Value Bargains For more readings, go here.

Chapter 9: Firm and Enterprise Value Multiples

Topic	Details
Overheads	Download as pdf file
Illustrations	Illustration 9.1: Estimates of Firm and Enterprise Value Illustration 9.2: Estimating Value Multiples for a firm Illustration 9.3: Comparing EV/ Operating Income Multiples - Steel companies Illustration 9.4: Comparing EV/ Capital Ratios - Cosmetic companies Illustration 9.5: Comparing EV/ Sales Multiples - Chemical companies
Data Sets	vebitda.xls: This is a dataset on the web that summarizes value to earnings multiples and fundamentals by industry group in the United States for the most recent year psdata.xls: Dataset on the web that summarizes price to sales and value to sales ratios and fundamentals by industry group in the United States for the most recent year.
Spreadsheets	firmmult.xls: This spreadsheet allows you to estimate firm value multiples for a stable growth or high growth firm, given its fundamentals.
Readings	Value per customer? An analysis of Amazon's value Value to Vision? A New Ratio For more readings, go here.

Chapter 10: Valuing Cash and Cross Holdings

Topic	Details
Overheads	Download as pdf file
Illustrations	Illustration 10.1: Consolidated versus Separate Valuation - All Equity Firm Illustration 10.2: Valuing a Levered Firm with Cash: Gross Debt and Net Debt Approaches Illustration 10.3: Cash Invested at below market rates Illustration 10.4: Discount for Poor Investments in the Future Illustration 10.5: Microsoft's Cash and Marketable Securities Illustration 10.6: Valuing a Closed-end Fund Illustration 10.7: Valuing Holdings in Other Companies
Data Sets	cash.xls: Dataset on the web that summarizes the value of cash and marketable securities by industry group in the United States for the most recent quarter.
Spreadsheets	GrossvsNet.xls: This spreadsheet allows you to reconcile the differences between the Gross debt and Net debt approaches to valuation.
Readings	What is a dollar worth? Should Microsoft pay dividends? For more readings, go here.

Chapter 11: Employee Options and Restricted Stock

Chapter 12: The Value of Intangibles

Chapter 13: The Value of Control

Chapter 14: The Value of Liquidity

Chapter 15: The Value of Synergy

Chapter 16: The Value of Transparency

Chapter 17: The Cost of Distress

Chapter 18: Closing Thoughts

Overheads (in pdf format)

Topic	Chapters
Introduction to Valuation	Chapter 1
Estimating discount rates	Chapter 2
Estimating cash flows	Chapter 3
Estimating growth rate and terminal value	Chapter 4
Discounted Cashflow Valuation: Examples	Chapter 5-6
Relative Valuation	Chapters 7-9
The Value of Cash and Cross Holdings	Chapter 10
Dealing with Employee Options	Chapter 11
The Value of Intangibles	Chapter 12
The Value of Control	Chapter 13
The Value of Liquidity	Chapter 14
The Value of Synergy	Chapter 15
The Value of Transparency	Chapter 16
The Cost of Distress	Chapter 17
Closing thoughts	Chapter 18