Also refer to the MCom + MIB Student Guide

Description

The valuation of businesses is a core issue for management and affects many management decisions. For example: when deciding to sell part of the current operation, or when acquiring a new entity, or when forming a view of the current share price during a restructure of the capital base of the business.

This course examines some of the many techniques commonly employed in assessing the value of whole businesses and individual parts of businesses, and how to select an appropriate technique for a particular valuation task. The focus is on establishing the principles that underlie each of the valuation methods and these are demonstrated by application to simple examples. Students will have a firm basis for further study into the valuation of real world complex businesses and will understand the questions that need to be asked and answered. This course does NOT attempt to raise student ability to that of a competent valuer, nor does it seek to value a real public listed company.

Topics

• Introduction to Valuation
• Estimating the Risk Premium and the Cost of Financing
• Determining Growth rates and the Terminal Value
• Free Cash Flow, Equity and Dividend Discount Models
• Relative Value and Earnings Multiples
• Valuing Start-up Firms and with Negative Earnings
• Valuing Private Firms
• Effects of Value Enhancement
  
• The Value of Liquidity, Control and Transparency