This 26-session equity valuation class will be taped starting January 26,
2005 and the lectures will be available as Real Player files (You can download
Real Player for free by going to http://www.real.com).
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 for the class.
Introduction to Valuation
Part
I: Discounted Cashflow Valuation (272 pages). If you prefer two
slides per page, click here. (Updated for Spring 2005 class)
Part
II: Relative Valuation and Private Company Valuation (228 pages) (If
you prefer two slides per page, click
here) (Updated for Spring 2005 class)
Part
III: Real Options, Acqusition Valuation and Value Enhancement (192 pages) If
you prefer
two
slides per page, click here.(Updated for Spring
2005 class)
Part
IV: Closing Presentation
| Session (Click here) | Topics covered | Lecture notes |
| 1 (1/24/05) | Introduction to Class Approaches to Valuation |
Syllabus for class |
| 2 (1/26/05) | Which valuation approach is right
for you? |
Introduction to Valuation (5-21) Packet 1 (1-10) |
| Weekly Challenge # 1 | Reconciling firm and equity valuation | Weekly challenge Solution |
| 3 (1/30/05) | DCF valuation approaches Estimating Discount Rates - The essence of the cost of equity - Riskfree Rates - Historical Equity Risk Premiums - Country Equity Risk Premiums - Estimating company exposure to country risk |
Packet 1 (11-38) |
| 4 (2/2/05) | Implied Equity Risk Premiums Choosing: Historical versus Implied Premium Estimating Betas - The Regression Approach - The Bottom-up Solution |
Packet 1 (39-59) |
| Weekly Challenge # 2 | Estimating country risk premiums (or) |
Country
premium challenge and solution Implied premium challenge, data and solution |
| 5 (2/7/05) | More on bottom-up betas Estimating the cost of debt - Interest rates, ratings and synthetic ratings - Cost of debt for emerging market companies Cost of capital weights and currency conversion Starting on cashflows |
Packet 1 (59-79) |
| 6 (2/9/05) | Operating Earnings |
Packet 1 (80-95) |
| Weekly Challenge # 3 | Adjusting Operating Earnings |
Weekly challenge Solution |
| 7 (2/14/05) | Capital Expenditures: Acquisitions and R&D Working Capital: Why non-cash? Cashflows to Equity Growth Rates - Historical rates - Analyst Estimates |
Packet 1 (96-125) |
| 8 (2/16/05) | Take the quiz, check out the solution and compare your score to the distribution. Fundamental Growth Rates |
Packet 1 (126-141) |
| Weekly Challenge # 4 | Estimating fundamental growth | Weekly challenge Solution |
| 9 (2/23/05) | Operating Income and reinvestment for young and evolving companies |
Packet 1 (142-162) |
| Weekly Challenge # 4A | Terminal Value Mechanics | Weekly challenge Solution |
10 (2/28/05) |
Dealing with cash and marketable securities Valuing crossholdings - with complete information on cross holding - with incomplete information |
Packet 1 (163-176) |
| 11 (3/2/05) | Employee Options - Fully Diluted and Treasury Stock Approaches - The Value of Options - The Impending Accounting Change |
Packet 1 (177-209) |
| Weekly Challenge # 5 | Dealing with management options | Weekly challenge Solution |
| 12 (3/7/05) | More valuation examples - Valuing the S&P 500 - Valuing Nestle - Valuing an emerging market company |
Packet 1( 210 -238) |
| 13 (3/9/05) | Valuing a family-run company Valuing distressed firms |
Packet 1 (239-264) |
| Weekly Challenge # 6 | Circular Reasoning in DCF valuation | Weekly Challenge Daimler valuation Solution |
| 14 (3/21/05) | Amazon: Valuations in 2000, 2001, 2002 & 2003 Relative Valuation Basics |
Packet 1 (265-End) Packet 2 (1-15) |
| 15 (3/23/05) | Take the quiz, check out the solution and compare your score to the distribution. The Determinants of PE Ratios |
Packet 2 (16- 37) |
| 16 (3/28/05) | More on PE Ratios |
Packet 2 (38-77) |
| 17 (3/30/05) | Relative PE Ratios EV Multiples EV/EBITDA Multiple |
Packet 2 (78-113) |
| Weekly Challenge # 7 | Analyzing the PEGY ratio | Weekly challenge Solution |
| 18 (4/4/05) | Price to Book Ratios EV to Book Capital Ratios Price to Sales Ratios |
Packet 2 (114-150) |
| 19 (4/6/05) | EV to Sales Ratios Value of a Brand Name Choosing the Right Multiple |
Packet 2 (151-187) |
| Weekly Challenge # 8 | Relative Valuation versus DCF valuation | Weekly challenge Solution |
| 20 (4/11/05) | Valuing Private Companies Total Betas versus Market Betas Cashflows for Private Companies |
Packet 2 (188-217) |
| 21 (4/13/05) | Illiquidity Discounts |
Packet 2 (217-228) Packet 3 (1 - 15) |
| Weekly Challenge # 9 | Valuing Private companies | Weekly challenge Solution |
| 22 (4/18/05) | Take the quiz, check out the solution and compare your score to the distribution. Option Pricing Models (contd) |
Packet 3 (16-29) |
| 23 (4/20/05) | Patents as options (continued) |
Packet 3 (30-61) |
| 24 (4/25/05) | Valuing Financial Flexibility Valuing Equity in Troubled Companies |
Packet 3 (62-99) |
| 25 (4/27/05) | Valuing Acquisitions | Packet 3 (100-146) |
| 26 (5/2/05) | Value Enhancement: A compressed Version Closing Thoughts on Valuation |
|
| Take the final exam and check the solutions. | ||