I teach corporate finance, valuation and investment philosophies at the Stern School of Business at New York University. I have online versions of all three courses here, as well as other finance-related videos. 1. The Corporate Finance Online playlist has an introductory video and 36 sessions that cover all of corporate finance (at least as I see it). 2. The Valuation playlist has 25 sessions that cover valuation approaches, issues and questions.3. The Investment Philosophies playlist has sessions that cover different investment philosophies.4. The Accounting and Statistics playlists reflect my quirky and unorthodox introductions to two disciplines that are critical to my valuation and corporate finance classes.5. The Blog Posts playlist has sessions that go wit my blog posts and reflect my standing as a dabbler, rather than expert, in all things finance-related. If you need the supporting material for any of the classes, check the links below.Links:Corporate finance materials: http://www.stern.nyu.edu/~adamodar/New_Home_Page/corpfin.htmlValuation materials: http://www.stern.nyu.edu/~adamodar/New_Home_Page/equity.htmlInvestment Philosophies: http://www.stern.nyu.edu/~adamodar/New_Home_Page/invphil.htmBooks: http://www.stern.nyu.edu/~adamodar/New_Home_Page/public.htmMy website: http://www.damodaran.com
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Session 12: Last Loose Ends and Narrative and Numbers
Monday, September 28, 2026 • Duration 01:34:20
Today, we put the last three loose ends to rest. First, well looked at complex businesses and how to incorporate our concerns into value. The, we went back and looked at defining debt. While we used a narrow definition of debt, when computing cost of capital, we argued for using a broader definition of debt, when subtracting from firm value to get to equity value. Next, we talked about how best to deal with both currently outstanding employee options and potential options grants in the future. With the former, we argued for using an option pricing model to value the options and netting that value out of equity value, before dividing by the number of shares outstanding. With the latter, we suggested incorporating the expected cost into the operating expenses, thus lowering future earnings and cash flows. If you are still a little shaky on why stock-based compensation should not be added back as a non-cash expense, please read this post:http://aswathdamodaran.blogspot.com/2014/02/stock-based-employee-compensation-value.htmlWe then started on the discussion of numbers and narratives, i.e., the process of connecting stories to valuations and used Uber as an example. If you are interested in reading more about this process, try this blog post:http://aswathdamodaran.blogspot.com/2014/06/numbers-and-narrative-modeling-story.html Start of the class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/looseends2.pdfSlides: http://www.stern.nyu.edu/~adamodar/podcasts/valfall16/valsession12.pdfPost class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session12test.pdfPost class test solution: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session12soln.pdf
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Session 25: Valuation, the final frontiers!
Sunday, September 27, 2026 • Duration 01:33:00
In today’s session, we continued on the question of how best to value a company by first looking at the four key components of value - cash flows from existing investments, growth in the future, discount rates and the terminal value. With cash flows, we noted the contrast between cash flows to equity and cash flows to the firm, with the former being after debt payments and the latter before. With discount rates, we argued that the same discount rates that we computed for investment hurdle rates can be used in valuation, with the caveat that these discount rates will change over time, as a company changes. While you can adjust betas, costs of debt and debt ratios, a simpler way to target a cost of capital in stable growth is to look at the median cost of capital for companies. The median cost of capital for a global company now is about 9.6%, in US dollar terms. With growth, the key is recognition that growth comes from what companies do in terms on how much they reinvest and how well, rather than from outside sources. Finally, for terminal value, I argued that the growth rate in perpetuity has to be less than or equal to the risk free rate. Since you will be valuing companies in different stages in the life cycle, I would like you to use the spreadsheet linked below:http://www.stern.nyu.edu/~adamodar/pc/fcffsimpleginzu.xlsxAs you can see, the valuation is built around revenue growth, operating margins and sales to capital ratios, all variables we spent time talking about in class today.Slides: https://pages.stern.nyu.edu/~adamodar/podcasts/cfspr23/session25slides.pdfPost class test: https://pages.stern.nyu.edu/~adamodar/pdfiles/cfovhds/postclass/session25test.pdfPost class test solution: https://pages.stern.nyu.edu/~adamodar/pdfiles/cfovhds/postclass/session25soln.pdf
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Session 27: Acquisition End Game and Value Enhancement
Sunday, September 27, 2026 • Duration 01:27:02
In this class, we continued to make a case against acquisition practices, with transaction multiples, accretion and defensive deals all under fire, before looking at the narrow pathways to generating value from acquisitions (go small, buy private, focus on cost synergies). We then started our discussion of value enhancement, by drawing a contrast between price and value enhancement. With value enhancement, we broke down value change into its component parts: changing cash flows from existing assets, changing growth rates by either reinvesting more or better, lengthening your growth period by creating or augmenting competitive advantages and lowering your cost of capital. We then used this framework to compute an expected value of control as a the product of the probability of changing the way a company is run and the value increase from that change (optimal - status quo value).Start of the class test: https://pages.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/valenh.pdfSlides: https://pages.stern.nyu.edu/~adamodar/podcasts/valUGspr23/session27slides.pdfPost class test: https://pages.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session27Atest.pdfPost class test: https://pages.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session27Asoln.pdf
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Session 10: Growth Estimates and Terminal Value
Sunday, September 27, 2026 • Duration 01:34:19
