Narratives and Numbers
The Value of Stories in Business
Aswath Damodaran
Columbia University Press
288 pages; Rs 1,098
As I usually do in my class, let me start with a simple example. Consider a company that will generate an equity free cash flow of Rs 100 next year with a perpetual growth rate (g) of 4 per cent and a cost of capital (CoC) of 10 per cent. Based on these parameters, the equity value today is Rs 1,667. If you increase g by 1 per cent or decrease CoC by 1 per cent, the value jumps 20 per
The Value of Stories in Business
Aswath Damodaran
Columbia University Press
288 pages; Rs 1,098
As I usually do in my class, let me start with a simple example. Consider a company that will generate an equity free cash flow of Rs 100 next year with a perpetual growth rate (g) of 4 per cent and a cost of capital (CoC) of 10 per cent. Based on these parameters, the equity value today is Rs 1,667. If you increase g by 1 per cent or decrease CoC by 1 per cent, the value jumps 20 per
