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Valuation Seminar

 

This is a two-day valuation seminar that I teach once a year at the Stern School of Business in New York. This recorded version is from 2022.

Pre-seminar work: There is no required pre-reading for the class. If you do want to get a jump on the class, check out this pre-seminar webpage.

To follow the seminar: You will see the link to the webcast in the first column, the contents for the session in the second column, additional files in the third and in-practice webcasts on specific estimation challenges (estimating risk free rates, betas, equity risk premiums) in the last one.

After you finish the seminar: Check out this post-seminar webpage. It contains the excel spreadsheets with all the valuations that we did in class, readings to exhaust you and more fun stuff!!

Project: You will be valuing a company, as your project for the class. You can pick any company, public or private, but if you do pick a private company, please make sure that you can get the financial data you need for your company. You can get the project description by clicking here.

Lecture Notes/Textbook: The lecture notes for this class can be obtained by clicking here (if you want the powerpoint version, click here). If you feel the urge to supplement these notes with a book or books, you have the following choices: Investment Valuation (3rd Edition), Damodaran on Valuation (2nd Edition), The Dark Side of Valuation (2nd Edition) and The Little Book of Valuation (1st Edition). You can find out more about these books by clicking here.

Session

Topic

Additional files

In-practice webcasts

Day 1

Morning Session

- YouTube (no restrictions)

* Part 1 & Part 2
- Audio

* Part 1 & Part 2

Lecture Notes: Pg 1-17

Introduction to valuation

Valuation approaches

Amgen ,Tata Motors & Arcelik

 

Valuations

  1. Amgen valuation
  2. Tata Motors valuation
  3. BASF valuation
  4. Enka valuation

 

 

  1. Bias and Preconceptions; The Biggest Challenge to Valuation

     

Day 1

Afternoon Session

- YouTube

* Part 1 & Part 2
- Audio

* Part 1 & Part 2

Lecture Notes: Pg 18-58

Riskfree Rates
Equity Risk Premiums

Cost of Capital

Cash flows & growth rates

Terminal Value
Loose end in valuation

 

 

Datasets

  1. Implied ERP
  2. Sector average betas
  3. Effective tax rates
  4. Cost of capital by sector
  1. Risk free rate
  2. Implied ERP
  3. Bottom up Beta
  4. Lease converter
  5. Debt & Cost of Debt
  6. R&D converter

Day 2

Morning Session

- YouTube

* Part 1 & Part 2
- Audio

* Part 1 & Part 2

 

Lecture Notes: Pg 59-105

- Loose ends in valuation
- Dark Side of Valuation
* Valuing young companies

* Valuing declining companies
* Valuing banks

Datasets
  1. Excess Returns by sector
  2. Historical growth rate

Valuations

  1. Amazon in 2000
  2. Deutsche Bank in 2016
  3. Citi in 2023

 

  1. ROIC estimator
  2. Terminal Value Check
  3. Company valuation spreadsheet (non-financial service)
  4. Bank valuation spreadsheet (Dividends and Bank FCFE)

 

Day 2

Afternoon Session

- YouTube

* Part 1 & Part 2
- Audio

* Part 1 & Part 2

 

 

Lecture Notes: Pg 106-End
Valuing commodity companies

Valuing private businesses
Stories and Numbers
Valuation as a Craft
Pricing companies

Datasets
  1. Variances in firm & equity value by sector

 

  1. Company valuation spreadsheet (non-financial service)
  2. Valuing Employee Options