Valuation

1.5 Credits · Level: Graduate

"This course focuses on core principles of how to value a business enterprise. Valuation helps address some of the fundamental questions faced by both investors as well as managers of a firm. For example, a security analyst typically wants to answer the question “Is this stock a good buy at the current price?”; A management consultant may ask “How does my client compare with its industry peers in terms of past performance and future prospects?”; A corporate manager may ask “is my firm valued properly by the investors?” The bulk of the course will involve the detailed mechanics of how to measure firm value through multiple hands-on exercises. Through learning those mechanics, students should gain an understanding of the ways a corporate enterprise can be valued. The primary goal of this course is to provide you with a good grasp of the basic drivers of value creation through exercises in Discounted Cash Flow (DCF) valuation and to gain understanding of how these drivers manifest themselves in Multiples based valuation. Through these exercises, you should gain a solid understanding of the ways in which the value of an enterprise can be estimated. The second major goal of this course is to develop tools which will help you conduct and communicate your analyses. Specifically, this course will require frequent use of spreadsheet modeling. This method involves examining an actual company, for which you are expected to use your knowledge (from class lectures, assigned readings, etc.) to estimate the value of the enterprise. This method is designed to help you relate the subject knowledge to a practical situation."