Corporate Valuation

The course aims to provide participants with advanced knowledge and insight into business valuation. It covers the foundations of valuation, from the role of valuation under different investment philosophies, to common techniques and models for estimating a firm’s value. We also discuss the value enhancement process, and valuation in the context of mergers and acquisitions. The course contains the following modules:

Module 1: Corporate valuation

This module covers the fundamentals in valuation, including different models and techniques such as dividend-discount models, FCFE, FCFF and valuation using multiples. It also provides a guide to carrying out a complete valuation using the discounted cash flow valuation approach. The first step is to understand the company’s past performance, growth and risk, as well as to identify its key value drivers. Students will learn to analyze a company’s performance based on relevant information from the financial statements and other public sources. We will discuss potential adjustments to reported number and these adjustments’ effect on financial ratios. Next is to forecast the firm’s future performance, taking into account the firm’s growth potential and risk profile. The students will learn to estimate the firm’s free cash flows, costs of capital, firm value and stock value. The students will have the opportunity to apply the discussed concepts and techniques to a real-world case.

Module 2: Valuation from an M&A perspective and Value enhancement

The different classification of mergers and acquisitions will be discussed together with processes and steps in M&A activities. Motives behind, and synergy effects of M&A will be viewed both from theory and from empirical evidence. From a broad perspective, value enhancement is potentially the focus of managers today. Different value neutral and value enhancing actions that a manager can take will be discussed with a focus on discounted cash flow principles.