Course Type | Course Code | No. Of Credits |
---|
Foundation Elective | SBP2MB506 | 2 |
Semester and Year Offered: 3rd Semester
Course Coordinator and Team: Nidhi Kaicker
Email of course coordinator: nidhi[at]aud[dot]ac[dot]in
Pre-requisites: None
Aim: The objective of the course is to introduce the participants to various valuation methodologies to value firms, mergers, acquisitions and divestitures.
Course Outcomes:
At the end of the course, the participants will be able to:
- Understand the economic, financial, and strategic reasons for corporate restructurings
- Comprehensive understanding of various approaches of valuation
- Conduct valuation of a firm and build financial models using appropriate tools
- Critically analyse publically available information and use it for valuation for capital raising and corporate retructuring
Brief description of modules/ Main modules:
Unit 1: Valuation Methodologies
Intrinsic Valuation, Relative Valuation and Contingent Claim Valuation; Impact of Capital Structure; Taxation and its impact on Corporate Finance Decisions
Unit 2: Valuation of Specific Assets
Valuation of intangible assets and intellectual property; Valuation of private and family firms; Valuation of financial firms; Valuation of real estate firms; Valuation of infrastructure firms
Unit 3: Mergers, Acquisitions and Corporate Restructuring
Financing issues in M&A: stock vs cash, synergies, accretion and dilution; Using transaction comparables to value deals; Leveraged buyouts; Divestitures and spin offs
Unit 4: Investment Banking, Private Equity and Venture Capital
Fundraising through public offerings (IPOs/FPOs); Private equity acquisition: Venture capital approach to valuation; Valuation of new firms
Assessment Details with weights:
Nature of Assessment | Weight |
Case Analysis | 50% |
End Term | 50% |
Reading List:
- Damodaran, A. (2012). Investment Valuation: Tools and Techniques for Determining the Value of any Asset, Wiley.
- Sahlman, W. (2013). “A Simple Free Cash Flow Valuation Model”, Harvard Business School Publishing
- Luherman, T. (2009). “Business Valuation and the Cost of Capital”, Harvard Business School Publishing
- Ruback, R. (1995). “An Introduction to Cash Flow Valuation Methods”, Harvard Business School Publishing
- Luherman, T. (2009). “Corporate Valuation and Marketing Multiples”, Harvard Business School Publishing
- Luherman, T. (1997). “What’s it Worth? A General Managers Guide to Valuation”, Harvard Business Review
- Kester, W.C., Morley, J. and Froot, K. (1997). “Cross Border Valuation”, Harvard Business School Publishing
- Mitra, S.K. (2010). “Note on Cash Flow Valuation Methods: Comparison of WACC, FTE, CCF and APV approaches”, Richard Ivey School of Business, The University of West Ontario
- Clarkson, G. (2010). “Intellectual Asset Valuation”, Harvard Business School Publishing
- Fortier, D. (1995), “A Note on Mergers and Acquisitions and Valuation”, Richard Ivey School of Business, The University of Western Ontario
- Cannella, M. (2015). “Technical Note on LBO Valuation and Modeling”, Columbia Business School
- Hellman, T, (2006). “A Note on Valuation of Venture Capital Deals”, by Thomas Hellman, Stanford Graduate School of Business.
- Harvard Business School Press (2004). “Going Public: Adventure in the Capital Markets”, Chapter 8, Harvard Business School Press
ADDITIONAL REFERENCE:
- A set of readings and cases are provided to the participants in form of a course manual as the commencement of the session.