APPLIES TO ACADEMIC YEAR 2014/2015

ENT 3502 Investment, valuation and exit strategies

Responsible for the course
Pål Berthling-Hansen

Department
Department of Accounting - Auditing and Law

Term
According to study plan

ECTS Credits
7,5

Language of instruction
Norwegian

Introduction
The programme has a strong focus on economic assessments. This also involves an ability to value various strategies and companies based on different assumptions. One fundamental theme is valuation based on cash flows, risks and the present value method. It is important that one manages to see the connection with project analysis as well as the differences from company valuation. Even though the starting point is much the same there are some vital differences which it is important to keep in mind.

Learning outcome
Acquired knowledge
The students shall gain an understanding of the central concepts included in business valuations. It’s important that they learn about the various valuation methods and how they are connected. This entails an understanding of concepts such as results, cash flow, risk, required rate of return, financing, contribution methods, strategy and market, exit models upon transfers, as well as markets for financing.

Acquired skills
After having completed the course the students shall be able to make a concrete valuation of an enterprise and be able to assess which methods that are suitable under various circumstances. This involves an ability to apply topics such as risk, the capital asset pricing model, beta, cash flow, earnings, expected values, residual values. The students shall also develop the ability to assess various types of financing.

Reflection
The applied models usually involve various types of assumptions. It is important that students develop a critical ability to consider their own analyses when this is relevant.

Prerequisites
Basic business economics and accounting.

Compulsory reading
Books:
Bøhren, Øyvind og Per Ivar Gjærum. 2009. Prosjektanalyse : investering og finansiering. Rev. utg. Fagbokforlaget
Damodaran, Aswath. 2010. The dark side of valuation : valuing young, distressed, and complex businesses. 2nd ed. Upper Saddle River, N.J. : Financial Times Press

Recommended reading

Course outline

• Interest calculation
• Cash flows
• Risk and required rate of return
• Contribution methods
• Valuation models
• Financing methods
• Sale of enterprises
• Financing market