Class Logistics and Structure
1:15:51The Bermuda Triangle of Valuation
1:17:16Valuation Approaches (Continued) and First Steps on Intrinsic Value
1:17:50The DCF Big Picture and First Steps on Risk-Free Rates
1:17:38Finishing up Riskfree Rates and Moving on to Risk Premiums
1:17:02Implied Equity Risk Premiums
1:18:22Betas, Relative Risk and First Steps on Cost of Debt
1:17:16Cost of Capital Closure + First Steps on Cash Flows
1:19:56Tax Rates, Cap Ex and Working Capital
1:18:35FCFE Closure and First Steps on Growth
1:49:10Closure on Growth and First Steps on Terminal Value
1:33:01The Terminal Value
44:54Loose Ends in Valuation
1:20:42Last Loose Ends + First Steps on Storytelling
1:17:17More Storytelling and First Company Valuations
1:16:58Valuing the market and companies across the life cycle
1:17:09Valuing Declining, Emerging Market and Financial Service companies
1:34:58Intrinsic Value Closure and Pricing Beginnings
1:27:59Pricing Continued
1:17:10Tariff Talk
46:44Pricing Analytics and Peer Groups
1:16:15Pricing Closure and Asset-based Valuation/Pricing
1:17:37Valuing Declining, Emerging Market and Financial Service companies
Kerschner Family Chair in Finance Education
Professor Damodaran examines the distinct challenges in valuing declining and emerging market companies, then critically assesses traditional dividend discount models for financial service firms. He proposes an alternative Free Cash Flow to Equity (FCFE) approach for banks, anchored to regulatory capital investment.
In this class, we continued discussing companies on the dark side of valuation. First, we talked about valuing declining and emerging market companies, and the challenges we face with each, before turning our attention to financial service firms For decades, we have valued banks using the dividend discount model, simply because getting cash flows is so difficult, but that approach is built on trusting management at banks to behave sensibly (paying out what they can afford to in dividends) and regulators to do the same. For me, that trust was breached in 2008, and I present a way of estimating FCFE for a bank, using investment in regulatory capital as my stand in for reinvestment. In the first session after the break, we will wrap up the valuation section and start on pricing. If you are interested in reading more about valuing financial service companies, try this link:
Valuing the market and companies across the life cycle
Next · Lecture 18Intrinsic Value Closure and Pricing Beginnings