Home Videos Aswath Damodaran Session 11 (MBA): Cost of Capital & First Steps on Investment Analysis

Aswath Damodaran Session 11 (MBA): Cost of Capital & First Steps on Investment Analysis

When you purchase through our sponsored links, we may earn a commission. By using this website you agree to our T&Cs.

Aswath Damodaran Session 11 (MBA): Cost of Capital & First Steps on Investment Analysis

 

Published on Mar 9, 2016

We started the class by completing the last pieces of the cost of capital puzzle: coming up with market values for equity (easy for a publicly traded company) and debt (more difficult). We then began our discussion of returns by emphasizing that the bottom line in corporate finance is cash flows, not earnings, that we care about when those cash flows occur and that we try to bring in all side costs and benefits into those cash flows. Defining investments broadly to include everything from acquisitions to big infrastructure investments to changing inventory policy, we set the table for investment analysis by setting up the Rio Disney investment. We will return to flesh out the details in the next session (after the break).
Slides: http://www.stern.nyu.edu/~adamodar/po…
Post class test: http://www.stern.nyu.edu/~adamodar/pd…
Post class test solution: http://www.stern.nyu.edu/~adamodar/pd…

Our Editorial Standards

At ValueWalk, we’re committed to providing accurate, research-backed information. Our editors go above and beyond to ensure our content is trustworthy and transparent.

Aswath Damodaran
Editor

Want Financial Guidance Sent Straight to You?

  • Pop your email in the box, and you'll receive bi-weekly emails from ValueWalk.
  • We never send spam — only the latest financial news and guides to help you take charge of your financial future.