This class started with a look at a major investment banking valuation of a target company in an acquisition and why having a big name on a valuation does not always mean that a valuation follows first principles. We began our intrinsic value discussion by talking about the weapons of mass distraction. If you want to read the blog post I have on the topic, try this link:
http://aswathdamodaran.blogspot.com/2014/03/if-it-is-strategic-growth-investment-in.html
After setting the table for the key inputs that drive value – cash flows, growth, risk, we looked at the process for estimating the cost of equity in a valuation. In particular, we broke down risks into different types and argued that only some of these risks belong in discount rates, if investors are diversified.
Start of the class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/kennecott.ppt
Slides: http://www.stern.nyu.edu/~adamodar/podcasts/valspr19/session3slides.pdf
Post Class Test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session3test.pdf
Post Class Test Solution: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session3soln.pdf

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