This 26-session equity valuation class will be taped starting January 30, 2012, 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 2012 class)
Part
II: Relative Valuation and Private Company Valuation (202 pages) (If
you prefer two
slides per page, click here (Updated for Spring 2012 class)
Part
III: Real
Options, Acqusition Valuation and Value Enhancement (174 pages) If
you prefer two
slides per page, click here(Updated for Spring 2012 class)
Part
IV: Closing Presentation
This page will include the webcasts from the current class. The webcasts
can be accessed in one of three ways:
Streaming video (The file will be streamed to your computer. This will
work only if you have a good internet connection, but should be of the
best quality)
Video podcast (The .m4v file will be downloaded to your computer and you
can watch the video using Quicktime or video software or on your iPod)
Audio podcast (The .mp3 file will be downloaded as an audio file and can
be played on any audio player)
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.
If you want to join the Coursekit page for this class (or just lurk), here
is the link.
The emails related to this class can be accessed here.
Session (Click here) | Topics covered | Lecture notes |
Introduction to Class |
Syllabus
for class |
|
Valuation bias: A test and my solutions | Introduction to Valuation (pg 5-End) Packet 1: 1-8 |
|
Valuation: How much detail? Valuation approaches DCF: Valuation choices |
||
Weekly challenge # 1 |
Reconciling firm and equity valuation | Weekly challenge #1 Solution |
Cash flow consistency: A test (Congoleum) | CDS Spreads |
|
Cash flow consistency Discount Rates - How much do they matter? - Cost of equity basics - Riskfree Rate |
||
Risk Premiums: A test | Packet 1: 34-49 | |
Equity risk premiums - Historical risk premiums and their limitations - Country risk premiums - Estimating company risk exposure to country risk |
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Weekly Challenge # 2 | Country risk and risk premiums | Weekly challenge # 2 Solution |
Implied Equity Risk Premiums: A test | Packet 1: 50-70 | |
Implied equity risk premiums Betas - The perils of regression betas - Alternatives to beta - Bottom up beta |
||
Betas and cost of capital: A test | Packet 1: 70-90 | |
Bottom up Betas Cost of equity: The big picture Cost of debt Cost of capital |
||
Weekly Challenge # 2a | Implied Premium versus Riskfree Rate |
Implied premium challenge, data and solution |
Cash flows: A test | Tax rate by country and industry Packet 1: 91-110 |
|
Cash flows - Steps in assessing cash flows - Accounting Earnings - Taxes |
||
Weekly Challenge # 3 | Adjusting Operating Earnings |
Weekly challenge Solution & Synthetic rating |
Growth rates I: A test | Packet 1: 111-137 | |
More on cash flows - Net Cap Ex - Change in working capital - Cash flows to equity Growth rates - Historical growth rates - Analyst estimates of growth |
||
Take the first quiz and check out the solution as well as the distribution of grades for the class. | Packet 1: 138-156 | |
Fundamental growth rates - The drivers of growth - New Investment (sustainable) growth - Efficiency growth |
||
Weekly Challenge # 4 | Estimating fundamental growth |
Weekly challenge Solution |
Terminal Value: A test | Packet 1: 156-177 | |
Closing thoughts on growth Terminal value Choosing the right model Loose ends in Valuation |
||
Loose Ends: A test | Packet 1: 178-205 | |
Valuing cross holdings & complexity Dealing with debt Management options |
||
Weekly Challenge # 5 | Terminal Value | Weekly challenge Solution |
DCF valuation: A test | Packet 1: 206-228 | |
Final thoughts on management options Dividend discount model valuation Valuing financial service companies Valuing the S&P 500 |
||
DCF Valuation II: A test | Packet 1: 229-247 | |
Valuing poor corporate governance The effect of R&D on value Valuing young, growth companies Valuing declining and distressed companies |
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Weekly Challenge # 6 | Circular Reasoning in DCF valuation | Weekly Challenge Daimler valuation Solution |
Relative valuation I: A test | Packet 1: 248-End Packet 2: 1-7 |
|
Dealing with Distress in Valuation Dealing with Uncertainty in Valuation Relative Valuation: Introduction |
||
Relative valuation II: A test | Packet 2: 8-35 | |
Deconstructing multiples |
||
Take the second quiz and check out the solution as well as the distribution of grades for the class. | Packet 2: 36-56 | |
PE ratio comparisons across companies PE market regression Comparing PE to expected growth rate The basics of PEG ratios |
||
Relative Valuation III: A test | Packet 2: 57-95 | |
PEG ratios: Determinants EV multiples EV/EBITDA |
||
Relative Valuation III: A test | Packet 2: 96-145 | |
PBV ratios Revenue Multiples Forward Multiples Value of a Brand Name |
||
Private Company Valuation: A test | Packet 2: 146-178 | |
Choosing a multiple Relative versus DCF valuation Private company valuation - The importance of motive - Discount rates, cash flows and value |
||
Weekly Challenge # 8 | Relative Valuation versus DCF valuation | Weekly challenge Solution |
Private Company Valuation II: A test | Packet 2: 173-End Packet 3: 1-13 |
|
Private company valuation - Dealing with illiquidity - The key person discount - Illiquidity - IPO valuation Real Options: Introduction |
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Real Options 1: A test | Packet 3: 14-45 | |
Option Pricing Basics The option to delay - A patent as an option - Implications |
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Take the third quiz and check out the solution as well as the distribution of grades for the class. | Packet 3: 46-68 | |
Valuing a natural resource company The value of the option to expand Valuing the option to abandon Valuing financial flexibility |
||
Real Options 2: A test | Packet 3: 69-99 | |
Valuing equity as an option - Basis - Implications |
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Acquisitions: A test | Packet 3: 100-133 | |
Acquistion Valuation - A short and sorry history - Acquisition errors - Valuing Synergy |
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Value Enhancement: A test | Packet 3: 134-155 | |
Value enhancement - Versus Price Enhancements - Mechanisms - The Expected Value of Control |
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26 (5/7/12) Webcast, streamed (need a good internet connection) |
Dante meets DCF: Ten common valuation errors Closing thoughts |
Closing Presentation Spreadsheet with summaries |
The Final Exam | Take the final and check out the solution as well as the distribution of scores for the final. |