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Business Valuation

Code: 2MiF05     Acronym: BV

Keywords
Classification Keyword
OFICIAL Management Studies

Instance: 2020/2021 - 1S Ícone do Moodle

Active? Yes
Course/CS Responsible: Master in Finance

Cycles of Study/Courses

Acronym No. of Students Study Plan Curricular Years Credits UCN Credits ECTS Contact hours Total Time
MIF 46 Official Syllabus after 2020-2021 1 - 3 21 81

Teaching language

English

Objectives

Provide the students with knowledge about available valuation methods that enable them to prepare or to critically appraise, acquisition proposals for existing businesses. The course will seek to raise participants' awareness of the necessary conditions for the acquisition of companies so as to add value to an organization, understand the risk factors to be taken into account and the accounting consequences of this type of operations.

Learning outcomes and competences

At the end of the course, students should be able to:

- develop promforma financial mstatements based on both historical statements and a set of assumptions for the future;

- critically assess accounting and due diligence aspects associated with business valuation processes:

- be aware of the diversity of existing business valuation methods, as well as their advantages and limitations;

- have the ability to decide whichbusiness valuationb method (s) is (are) the most appropriate one(s) for a given real business situation;

- Identify the most critical risk factors in a business valuation situation;

- Understand how to determine the cost of capital in an business valuation context as well as the impact of the form of financing;

- critically assess bsuiness valuation reports presented to them.

Working method

Presencial

Pre-requirements (prior knowledge) and co-requirements (common knowledge)

 (i) basic financial calculus

(ii) use of spreadsheets,

(iii) basic financial accounting

(iv) basic corporate finance

Program


  1. Introduction

  2. