Master
2023/2024
Advanced Business Valuation
Category 'Best Course for Broadening Horizons and Diversity of Knowledge and Skills'
Category 'Best Course for New Knowledge and Skills'
Type:
Compulsory course (Strategic Corporate Finance)
Area of studies:
Finance and Credit
Delivered by:
School of Finance
Where:
Faculty of Economic Sciences
When:
1 year, 3, 4 module
Mode of studies:
offline
Open to:
students of one campus
Instructors:
Egor Gordeychuk,
Svetlana Grigorieva,
Nikita Pirogov,
Irina Skvortsova,
Dmitry Tikhomirov
Master’s programme:
Strategic Corporate Finance
Language:
English
ECTS credits:
6
Contact hours:
72
Course Syllabus
Abstract
The Advanced Business Valuation Course explores both the theoretical basis and practical application of all major elements of discounted cash flow valuation, relative valuation and asset- based valuation. You learn to differentiate between long-term value-creating strategies and short- term indicators, such as market share, earnings per share, share price and others. The course discusses how to evaluate a company’s strategic position and develop forecasts using different techniques. Within this course you consider special cases in valuation such as valuation in emerging capital markets, valuation of companies with changing capital structure, valuation of high levered firms, firms with negative earnings, private firms, and young high-growth firms. You also discuss how to evaluate companies in different industries: mining, telecom, media and finance. Participants are provided with the opportunity to work in small teams to prepare reviews of empirical literature, cases and analytical tasks based on real data. Course prerequisites include courses such as Corporate Finance-1,2, International Financial Reporting Standards.
Learning Objectives
- The key goal of this course is to provide students with sufficient theoretical knowledge and practical experience to be able to value a company using different valuation techniques (DCF, APV, Residual income models, Multiples) in normal and special cases.
Expected Learning Outcomes
- how to apply traditional valuation techniques (DCF, relative valuation and asset based valuation) in emerging capital markets;
- how to apply premiums and discounts in business valuation (control premium, discount for lack of control, discount for lack of marketability)
- how to value firms with changing capital structure and high levered firms;
- the advantages and disadvantages of Residual income models;
- main methods to value company’s intangible assets;
- how to use option pricing methods to value flexibility;
- the specificity of valuing companies in different industries
Course Contents
- 1. Introduction to valuation.
- 2. Premiums and discounts in business valuation.
- 3. Income approach. Valuing companies by cash flow discounting: main steps, models, and problems.
- 4. Income approach. Capitalization methods and residual income valuation methods.
- 5. Market approach. Valuing companies using multiples.
- 6. The role of cost approach in business valuation. Valuation of intangible assets.
- 7. Real options and valuation.
- 8. Corporate valuation in different industries.
Interim Assessment
- 2023/2024 4th module0.25 * Final Exam + 0.13 * Final case + 0.31 * Home assignments + 0.31 * Home assignments
Bibliography
Recommended Core Bibliography
- Damodaran, A. (2012). Investment Valuation : Tools and Techniques for Determining the Value of Any Asset (Vol. 3rd ed). Hoboken, New Jersey: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=442924
- Hitchner, J. R. (2017). Financial Valuation : Applications and Models (Vol. Fourth edition with website). Hoboken, New Jersey: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1506670
- Investment valuation : tools and techniques for determining the value of any asset, Damodaran, A., 2012
- Koller, T., Wessels, D., Goedhart, M. H., & McKinsey and Company. (2010). Valuation : Measuring and Managing the Value of Companies (Vol. 5th ed). Hoboken, N.J.: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=332432
Recommended Additional Bibliography
- Arzac, E. R. (2008). Valuation for Mergers, Buyouts, and Restructuring (Vol. 2nd ed). Hoboken, NJ: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1639464
- Fernandez, P. (2002). Valuation Methods and Shareholder Value Creation. Elsevier. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.eee.monogr.9780122538414
- Juliet Estridge, & Barbara Lougee. (2007). Measuring Free Cash Flows for Equity Valuation: Pitfalls and Possible Solutions. Journal of Applied Corporate Finance, (2), 60. https://doi.org/10.1111/j.1745-6622.2007.00136.x
- Mercer, Z. C., & Harms, T. W. (2008). Business Valuation : An Integrated Theory (Vol. 2nd ed). Hoboken, N.J.: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=208023
- Pereiro, L. E. (2006). The practice of investment valuation in emerging markets: Evidence from Argentina. Journal of Multinational Financial Management, (2), 160. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.a.eee.mulfin.v16y2006i2p160.183
- Rosenbaum, J., & Pearl, J. (2013). Investment Banking : Valuation, Leveraged Buyouts, and Mergers and Acquisitions (Vol. 2nd ed). Hoboken: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=981384
- Valuation : measuring and managing the value of companies, Koller, T., 2005