nation
-
School
--
A
Y
MASTERCLASS
I-
E
i
-
3 pillars
of DCF
Heylos!
-
-
to
series
"Valuation
on
In
this
3
If you
Masterclass"
have thrown light
part, I
different
and
-
part 2 of 30 part
welcome
on
-
->
methods
of valuations
pillars of Def valuation
missed the 1st part-link
above.
is in
the
post
save
this
post to Revise again.
Fifferent
-
methods of valuation
ation
-
↓
1.
Intrinsic
valuation
-
to
2. Relative
Pricing
-
valuation
3.
Real
option
valuation
understand each of
est
I
them
e
Intrinsic valuation
1.
-
As
name
internally
-
i.e.
-
suggest, it is derived
within the company.
through
the
data
internally
company eg
generated by
free cash flow, growth, Risk etc
-
Note
-
No
the
-
Benchmarking (comparison)
with the peers
is being done in
Intrinsic valuation.
2.
-
-
-
Relative
Pricing valuation
->
Benchmarking/comparison with
other companies is being done here.
How
our
on
other
company
is
priced,
companies traded
based
in
mit
similar to Real estate, if you haveto
sell a plot,
you will first
enquire about similar plot sold
recently
in the
vicinity
3. Real option
You
-
to
know,
This
-
-
valuing Netflix and got
are
to enter
valuation
they
china.
in
could
might get permission
substantially
it
the valuation. However,
increase
is still
uncertain.
-
In Real option
"Entry
to
valuation,
china"as
a
we
call
and then perform valuation
Black scholes model.
consider
option
through
-
3
pillars
This is
a
of DCF valuation
generic DCF model
ezt...... En
↳,
where value
of firm today
is
future cash
Present value of its
flows.
3
-
pillars
Whenever
DCF
of DCF valuation
you
need to
perform
-
a
valuation. Be mindful of
three
things.
Risk
Growth
-
-
If
3
you
are
parameters;
able to
DCF is
control
these
yours forever
Let's understand this ->
1.
-
Cash
what
-
the
-
current
company?
Is there
to
-
is
earnings
of
needed
any adjustment
purify the earnings?
conversion
cash flows.
of
earnings to
2.
-
Growth
once the
flows
cash
current year's
is established.
-
we
need
growth
-
consider
to
in
these
would
long
growth peaod?
How
future
cash flows.
be
high
the
terminal
&
-
what
would
year growth?
be
3.
-
-
Risk
pillar,
we
In this
in
the Risk
need to consider
growth
of these
Cash flows
-
-
is
Risk in
DCF
through
"Discount Rate".
valuation
factored
Therefore discount Rate should
be consistent with the cash flow.
Don't worry;
will
I
cover these
in detail
what
-
-
Do
a
Read
you
need to do?
I
genic google search
aboutthese
3
methods
in
detail.
-
we
will
Session
answer
be
wednesday
on
all
having
Linkedin LIVE
your queries
Don't
miss that.
10pm to
and doubts.
ST
to
this
-
to
this
SAVE
Revise later.
-
-
follow
-
See
you
Session
help others.
your
Parth for
man
premium
content.
tomorrow
on
with
Rate.
re
a
detailed