COURSE OUTLINE
The objective of this course is to develop a detailed understanding of the tools used by market professionals and corporate managers to estimate the value of companies and stocks. The central theme of the course will be the pricing of equity securities using discounted cash flow and relative valuation procedures. Students are asked to apply what they’ve learned to the valuation of a specific company, with the goal of becoming an expert on that field.
Damodaran A, Investment Valuation (3rd Edition).
It has almost all of thE material of the class (barring the more recent updates) and has problems at the end of every chapter. It follows the standard script of valuation, looking at different valuation models with twists. http://www.wiley.com/WileyCDA/WileyTitle/productCd-1118130731.html
Learning Objectives
After completing this course, students should be able to:
a. Identify and interpret the key value drivers for a firm or industry.
b. Develop quantitative models for firm and equity valuation based on DCF and multiples.
c. Identify and interpret accounting and non-accounting information necessary for valuation.
d. Critically analyze firm and equity valuation models and assumptions developed by others.
e. Present valuation analyses and assumptions in a professional manner
The final part of the course (3 CFU) will be offered in the form of seminaries dedicated to the presentation of several case studies of mergers and acquisitions.
Prerequisites
1) ESSENTIAL OF CORPORATE FINANCE (Finance 101 BA level)
2) CORPORATE FINANCE (Finance 201 -MS 1 year)
Teaching Methods
Lectures, Project
Further information
Rules of Engagement
• Rules of group work:
o Pick your own groups.
o All group work will be self policed, except in extreme circumstances.
o There will be one grade per group.
• Rules on individual work
o All exams and assignment except the group work are strictly individual work.
o If you miss the midterm due to health problem, the grade will be redistributed over the remaining part of the course.
For further rules of engagements, grading policies and honor code please refers to the UNIFI Website.
Attendance
Class attendance is essential to your success in this course. In class interaction and examples enrich the hands-out and the book materials and it allows you to have a better understanding of the discipline. The signature on the periodically circulated attendance roster will determine attendance.
Type of Assessment
The grading is based on the final project content and presentation.
The final project is a valuation exercise designed as a group assignment. There will be only one grade for each group.
Topic Materials
Course overview. M&A introduction Slides set: Intro
Motives in M&A and Valuations issues Slides set: Intro
- Introduction to valuation INVVAL Chapters 1 & 2 and Slides set: S00
INTRINSIC VALUATION
-DCF Valuation: Estimating Parameters: Cash Flows + Growth INVVAL Chapters 8,9 & 10 and Slides set: S01
-DCF Valuation: Estimating Parameters WACC INVVAL Chapters 4 & 7 and Slides set: S02
-DCF Valuation: + Valuation Examples part 1 Slides set S04
- DCF Valuation: + Valuation Examples part 2 Slides set S04
RELATIVE VALUATION
- Intro to Relative Valuation INVVAL 17 Slides set S05 part 1
- Relative Valuation part 1 INVVAL 18 and Slides set: S05 part 2
-Relative Valuation part 2 INVVAL 18 & 19 and Slides set: S06
- Relative Valuation part 3 INVVAL 19 & 20 and Slides set: S07 B
- Private firms and Acquisitions INVVAL 25 and Slides set: S08