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Session 20: Asset-based valuation and Intro to Private Company Valuation
Description
In this session, we looked at asset based valuation: liquidation valuation, accounting valuation and sum of the parts valuation. Specifically, we focused on when it makes sense to value a company by valuing its assets and what pitfalls to avoid. If you are interested in a more extensive assessment of companies like United Technologies, you may find this reading useful:
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1609795
We then started our discussion of the valuation of private companies by noting how the lack of a market price for a business can affect your valuation in implicit and explicit ways, and then arguing that the value you attach to a private business can depend on why/for whom you are doing the valuation.
Start of the class test: https://pages.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/assetvaluation.pdf
Slides: https://www.stern.nyu.edu/~adamodar/podcasts/valspr23/session20slides.pdf
Post class test: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session20Atest.pdf
Post class test solution: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session20Asoln.pdf
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