Equity Valuation

Objective

  • Value the equity of a firm or project

Reading

  • Chapter 18: Equity Valuation

Assignment

  • Equity Valuation

Relative Valuation

Aswath Damodaran @ NYU

The Dividend Discount Model

FCF Valuation

Review

  • Sources vs Uses of Cash @ ATM
  • Net Working Capital @ Edspira
  • The Weighted Average Cost of Capital (WACC) @ Edspira
  • Free Cash Flow to the Firm @ Edspira

DCF using FCFF

DCF using Free Cash Flow to Equity

Sustainable Growth Rate @ ATM

Terminal Value

Aswath Damodaran @ NYU

Alternative Models

  • Economic Value Added (EVA)
  • Modified Residual Income
  • Equity as an Option
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