In today's class, we closed the book on relative valuation by looking at how to price young companies, using forward multiples, and 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. Take a look at it.... especially the multiples mentioned www.bizstats.com/reports/valuation-rule-thumb.php We 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. If you are interested in a more extensive assessment of companies like United Technologies, you may find this reading useful: papers.ssrn.com/sol3/papers.cfm?abstract_id=1609795 Start of the class test: www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/relval3atest.pdf Slides: www.stern.nyu.edu/~adamodar/podcasts/valUGspr21/session21slides.pdf Post class test: www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session21Btest.pdf Post class test solution: www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session21Bsoln.pdf

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