Equity valuation without DCF
28 Apr 2026
13:00 -14:15
Times are shown in local time
Open to: All
Room W2.02 (Cambridge Judge Business School)
Trumpington St
Cambridge
CB2 1AG
United Kingdom
Join our Finance seminar
Speaker: Professor Christopher Polk, London School of Economics
About the seminar topic
We introduce ‘discounted alpha’ – a novel framework for equity valuation. By correcting market prices rather than discounting long-horizon cash flows, our approach delivers lower-variation, better-performing estimates of a stock’s value. Applying our estimates, we find that private equity funds capture substantial CAPM misvaluation, both initially at buyout and subsequently at exit, and that fundamental buy-and-hold funds tilt toward characteristics that predict underpricing but not short-term alphas. Furthermore, biased beliefs embedded in analyst estimates appear to be an important driver of model-implied price distortions. Yet despite these pockets of misvaluation, firm equity values are ‘almost efficient’ by Black’s (1986) definition.
Speaker bio
Christopher Polk is a Professor of Finance at the London School of Economics (LSE) and former Director of the Financial Markets Group. Prior to joining the LSE, Polk taught at Northwestern University’s Kellogg School of Management; he has also been a visiting Professor of Economics at Harvard University and a visiting Professor of Finance at the Sloan School of Management, Massachusetts Institute of Technology. Polk’s research interests are in asset pricing and include related topics in asset management, corporate finance, behavioural finance, and macroeconomics. His recent research has focused on incorporating stochastic volatility into asset pricing models and developing new methods to measure price-level distortions in capital markets.
Polk has published extensively in leading academic journals, including the Quarterly Journal of Economics, the Journal of Finance, the Journal of Financial Economics, and the Review of Financial Studies. He has won numerous professional awards, including the paper of the year at the Journal of Financial Economics in both 2002 and 2018. Polk has advised the Bank of England, Norges Bank, and the EU European Securities and Markets Authority on topics related to his research. He has been an Associate Editor at the Journal of Finance and served as a member of the Norges Bank Investment Management Allocation Advisory Board. Polk currently sits on the LSE Investment Subcommittee that advises the investment activity of the School’s Endowment.
Polk holds a BSc in physics and economics from Duke University and a PhD in finance from the University of Chicago’s Booth School of Business where he studied under the 2013 Nobel laureate in Economic Sciences, Eugene Fama.
Register
No registration required. If you have any questions about this seminar, please email Bet Brooke.