1 of 4

BOONE BOWLES

HOW DO I VALUE EQUITY?

MODULE 5

2 of 4

Agenda

  1. What is equity?

​

  • Can I value cash flows go to equity holders?

​

  • Can I value equity using other cash flows?

​

  • Why not just use the balance sheet?

​

  • Are there any shortcuts to equity valuation?

​

  • What have we learned here?

2

3 of 4

What did we learn here?

  1. What is equity?
    • Ownership and residual claim.
  2. Can I value cash flows go to equity holders?
    • Dividend, Gordon, Total Payout.
  3. Can I value equity using other cash flows?
    • DCF model to get Enterprise Value.
  4. Why not just use the balance sheet?
    • Asset-based valuation—floor.
  5. Are there any shortcuts to equity valuation?
    • Valuation by multiples.
  6. What have we learned here?
    • We can value anything, but what about r.

3

4 of 4

WHERE BUSINESS MEETS LEADERSHIP