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In order to better understand and assimilate contents of this course attendees should possess a good understanding of the following courses: Principles of Accounting and Business Management.
Knowledge and understanding The course provides the conceptual and operational tools to acquire financial competences relative to companies valuation Application of knowledge and understanding The application of the acquired knowledge is the primary objective of the course, and this is achieved/implemented by discussing case studies, examining valuation documents (?) and attending the financial laboratory/workshops Learning skills The knowledge provided in the course is fundamental to support the student in the integration of the specialized knowledge to address the company’s complexity At the end of the course the student will be able to: • gather and analyze the information base of the firm • perform the firm valuation according to techniques most appropriate to the specificity of the firm and coherent/consistent with the available information base • read and analyze valuation research and financial reports by investment banks (and other)
The course provides a conceptual framework and the tools required to value companies. The first section introduces the review of the information base and the asset-based model with a special focus on intangibles assets. The second section is dedicated to estimating the cost of capital. The third section is dedicated to several different valuation models (such as the income model, the discounted cash flow valuation model, the asset and income-based mixed model) and the market valuation approach (multiples). Furthermore the approaches commonly used by practitioners will be analyzed with particular regards to extraordinary operations, minority/majority stake valuation and holdings valuation. The course helps develop an advanced knowledge of theoretical framework and best practices of business valuation. Competencies and ability in using business valuation techniques recognized by the international financial community will be provided.
The course is application oriented. It aims at developing the ability to identify relevant information from the available sources and to critically apply the various valuation techniques in real cases.
For this purpose teaching methodology is active. Case studies and valuations reports will be interpreted and analyzed; valuation modelling in Excel will be developed and used
Module 1 First Section: data and asset approach - Data gathering and data analysis - Developing Forecasts for Business Valuations - Asset based approach - The valuation of intangible assets – theory and practice Second section: rates - Discount rates in Professional Practices - Selecting the right discount rate - Estimating the opportunity cost of capital
Module 2 Third section: intrinsic value - Income approach - DCF approach - Union des Experts Comptables (UEC) approach Fourth Section: relative value (multiples) - Multiples in Professional practice, selection and use - Multiple approach Fifth Section: Valuations in real-world applications - Adjusting values for premiums and discounts - Valuation of holding companies - Valuation report writing
Financial Valuation: Applications and Models, James R. Hitchner2017 John Wiley & Sons, Inc. Printed ISBN:9781119286608 |Online ISBN:9781119362814] Chapter 5,6,7,8,9,10,11,24
And
Damodaran on Valuation, Aswath Damodaran, 2nd edition, John Wiley Finance, Inc. Print ISBN:9780471751212 |Online ISBN:9781119201786] Chapter 3,4,5,6
The course is taught in the traditional lecture style integrated with numerous practical exercises - related to the technical aspects of the programme - team working and Labs sessions.
The exam consists of a written test and, if passed, of a mandatory oral examination. Written and oral test must be taken in the same exam session/date. If the student has passed the written test but does not show up at the oral examination, the written test result will no longer be valid. The written test is based on the recommended readings/textbook and the exercise sessions done in class. It includes both exercises as well as theoretical questions with short exercises. The level of difficulty of the exercises is similar to what has been done in class. The oral part is meant to assess the theoretical knowledge.
The written test and the oral test count for 75% and 25% of the final grade respectively. There is a 30-point grading scale with highest result being 30 and pass result 18/30. It is possible to prepare a group report ( a minimum of two persons and a maximum of three) based on/ focused on /addressing subjects indicated/suggested/ agreed with the professor. The report must be sent via email to the professor one week prior to the date of the exam. The report grade can add up to 2 points to the final grade (obtained in the written and oral examination as per above weighting scheme).
NOTES Online enrolment only is accepted to take the exams while emails sent to Professors to this end will be disregarded. In case of difficulties with the online enrolment, students can contact the “Servizi Didattici” of the “Economia e Management” Department, 5-15 days before the examination date.