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FIRM VALUATION : THEORY AND PRACTICES

2017-2018

IESEG School of Management ( IÉSEG )

Code Cours :

1718-IÉSEG-M1S1S2-FIN-MA-FI60UE

FINANCE


Niveau Année de formation Période Langue d'enseignement 
Master1S1S2English
Professeur(s) responsable(s)R.BEAUPAIN
Intervenant(s)Aurore BURIETZ, Maia GEJADZE, Daniela LAUREL-FOIS, Mikael PETITJEAN, Alexandre RUBESAM, Gary VAN VUUREN


Pré requis

Introduction to financial data services;
Finance fundamentals (time value of money, NPV, IRR, CAPM, etc.);
Corporate finance;
(Portfolio management and analysis.)

Objectifs du cours

At the end of this course, students will be able to:
Critically describe the characteristics of standard valuation techniques;
Use Thomson Reuters analytics and extract data for determining the value of equity or companies;
Estimate the cost of the various sources of financing used by a firm;
Assess the sensitivity of value estimates to the model assumptions;
Understand, complete and modify a spreadsheet valuation model in Microsoft Excel and link it to data from Thomson Reuters.

Contenu du cours

This course focuses on the typical tasks conducted by financial analysts in determining the value of financial assets (debt, equity, or companies) and covers the techniques traditionally applied in valuation. After an introduction to valuation techniques (discounted cash flows, relative valuation, and contingent claim methods) and to key concepts in valuation (discount rates and cash flows), the sensitivity of value estimates to the model assumptions is carefully examined. This course rests on Thomson Reuters data and analytics and provides students with a solid background to value companies on the basis of professional data services. A the end of this course, students are expected to understand, complete, and modify a valuation model in Microsoft Excel and apply it to an existing company.

Course outline:
1. Introductory thoughts on valuation
2. The asset
3. Estimating the cost of capital
a. Equity risk and the cost of equity
b. Default risk and the cost of debt
c. The cost of preferred stocks
d. The weighted average cost of capital
4. Cash flows: Definition and discounting
5. Building growth forecasts
6. Concluding remarks


Modalités d'enseignement

Organisation du cours

TypeNombre d'heuresRemarques
Face to face
Interactive class16,00  
Independent study
Group Project18,00  
Estimated personal workload16,00  
Charge de travail globale de l'étudiant50,00  

Méthodes pédagogiques

  • Research
  • Interactive class


Évaluation

This course is assessed through a group valuation assignment for which students build their own valuation model of one company, write a technical report, and conclude with an analyst report in which they issue a final recommendation. In addition, students are required to answer one short individual open question at the end of each lecture (during the last half an hour). Finally, the validation of this course is conditioned upon the successful completion of the requirements of Introduction to Financial Data Services.

Type de ContrôleDuréeNombrePondération
Others
Group Project0,00170,00
Continuous assessment
Participation0,00430,00
TOTAL     100,00

Bibliographie

  • Damodaran, A (2012): Investment Valuation: Tools and Techniques for Determining the Value of Any Asset, John Wiley and Sons, Inc. -

  • • Wiley Study Guide for 2015 Level II CFA Exam, Volume 3, Study Sessions 10 to 12, John Wiley & Sons. -

  • • Titman, S. and Martin, J. D. (2007), Valuation: The Art and Science of Corporate Investment Decisions, Addison-Wesley -

  • • Koller, T., Goedhart, M. and Wessels, D. (2005), Valuation: Measuring and Managing the Value of Companies, John Wiley and Sons, Inc. -


Ressources internet



 
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