Company Valuation

Course Description

This course is about corporate valuation using different models. The course starts with an introduction of different reasons for corporate valuation, taking into account two valuation aspects: equity value and firm value. The course continues with introducing and classifying the existing valuation models, putting more emphasis on the mostly applied valuation models: cash flow discounting models and relative valuation models, which address two main types of value namely intrinsic value and relative value, respectively. For each type of value, the course takes a practical approach, from valuation steps, methods, data collection, analysis, and decision-making. Above all, the learning process takes a critical approach to examining the challenges and limitations of various valuation models, learning students to building abilities to determine the most suitable models for particular companies. Moreover, the course explains value creation and management in a managerial decision-making perspective, by examining how the different decisions made by managers can create or destroy value.

Justification

The professional in Business Administration need tools to be able to accomplish the basic financial objective of a firm, which is the maximization of the company’s value and consequently owners’ wealth. Corporate valuation, therefore, is an essential tool for bridging a common goal between managers and owners through envisaging existing and potential value drivers in the context of decision-making at investors’ and managers’ levels.

Competence to be developed

Institutional Basic Competence: To evaluate the enterprise through the different valuation methods. 

Course general objective

This course will be oriented to:

Determine the value of a firm and equity through different valuation models.