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Executive Valuation

 


Description and Syllabus
This is a class about valuing assets that will cover the spectrum both in terms of the types of assets and firms that we will value but also in terms of the different approaches to valuation. You can get the syllabus for the class by clicking here.

Project Description
You will be doing a DCF valuation of your firm, developing a value enhancement strategy and estimating a relative value for your firm. You can get a project description by clicking here. You can get sample project reports from previous years by clicking here, here, here or here.

Textbook and Lecture Notes

The choices for books for this class are either Investment Valuation (second edition) or Damodaran on Valuation (second edition). The books are backed up by with online data and material. You can get to either book's home page by clicking here.
The lecture notes will be provided as a packet in class and are also available in pdf format below.

Pre-reading

There is no required pre-reading for the class. If you do want to get a jump on the class, you can start on the lecture notes or text book early. If your tools are a little rusty, you may want to review the primers on present value, accounting and statistics that I have on my web site.

Session Descriptions

Sessions 1,2 and 3: Basics of DCF Valuation
Outline: These sessions will cover all aspects of DCF valuation, from the structure of the models to estimating inputs - cash flows, growth rates and discount rates.
Lecture Notes:
You can download the pdf version of the overheads used for this session by clicking here
Examples:
You can download the valuation of Titan Cement in excel format by clicking here and the valuations of Amazon by clicking here for 2000, 2001 and 2002.

   
Practice Problems
DCF valuation problems

Session 4: Value Enhancement and Loose Ends in Valuation

Outline: This session will complete the discussion of discounted cash flow valuation and then move on to a discussion of value enhancement from a DCF framework and examine the loose ends that often stymie valuations.
Lecture Notes:
You can download the pdf version of the overheads used for this session by clicking here

   
Supporting Spreadsheets
EVA Valuation

Spreadsheet Home Page

Practice Problems
Old Quizzes

Solutions

 

Session 5: Relative Valuation

Outline: This session will cover multiples and how they are used and misused in practice.
Lecture Notes:
You can download the pdf version of the overheads used for this session by clicking here

   

Session 6: Option Pricing Applications in Valuation

Outline: This session will cover the use of real options in valuation.
Lecture Notes:
You can download the pdf version of the overheads used for this session by clicking here

   
Practice Problems
Option pricing problems