Session 22: Pricing Closure and Asset-based Valuation/Pricing
1:17:37Session 21 (UG) and Session 19 (MBA): Pricing Analytics and Peer Groups
1:16:15Session 20: Tariff Talk
46:44Session 19: Pricing Continued
1:17:10Session 18: Intrinsic Value Closure and Pricing Beginnings
1:27:59Session 17: Valuing Declining, Emerging Market and Financial Service companies
1:34:58Session 16: Valuing the market and companies across the life cycle
1:17:09Session 15: More Storytelling and First Company Valuations (FINC-UB)
1:16:58Session 14: Last Loose Ends + First Steps on Storytelling (FINC-UB)
1:17:17Session 13: Loose Ends in Valuation (FINC-UB)
1:20:42Session 12: The Terminal Value (FINC-UB)
44:54Session 11: Closure on Growth and First Steps on Terminal Value (FINC-UB)
1:33:01Session 10: FCFE Closure and First Steps on Growth (FINC-UB)
1:49:10Session 9: Tax Rates, Cap Ex and Working Capital (FINC-UB)
1:18:35Session 8: Cost of Capital Closure + First Steps on Cash Flows (FINC-UB)
1:19:56Session 7: Betas, Relative Risk and First Steps on Cost of Debt (FINC-UB)
1:17:16Session 6: Implied Equity Risk Premiums (FINC-UB)
1:18:22Session 5: Finishing up Riskfree Rates and Moving on to Risk Premiums (FINC-UB)
1:17:02Session 4: The DCF Big Picture and First Steps on Risk-Free Rates (FINC-UB)
1:17:38Session 3: Valuation Approaches (Continued) and First Steps on Intrinsic Value (FINC-UB)
1:17:50Session 2: The Bermuda Triangle of Valuation (FINC-UB)
1:17:16Session 1: Class Logistics and Structure (FINC-UB)
1:15:51Session 12: The Terminal Value (FINC-UB)
This lecture scrutinizes the terminal value in DCF models, discussing constraints such as the risk-free rate as a proxy for nominal economic growth and the role of steady-state return on capital in determining long-term value.
In this quiz-shortened session, we looked at the elephant in the DCF room, the terminal value, and laid out broad constraints that keep it in check. In particular, we looked at why the riskfree rate is a proxy for nominal growth in the economy, why you should not wait too long to put your company into stable growth, and why it is not growth, but steady-state return on capital is what determines terminal value. We closed the class by looking at the choices you face in building valuation models, and how you make them.
Slides: https://nyu.box.com/s/ua9xkqyud18dj6yuciidistbbeuwdi41
Post class test: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session12Btest.pdf
Post class solution: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session12Bsoln.pdf
Session 13: Loose Ends in Valuation (FINC-UB)
Next · Lecture 12Session 11: Closure on Growth and First Steps on Terminal Value (FINC-UB)