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Introduction

The Applied Valuation course is essential for students seeking careers in Private equity, Consulting, Investment banking, Corporate finance, and Asset management. It is practical, consists of targeted lectures, case-based approach and includes industry expert talks on selected topics.

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. We examine how ESG and SDG concepts relate to the firm value by influencing cashflow or discount rate forecasts.

Course content

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 and relate to what is currently used in the finance industry. To accomplish this, we will examine corporate valuation in a variety of settings: Private equity, Mergers and acquisitions, Initial public offerings, Large investment projects, and emerging markets. 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:

• Relationship between ESG performance and value
• 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
• Value in sustainability, in ESG categories and in the SDG goals

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, Economic Profit, traded multiples, and transaction multiples.
• Understand when and why one valuation approach may be better than another.
• 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.