Corporate Finance Spring 2024 - Session 10: Bottom up Betas - Private Businesses

Master Corporate Finance: From Risk & Valuation to Capital Structure & Real-World Strategy

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What you'll learn

Analyze corporate decisions using the principles of shareholder wealth maximization and its alternatives.
Estimate the cost of capital for a firm using risk models, betas, and debt costs.
Evaluate investment projects and acquisitions using cash flow analysis and capital budgeting techniques.
Determine the optimal mix of debt and equity financing and design appropriate dividend policies.

This course includes

34.5 hours of video
Certificate of completion
Access on mobile and TV

Summary

Keywords

Corporate Finance

Full Transcript

In this quiz-shortened class, we started by looking at the process of estimating betas for the remaining public companies in the mix, with financial service companies being treated a little differently, because debt is impossible to nail down, and levering and unlevering betas is tough to do. We also examined how to estimate the cost of equity of a private company, and why it may be higher than an otherwise equivalent public company. Slides: https://pages.stern.nyu.edu/~adamodar/podcasts/cfspr24/session10slides.pdf Post class test: https://pages.stern.nyu.edu/~adamodar/pdfiles/cfovhds/session10test.pdf Post class testsolution: https://pages.stern.nyu.edu/~adamodar/pdfiles/cfovhds/session10soln.pdf (If these links don't work, try a different browser...)