re: High level finance class is a new level of intense

Yeah, I feel the only thing that really comes close to "value" in an absolute sense is intrinsic value arrived at by discounting cash flows. And even once you arrive at that for a publicly traded company, is that really value? Is the corporation going to distribute those cash flows to shareholders? Because that's what you're assuming if you're relying on that methodology. What if they reinvest those cash flows but at a lower return than your IRR? What if they reinvest at your IRR, but the market doesn't recognize that value? That's why I think the most conservative way to value a public company is to use a DDM model and then treat any multiple expansion as pure upside. That would be more consistent with how PE values a business, wherein the PE owner both projects cash flows and then sees to it those cash flows actually end up in its pocket at the end of each period. The only way to mimic that in the public markets is to rely on dividends as the primary value driver. That would be the surest way to ensure you're going to hit your target return irrespective of the vicissitudes of the market.

PE is also more pure in the sense that it allows you to use leverage at the HoldCo level to lower your cost of capital and enhance returns in ways that aren't available to most public market investors. You simply have many more tools in your arsenal through which to extract value in the private markets. Sure, you're giving up the liquidity that comes with owning publicly-traded securities, but in exchange you get a more objective source of value (actual cash) than the market-driven factors you're forced to rely on in the public markets. In my opinion, that more than offsets any form of liquidity discount you'd apply to a private security relative to a public security, yet public securities still tend to trade at a premium over private securities. The ultimate form of arbitrage is to extract your base value in the private market from actual cash flows, and then extract your terminal value via some sort of public exit (IPO, etc.). It's the best of both worlds.