Episode Details

We started class today by finishing up the discussion of connecting stories to numbers, and how critical it is to keep the feedback loop open. We also looked at how stories can change or break. In that context, you might find this post that I had on how earning reports change stories useful:
https://aswathdamodaran.blogspot.com/2014/08/reacting-to-earnings-reports-narrative.html
We then looked at valuing a simple company (Con Ed) with a simple model (stable growth DDM) and how a market crisis can change value (with 3M). We then moved on to with a, model to value an index (the S&P 500). If you are interested in an updated version, where you can change the numbers try this link:
https://pages.stern.nyu.edu/~adamodar/pc/blog/S&P500ValueJan2024.xlsx
We then looked at valuing young companies, with the focus on Amazon. If you are interested in how best to adapt valuation models to value companies on the dark side. Specifically, we examined how best to value young companies with limited information. If you are interested, try this paper on valuing young companies:
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1418687
I also have a blog post that you may find relevant for today’s discussion on how dilution in future years is already incorporated into value:
http://aswathdamodaran.blogspot.com/2018/07/share-count-confusion-dilution-employee.html

Start of the class test: https://pages.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/dcfvaltests.pdf
Slides: https://pages.stern.nyu.edu/~adamodar/podcasts/eqspr24/session14slides.pdf
Post class test:
https://pages.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session14Ctest.pdf
Post class test solution: https://pages.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session14Csoln.pdf

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