Session 3: The Objective in Corporate Finance - Reality

Nice presentation and am happy for watch this video. But I do have one technical question that I want to get your clarification. If we substitute or use firms value instead of stock price in order to measure wealth maximization, how can we measure firms value? I guess the former literatures used stock price to evaluate wealth maximization since it's easy to find the value of stock in the market.  

Firm value is debt plus equity. In common parlance, it is usually measured with enterprise value. You could reframe the objective as maximizing enterprise value.

You are my savior professor.

I am incredibly thankful for this. Watching the rest of your lesson before my final!!! :')

I understand why it's pointless to increase market share for the sake of increasing market share, but what about earnings or revenue?

great effort! thanks for sharing..

I love how nice and clean and straightforward these videos are!!!!

Thank you for sharing so good content.

Very clear ideas, lesson and point, thank you!

Thank you sir. thank you so much. I am really thankful for your work.

Fantastic teacher!

Really I enjoy these classes. In the MBA I took a course in CFM. Many questions and doubts on running a company were clarified in this course. Many situations that I have lived as consultant in many companies seems to fix to many of the descriptions of these clases. Personally I have foun very useful and I have found answer to many questions with the perspective of the Professor Damodaran and his book.

Can someone explain to me why the answer is D for question 5 of the post class test? I would assume that in a illiquid poorly functioning emergent market you should focus on revenue growth since the company is being held up by bond/lender. That would allow the company to survive current market conditions. To max shareholder wealth in a rocky market would be like swimming against the tide.

Answer: Nope. In fact, Disney will adapt a radical cult-like ideology.

It is astounding to listen to these words of wisdom in 2023 while knowing that Iger will stay for another 3 years and much of the current malady of Disney is his making.

What does he mean by market-based decision?

😍

Very glad to have discovered your lessons from years ago. They're straight to the point, empirical and very enlightening. I hope to complete the 36 sessions.