Corporate Valuation (2225.YR.001656.1)

General information

Type:	OBL	Curs:	1	Period:	S semester
ECTS Credits:	3 ECTS

Teaching Staff:

Group	Teacher	Department	Language
Year 1	Jos Van Bommel	Economía, Finanzas y Contabilidad	ENG

Lectures: 30%
Independent work: 70%

Whether it's managing a portfolio, preparing for an imminent merger or acquisition, or marveling over the newest dollar figure attached to a tech wunderkind, valuation is the key to parsing and understanding the numbers. Taught by Professor José Abad, Corporate Valuation (a mandatory course in the MSc in Finance) has been designed to train students seeking a deeper understanding of valuation by equipping them with the required toolkit to become analysts, financial officers, or portfolio managers.

Through a series of lectures, students will learn how to estimate the value of any business, small or large, private or public, in a developed or an emerging market. They will also be able to price businesses using earnings, book value, revenue, or other pricing multiples and comparables.

During this course, participants will:

- Gain the skills needed to estimate the value of any business, small or large, private or public, in a developed or an emerging market.

- Learn to use earnings, book value, revenue, or other pricing multiples and comparables to price any business.

- Grow your confidence with numbers and develop the storytelling skills you need to complement your numerical skills.

1. Introduction to Valuation (I) Course Introduction. Valuation: The Big Picture. Introduction to Intrinsic Value. The Risk Free Rate. The Equity Risk Premium. Relative Risk Measures. The Costs of Debt and Capital

2. Introduction to Valuation (II) Estimating Cash Flows. Estimating Growth. Terminal Value. Value Enhancement.

3. Loose Ends Loose Ends #1: From Asset Value to Equity Value. Loose Ends #2: Acquisition Ornaments. Loose Ends # 3: Dilution & Illiquidity. Narrative to Numbers: Connecting Stories to Value

4. Relative Valuation The Pricing Imperative: Relative Valuation. The Most-Used Multiple: PE Ratio. Other Earnings Multiples. Book Value Multiple. Revenue Multiples and Mopping Up.

5. Other Valuation Methods and Topics Asset Based Valuation. Private Company Valuation. The Essence of Real Options. The Option to Delay. The Option to Expand & Abandon.

6. Special cases (I): M&A and LBOs

7. Special cases (II) Valuing/Pricing Start-Ups & Young Companies. Valuing/Pricing Declining & Distressed Companies. Valuing/Pricing Financial Service Companies. Valuing/Pricing Cyclical & Commodity Companies.

8. Valuation: Looking Back & Looking Forward.

Sessions in this course have a strong focus on applied learning. This course is oriented to developing capabilities to understand financial concepts and applied them in the appropriate context. Lectures are oriented towards solving real valuation challenges.

Stylized cases/exercises are used as pedagogical instrument for theoretical presentation as well as exercises are available for students in order to practice some technical aspects.

Lectures will combine professor exposition and students' participation in class. Case pre-resolution will be needed

ASSESSMENT BREAKDOWN

Damodaran A. Damodaran on valuation. Wiley Finance 2015
Koller T., M. Goedhart and D. Wessels. Valuation. McKinsey & Company. Wiley 2015.
Rosenbaum and Pearl. Investment Banking: Valuation, LBOs and M&A. Wiley 2016

Group	Teacher	Department
Year 1	Jos Van Bommel	Economía, Finanzas y Contabilidad