Multimedia Presentation Recorded 17 Nov 2015
The Cost of Capital
The Most Misunderstood, Misestimated, and Misused Number in Finance
Overview
In this informative and engaging presentation, Aswath Damodaran provides a thorough review of the derivation and application of the cost of capital. Damodaran explains why the cost of capital (COC), the Swiss Army knife of finance, is not only misunderstood but also widely misused, what the roles of the COC are in corporate finance and valuation, how to reconcile the different uses of the COC, and what we would like to capture with each COC input and the difficulties of estimation given noisy data.
About the Speaker(s)
Aswath Damodaran is the Kerschner Family Chair Professor of Finance at the Stern School of Business at New York University, where he teaches corporate finance and valuation to MBAs, executives, and practitioners. He is the author of five books on valuation, three books on corporate finance, and three books on portfolio management, and he was co-editor of the book Investment Management with Peter Bernstein. Professor Damodaran has published articles in a number of journals, including the Journal of Financial and Quantitative Analysis and the Journal of Finance. He was named the most popular US business school professor in a 2011 survey by Businessweek. Professor Damodaran also writes a popular blog, Musings on Markets. He holds an MBA and a PhD from the University of California, Los Angeles.