{"level":{"id":3,"slug":"valuation","title":"Level 3 · Valuation","learningObjectives":"Build a simple DCF; calculate a WACC; compare multiples between comparables; estimate a margin of safety.","recommendedPriorKnowledge":null,"expectedOutcomes":"By the end of this level, you can distinguish price from value, apply the main methods for valuing a company (discounted cash flow and comparable multiples), and estimate a reasonable margin of safety before deciding on an investment.","sortOrder":3,"icon":null},"modules":[{"id":19,"levelId":3,"slug":"introduction-to-valuation","title":"Introduction to valuation","learningObjectives":"Understand the difference between price and value, and get an overview of the valuation methods this level will develop in detail in its next modules.","recommendedPriorModuleId":null,"expectedOutcomes":"By the end of this module, you can distinguish price from value, and identify the two main families of valuation methods that will be developed in the level's next modules.","sortOrder":1},{"id":20,"levelId":3,"slug":"dcf","title":"DCF","learningObjectives":"Understand the full logic of the discounted cash flow method: projecting a company's future cash flows, bringing them to present value, and understanding why the result is so sensitive to the starting assumptions.","recommendedPriorModuleId":null,"expectedOutcomes":"By the end of this module, you can explain how a company's cash flows are projected and discounted, what terminal value is and why it concentrates so much value, and why a DCF is so sensitive to its assumptions.","sortOrder":2},{"id":21,"levelId":3,"slug":"multiples","title":"Multiples","learningObjectives":"Know the three most-used valuation multiples (P/E ratio, EV/EBITDA, P/B), how to choose reasonable comparable companies, and why a low multiple doesn't always indicate an investment opportunity.","recommendedPriorModuleId":null,"expectedOutcomes":"By the end of this module, you can interpret the three main multiples, choose comparables with sound judgment, and recognize when a low multiple reflects a value trap instead of an opportunity.","sortOrder":3},{"id":22,"levelId":3,"slug":"wacc-and-cost-of-capital","title":"WACC and cost of capital","learningObjectives":"Understand how to precisely calculate the cost of capital that earlier modules (ROIC, DCF) used as a general figure: the cost of debt, the cost of equity (CAPM), and their weighted combination in the WACC.","recommendedPriorModuleId":null,"expectedOutcomes":"By the end of this module, you can explain what the cost of debt and the cost of equity are, how the latter is estimated with CAPM, and how the two are combined to obtain the WACC.","sortOrder":4},{"id":23,"levelId":3,"slug":"intrinsic-value","title":"Intrinsic value","learningObjectives":"Understand what a company's intrinsic value is -- the synthesis of what the DCF and the multiples estimate -- and why it should be treated as a reasoned estimate, never as an exact figure.","recommendedPriorModuleId":null,"expectedOutcomes":"By the end of this module, you can explain what intrinsic value is, how it relates to the DCF and multiples already covered, and why it should be treated as a reasoned range rather than a single figure.","sortOrder":5},{"id":24,"levelId":3,"slug":"margin-of-safety","title":"Margin of safety","learningObjectives":"Understand why investing with a margin of safety reduces the risk of an estimation error, and how to apply it to a real purchase decision by comparing a company's price with its estimated intrinsic value.","recommendedPriorModuleId":null,"expectedOutcomes":"By the end of this module -- and Level 3 as a whole -- you can explain what the margin of safety is and why it reduces estimation risk, and apply it to a real purchase decision without treating it as a guarantee of return.","sortOrder":6}]}