Episode Details

In this class, we started by completing our rationale for using bottom up betas, instead of a single regression beta, and continued with the cost of debt and computing debt ratios for companies and how to deal with hybrid securities.. If you are interested in getting updated default spreads (on the cheap or free), try this site:
https://content.naic.org/pbr_data.htm
Click on PBR and that link will give you end spreads, they do update the numbers monthly, but seem to do an awfully poor job of making the spreadsheet findable. You can also try the St. Louis FRED and find updated on seven major ratings classes (AAA, AA, A, BBB, BB, B, C and lower) updated daily. Neat, right? You can get the spreads from Bloomberg as well, using the FIW function, and tweaking the choices to show all corporate spreads. We then started on our discussion of free cashflows, with an examination of the differences between free cash flows to equity and free cash flow to the firm. If you are still confused, I do have a post on free cash flows that I did a couple of years ago that might help:
https://aswathdamodaran.blogspot.com/2022/10/earnings-and-cash-flows-primer-on-free.html

Start of the class test: https://pages.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/cftests.pdf
Slides: https://pages.stern.nyu.edu/~adamodar/podcasts/valspr24/session7slides.pdf
Post class test:
https://pages.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session7test.pdf
Post class test solution: https://pages.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session7soln.pdf

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