GRA 6538 Applied Valuation
GRA 6538 Applied Valuation
The central objective of this course is to establish a framework that puts you in a position to make managerial decisions based on an understanding of corporate value creation, corporate value destruction, and on how to enhance the former while avoiding the latter. Case discussions and visitors will be used to illustrate how corporate valuation is related to managerial decision making.
The course builds on the valuation concepts and skills developed in the Corporate Finance course. We will revisit all the valuation techniques that you were exposed to in the core course and introduce some new techniques. The emphasis will be to establish a good understanding of when one valuation technique works better than another.
To accomplish this, we will examine corporate valuation in a variety of settings: Initial Public Offerings, large investment projects, mergers and acquisitions, emerging markets, and private equity. The main insights will emerge from the process of making and defending your decisions based on the corporate valuations you will be doing throughout the course.
Throughout the course we discuss the following list of classical finance issues and put them in perspective of valuation framework:
- Time Value of Money
- Simulation Analysis
- Analysis of Principal Financial Statements
- Analysis of Taxes
- Analysis of Off-Balance-Sheet Assets and Liabilities
- Analysis of Business Combinations
- Ratio and Financial Analysis
- Analysis of Inventories and Long–Lived Assets
- Analysis of Debt
- Analysis of Inter–Corporate Investments
- Financial Reporting System
- Capital Investment Decisions
- Working Capital Management
- Mergers and Acquisitions and Corporate Restructuring
- Corporate Governance
- Private Equity/Venture Capital Valuation
At the end of the course you should be able to:
- See the relationships between value estimates, bidding strategies, and market values.
- Master the following valuation approaches: Enterprise Discounted Cash Flow (DCF), Adjusted Present Value, Equity DCF, traded- and transaction multiples.
- Understand when and why a particular valuation approach may be better than other in a particular situation.
- Structure an investment using project financing.
- Analyze historical performance and understand the importance of value drivers.
- Understand why economic value analysis (such as EVA) is a useful management/consulting tool.
Ability to think critically about sources of value creation, ability to integrate valuation techniques in decision making process, ability to critically evaluate investment proposals containing valuation discussion taking both manager and investor perspectives.
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Four lectures on discounted cash flows, use of valuation result in competitive markets, free cash flow calculation, cost of capital (debt and debt equivalents), multiples valuation, and core value drivers, recognition of off-balance sheet assets and liabilities, tax related cash flows, working capital management, and capital investment decisions.
- Six classes using business cases. The cases are used to explore issues related to corporate valuation in settings that includes initial public offerings, large investment projects, mergers and acquisitions, and leveraged buyouts/management buyouts/private equity/venture capital, managerial flexibility and real options.
- Two classes with visiting speakers from the private equity industry and/or major consulting firms.
Please note that while attendance is not compulsory in all courses, it is the student’s own responsibility to obtain any information provided in class that is not included on It's learning or text book.
This is a course with continuous assessment (several exam components) and one final exam code. Each exam component is graded by using points on a scale from 0-100. The components will be weighted together according to the information in the course description in order to calculate the final letter grade for the examination code (course). Students who fail to participate in one/some/all exam elements will get a lower grade or may fail the course. You will find detailed information about the point system and the cut off points with reference to the letter grades when the course start.
At resit, all exam components must, as a main rule, be retaken during next scheduled course.
All courses in the Masters programme will assume that students have fulfilled the admission requirements for the programme. In addition, courses in second, third and/or fourth semester can have specific prerequisites and will assume that students have followed normal study progression. For double degree and exchange students, please note that equivalent courses are accepted.
| Assessments |
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Exam category: Activity Form of assessment: Class participation Weight: 20 Grouping: Individual Exam code: GRA65383 Grading scale: Point scale leading to ECTS letter grade Resit: All components must, as a main rule, be retaken during next scheduled course |
Exam category: Submission Form of assessment: Written submission Weight: 20 Grouping: Group (3 - 6) Duration: 2 Week(s) Comment: 3 case write-ups Exam code: GRA65383 Grading scale: Point scale leading to ECTS letter grade Resit: All components must, as a main rule, be retaken during next scheduled course |
Exam category: Submission Form of assessment: Written submission Invigilation Weight: 20 Grouping: Individual Support materials:
Duration: 1 Hour(s) Comment: Mid-term examination with supervision Exam code: GRA65383 Grading scale: Point scale leading to ECTS letter grade Resit: All components must, as a main rule, be retaken during next scheduled course |
Exam category: Submission Form of assessment: Written submission Invigilation Weight: 40 Grouping: Individual Support materials:
Duration: 2 Hour(s) Comment: Final written examination with supervision Exam code: GRA65383 Grading scale: Point scale leading to ECTS letter grade Resit: All components must, as a main rule, be retaken during next scheduled course |
A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 6 ECTS credits corresponds to a workload of at least 160 hours.