Class in Session: Equity Valuation with Professor Damodaran

I just discovered that Professor Aswath Damodaran is teaching his equity valuation class this spring and webcasts of his classes are available free online. I discovered the new webcasts when I was searching for a valuation spreadsheet to analyze US Bancorp. Just like when I was back in college, I’m once again late for class.

Never the less, I plan on going through all the video class sessions over the next few months.  Would anyone be interested in join me? Maybe we could start a study group here for members of Fat Pitch Financials.  Let me know in the comments section if you are interested.

Professor Damodaran’s course covers the following topics:

  • Approaches to Valuation
  • Discounted Cashflow Valuation: Equity versus Firm
  • Reconciling firm and equity valuation
  • The Riskfree Rate
  • Historical Risk Premiums
  • Country Risk Premiums
  • Company Exposure to Country Risk
  • Implications for multinationals
  • Implied Equity Risk Premium
  • Introduction to Betas
  • Bottom up Betas
  • Cost of Debt
  • Weights for Cost of Capital
  • Dealing with hybrids
  • Getting earnings right
  • Reinvestment needs – Cap ex and working capital
  • Debt cashflows and Cash flow to Equity
  • Historical Growth Rates
  • Analyst Estimate of Growth
  • Fundamental Growth in EPS
  • Fundamental Growth in Equity Earnings
  • Fundamental Growth in Operating Income
  • Revenues and Margins: High Growth Firms
  • The Terminal Value Computation
  • Terminal Value Dynamics
  • Loose Ends in Valuation
  • Dividend Discount Model and Implied Growth Rates
  • Valuing the Entire Market
  • FCFE Models and Emerging Market Risk
  • Circular Reasoning in DCF Models
  • The value of corporate governance
  • Valuing distresssed companies
  • Valuing Young Companies
  • PE Ratios
  • More on PEG Ratios
  • EV Multiples (FCFF, EBIT and EBITDA)
  • Book Value Multiples
  • Revenue Multiples
  • Relative Valuation versus DCF Valuation
  • Valuing Private Companies

Along with the webcasts, there is also a three part course packet that includes the overhead slides for the lectures. The packet is divided into the following three parts:

I look forward to working through this course since Damadoran wrote the book on stock valuation. I’ll share highlights of what I discover with you here.

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