30257 - CORPORATE VALUATION

Knowledge of basic financial accounting and basic corporate finance is encouraged.

The course aims at providing students with: - The conceptual and theoretical framework surrounding valuation issues. - The practical tools to address such topics in real-life situations. The main methodologies of corporate valuation are analyzed and the approaches commonly used by practitioners (financial analysts, investment and merchant banks, consulting firms) are critically discussed. Examples focus on corporate valuation issues using DCF, stock market and deal multiples completed by industry-specific as well as case-specific valuation techniques.

• Theoretical framework.
• Business plan and cash flow projections.
• Assessing risk profile. Cost of capital: data sources and estimate.
• Relationships between leverage and discount rates.
• Discounted cash flow (DCF): assets and equity side valuation. Terminal value calculation.
• Adjusted present value (APV).
• Comparative valuation: theoretical framework.
• Stock market multiples. Value maps. Deal multiples.

Know the conceptual and theoretical framework surrounding valuation issues and the practical tools to address such topics in real-life situations. Course participants benefit from:

• Analytical application on how to prepare and interpret Discounted Cash Flow (DCF) analysis in a variety of contexts.
• Knowledge and comprehension on how to prepare comparable, fundamental and relative value analysis.
• Understanding how to apply the above analysis and comparison of the outcomes of these analytical approaches.

• Identify the most appropriate methods and approaches to a valuation, based on its final aim.
• Apply the different methodologies for valuing companies and make reliable assumptions.
• Choose the most suitable database as well as determine which key features should be adopted in the implementation of the identified methods.
• Prepare valuation memorandum compliant to international standards.

• Face-to-face lectures
• Guest speaker's talks (in class or in distance)
• Exercises (exercises, database, software etc.)
• Case studies /Incidents (traditional, online)
• Group assignments

The course is mainly based on front classes. A limited number of external interventions also occur, which allow an overview of how to structure valuations in different business scenarios (major banks, cfo from industrial corporations, etc.). Team-based activities (group homeworks) increase knowledge of the main databases available for valuation purposes as well as of the connections between business and financial skills.

With the purpose of measuring the acquisition of the above mentioned learning outcomes, the students assessment is based on two main components:

• in class participation and group assignment (20% of the final grade) aimed at testing the student’s ability to identify the most appropriate methods and approaches, choose the most suitable data sets, make reliable assumptions, and prepare a valuation memorandum compliant to international standards.
• written exam (80% of the final grade). The written exam consists of exercises and open questions aimed at assessing students’ ability to apply the different methodologies for valuing companies, to apply and interpret DCF analysis in a variety of contexts, to prepare comparable and relative value analysis.

M. MASSARI, G.GIANFRATE, L. ZANETTI, Corporate Valuation: Measuring the value of companies in turbolent times, Wiley, 2016.