Session 21: Closing up pricing, asset based valuation and private company valuation

In this session, we closed the book on relative valuation by looking at how to pick the "right" multiple for a valuation, with the answers ranging from cynically picking one that best fits your agenda to picking one that reflects what managers in that business care about. It is amazing how widespread relative valuation is. I found this link recently on rules of thumb in valuation. http://www.bizstats.com/reports/valuation-rule-thumb.phpWe then moved on to 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. We ended the class by starting on a discussion of what makes private company valuation tricky, i.e., the absence of a market price, the opacity and unevenness of financial statements and how motive can affect valuation and we will continue with this discussion in the next session.Start of the class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/assetvaluation.pdfSlides: http://www.stern.nyu.edu/~adamodar/podcasts/valUGspr17/session21.pdfPost class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session21Btest.pdfPost class test solution: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session21Bsoln.pdf Learn more about your ad choices. Visit megaphone.fm/adchoices