Corporate and Equity Valuation:
Every Valuation Tells a Story 

Aswath Damodaran, NYU

Video Recording
Slides

Aswath's website (has links to pdfs of his courses and books) 

Aswath's YouTube channel where you can take his courses

Abstract:
This talk will address the process of valuing companies and financial equities by weaving together narrative and numbers.

The Key Questions of valuation are:

• What are the cash flows from existing assets?

  • Equity: Cash flows after debt payments

  • Firm: Cash flows before debt payments

• What is the value added by growth assets?

  • Equity: Growth in equity earnings/ cash flows

  • Firm: Growth in operating earnings/cash flows

• How risky are the cash flows from both existing assets and growth assets?

  • Equity: Risk in equity in the company

  • Firm: Risk in the firm’s operations

• When will the firm become a mature firm, and what are the potential roadblocks?

Bio: 

My name is Aswath Damodaran. I am a Professor of Finance at the Stern School of Business at New York University. I teach the corporate finance and valuation courses in the MBA program as well as occasional short-term classes around the world on both topics. I received my MBA and Ph.D degrees from the University of California at Los Angeles. My research interests lie in valuation, portfolio management and applied corporate finance. My papers have been published in the Journal of Financial and Quantitative Analysis, the Journal of Finance, the Journal of Financial Economics and the Review of Financial Studies, though I am sure that the list of people who have read these articles is a short one.

I do like to write. I have written four books on equity valuation (Damodaran on Valuation, Investment Valuation, The Dark Side of Valuation, The Little Book of Valuation) and two on corporate finance (Corporate Finance: Theory and Practice, Applied Corporate Finance: A User’s Manual). I also co-edited a book on investment management with Peter Bernstein (Investment Management) and I have two books on portfolio management - one on investment philosophies (Investment Philosophies) and one titled Investment Fables.  I also have a book, titled Strategic Risk Taking, which is an exploration of how we think about risk and the implications for risk management. My newest book, Narrative and Numbers, was published in January 2017.

If you asked me to describe what I do, I am first and foremost a teacher - not an academic, a professor or an authority on any topic. I learned to teach when I was a visiting lecturer at the University of California, Berkeley, from 1984 to 1986, where I received the Earl Cheit Outstanding Teaching Award in 1985. I have been at NYU since 1986, received the Stern School of Business Excellence in Teaching Award (awarded by the graduating class) in 1988, 1991, 1992, 1999, 2001, 2007 and 2008, 2012 and 2016, and was the youngest winner of the University-wide Distinguished Teaching Award (in 1990). I was profiled in Business Week as one of the top twelve business school professors in the United States in 1994, a testimonial to weak competition. Not recognizing the error of their ways, Business Week did a poll of MBAs in 2011 that named me the most popular business school professor in the country (globe, universe.. who knows?). Needless to say, I love teaching and I hope it shows.