Equity Instruments and Markets: Syllabus

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Equity Instruments and MarketsSyllabus

• Aswath Damodaran

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General Information

• Office Room 9-94
• Phone [phone]
• E-mail adamodar_at_stern.nyu.edu
• Home Page http//www.stern.nyu.edu/adamodar
• Office Hours
• Tuesday 11.30 -1
• Thursday 11.30 -1
• The fair game principle still applies.
• All classes will be video taped. The video tapes
  will be available in the media center at Bobst
  library about two days after the session.

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Course Objectives

• By the end of this course, you should be able to
• value any publicly traded firm, small or large,
  domestic or foreign, healthy or troubled.
• value a private firm for sale to another person ,
  company or for purposes of going public (as an
  IPO)
• value a division of a firm for sale or purchase
• value the synergy and control in an acquisition
• come up with a value enhancement strategy for a
  firms management
• define, describe, analysze and apply any multiple
  (PE, Value/EBITDA, Price/Book Value...)
• separate fact from fiction, sense from nonsense
  and real analysis from sales pitch in equity
  research reports, valuations and general
  discourse.

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Course Outline

• Topic Session
• Introduction 1-2
• Discounted Cashflow Valuation
• 1. Estimating Parameters 3-6
• 2. Choosing and Using Models 7-9
• 3. Loose Ends in DCF Valuation 10-11
• Relative Valuation 12-17
• Valuing Private Firms 18-19
• Option Pricing Applications in Valuation 20-22
• Valuing Acquisitions 23-24
• Value Enhancement Strategies 25-26
• Review 27

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Make-up Sessions and Other Stuff

• There will be a make-up session for this class on
  Friday, January 22, from 10-11.20 in Schimmel
  Auditorium.

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Required Material

• Lecture Note Packets These are available in
  three parts in the book store.
• Supplementary text Investment Valuation by
  Aswath Damodaran (This book is not required. You
  can buy a book and share with a couple of people,
  if needed, or not buy the book at all.)
• Other Readings
• Wall Street Journal Money and Investing Section
• Barrons
• Forbes

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Grading Basis

• Group Work Students should work in groups of
  five. Each group will be required to work on
  three group projects
• Valuation Project Due in two parts 30
• Part 1 DCF Valuation due in Session 14 (March 4)
• Part 2 Entire project due in Session 27 (April
  29)
• IPO Valuation Due session 21 (April 8) 10
• Individual Work
• Quizzes There will be three quizzes worth 10
  apiece.
• Quiz 1 Discounted Cash Flow Valuation Session
  10 (February 16)
• Quiz 2 Relative Valuation Session 17 (March
  23)
• Quiz 3 Private Company Option Valuation
  Session 23 (April 15)
• Final Exam This will also be an open-book and
  open-notes cumulative exam worth 30.

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Rules of Engagement

• Rules of group work
• Pick your own groups. (If you have trouble
  getting picked, I will help)
• All group work will be self policed, except in
  extreme circumstances.
• There will be one grade per group, no matter how
  the work load is distributed among the group
  members
• Rules on individual work
• All exams and quizzes are strictly individual
  work.
• There will be no make-up quizzes. If you miss a
  quiz for a good reason, the grade will be
  redistributed over the remaining part of the
  course.
• I will be the grader, and I do make mistakes. If
  I screw up, bring it to my attention and I will
  fix it.
• Rules on Participation
• All participation is welcome.