Damodaran invites you to the ‘dark side’ of DCF valuations

BVWireIssue #108-1
September 14, 2011

Aswath Damodaran, Professor of Finance at the NYU Stern School of Business, is teaching one class this year—valuation—and you are invited to attend.  In a recent blog post, the Professor explains how you can sign up, access lecture notes, watch webcasts, get emails, and even take quizzes and exams. An excerpt from his summary:

While the class is centered around intrinsic valuation (or discounted cash flow valuation, if you prefer to use its applied form), … I am a firm believer that intrinsic value matters….Consequently, you will hear me talk a lot about the limitations of discounted cash flow valuation and what I see as its dark side. In addition, a significant portion of the class is devoted to multiples and comparables (what I term relative valuation), since it is the dominant approach used by analysts to value companies. I do also bring in the role that option pricing has played in valuation, in the form of real options. Thus, I try to make this class as broad as possible in terms of approaches covered and businesses valued. My objective is that you should be able to value any asset or business, using any approach, and from any perspective (investor, acquirer, appraiser), by the end of this class.

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