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 6: Implied Equity Risk Premiums (FINC-UB)
This lecture delves into the dynamics of implied equity risk premiums (ERP), analyzing factors that cause them to fluctuate and comparing ERPs across markets, including bonds and real estate. It stresses alignment with current implied premiums for valuation.
In this session, we started by doing a brief test on the relationship between prices and risk premiums. We spent the rest of the class about the dynamics of implied equity risk premiums and what makes them go up, down or stay unchanged. We then moved to cross market comparisons, first by comparing the ERP to bond default spreads, then bringing in real estate risk premiums and then extending the concept to comparing ERPs across countries. Finally, I made the argument that you should not stray too far from the current implied premium, when valuing individual companies, because doing so will make your end valuation a function of what you think about the market and the company. If you have strong views on the market being over valued or under valued, it is best to separate it from your company valuation. I am attaching the excel spreadsheet that I used to compute the implied ERP at the start of February 2025. Play with it when you get a chance.
Start of the class test: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/ImplPremNew.pdf.pdf
Slides: https://nyu.box.com/s/ks89xqizlae0hrk1edrev64yu0hk8ngg
Session 7: Betas, Relative Risk and First Steps on Cost of Debt (FINC-UB)
Next · Lecture 18Session 5: Finishing up Riskfree Rates and Moving on to Risk Premiums (FINC-UB)