We started today’s class by talking about estimating sustainable growth in all its forms, from per share equity to operating income and closed the growth section by looking at the most general way of estimating cash flows, starting with revenue growth, moving to operating margins and ending with reinvestment. The heart of today's class, though, was the discussion of terminal value. We began by ruling out using multiples to get terminal values, at least in the context of intrinsic value. To keep terminal values in check, you have to follow four basic rules/principles:1. Constrain your terminal growth rate to be less than or equal to your riskfree rate (which is a proxy for long term growth in the economy)2. Don't wait too long to put your company into stable growth (and try not to push past 10 years)3. The key input in your terminal value computation is your return on capital (and excess return assumption). If your return on capital = cost of capital, your terminal growth rate does not add any value.4. Give your company the characteristics of a stable growth company in terms of excess returns and cost of capital.Start of the class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/termvalue.pdfSlides: http://www.stern.nyu.edu/~adamodar/podcasts/valfall16/valsession10.pdfPost class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session10test.pdfPost class test solution: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session10soln.pdf
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Session 25: Acquisitions (continued) and Value Enhancement
Sunday, September 27, 2026 • Duration 01:33:42
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Session 9: Analyst Estimates of Growth and Fundamental Growth first steps
Saturday, September 26, 2026 • Duration 59:52
The good news is that the first quiz is over and I will let you know as soon as it is ready to be picked up. If you were able to hang in there mentally and physically, we continued our discussion of growth by first looking at the limitations of analyst estimates of growth and then examining the fundamentals that drive growth. Starting with a very simple algebraic proof that growth in earnings has to come either from new investments or improved efficiency, we looked at how best to estimate growth in three measures of earnings: earnings per share, net income and operating income. With each measure of earnings, the estimation of growth boiled down to answering two questions: (1) How much is this company reinvesting to generating for future growth? (2) How well is it reinvesting? (3) How much growth is added or lost by changes in returns on existing investments? In the next session, we will continue this discussion. No start of the class testSlides: http://www.stern.nyu.edu/~adamodar/podcasts/valfall16/valsession9.pdf
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Breach of Trust: Decoding the 2023 Banking Crisis
Saturday, September 26, 2026 • Duration 40:07
It has been an eventful year for banking, with large banks (SVB, Signature and First Republic) all falling like dominos, leaving investors unsettled and regulators off balance. That said, markets have been remarkably resilient through this crisis, suggesting that markets are either in denial or that they have concluded that this is a crisis with relatively small systemic risks. I am a dabbler in banking, and as a novice, I start with basics by looking at the structure of the banking business, with the intent of not only finding the value drivers but also the risk exposure. I use that structure to evaluate how the unprecedented rise in rates in 2022 affected banks, both in good ways (by making their low or no interest deposit base more valuable) and bad ways (by reducing the values of their loans and investment securities). I also look across the bank failures of the year, looking for patterns, and conclude that it is deposit stickiness that seems to be the prime factor. I close by looking at some of the determinants of this stickiness and why bank regulators will have to incorporate these measures into future regulations.Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/Banks2023.pdf
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Deutsche Bank: A Greek Tragedy at a German Institution?
Saturday, September 26, 2026 • Duration 21:59
Deutsche Bank, in addition to having a long and storied history, is a German bank, and the Germans, with their reputation for precision, are viewed as good bankers. Thus, Deutsche's troubles not only over the last few weeks but stretching across the last few years have been unsettling to investors. With the stock down 80% (as of October 4, 2016), it looks like a contrarian bet, but I value Deutsche reflecting the new reality that faces them (big losses, capital shortfalls, possibility of a bailout) and make my investment judgment (Sorry, but you have to watch the video to the end to get that!)Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/DeutscheBank.pdfValuation: http://www.stern.nyu.edu/~adamodar/pc/blog/DeutscheBank2016.xlsBlog Post: http://aswathdamodaran.blogspot.com/2016/10/deutsche-bank-greek-tragedy-at-german.html
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Good (Bad) Banks and Good (Bad) Investments: At the right price...
Saturday, September 26, 2026 • Duration 42:48
Following up on my last session, where I drew a contract between good and bed banks, in this one, I look at the contrast between a good banking investment and bad one, iwith banking pricing taking center stage. A good bank that you overpay for is a worse investment than a bad bank that you get at a bargain price. I look at intrinsic valuation in the context of a bank, arguing that you can only value equity (as opposed to operating assets or enterprise value) at a bank and then developing a model, based upon regulatory capital, to estimate free cash flows to equity. I also looking at pricing banks, noting the reasons why price to book ratios have deep roots in analyses, and compare banking price to book ratios across time and across the cross section. I close with a pricing of the 25 biggest US banks and disclose that I will be adding Citi, a bank trading at half its book value, a pricing discount that makes this stodgy, low growth bank into a good investment. Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/BanksInvestments.pdfValuation of Citi: https://pages.stern.nyu.edu/~adamodar/pc/blog/CitiVal2023.xlsx
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Venture Capital: It is a pricing, not a value, game!
Friday, September 25, 2026 • Duration 21:14
Vas price companies, they don't value them, and that is exactly what you should expect them to do, given how success is measured in the business. That pricing, though is based upon small samples of companies, where price updating is infrequent and transactions are opaque. That makes VC pricing noisy, biased and lagged. Those limitations, though, are what give the very best VCs an edge over the rest.Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/VCPricing.pdfBlog Post: http://aswathdamodaran.blogspot.com/2016/10/venture-capital-it-is-pricing-not-value.html
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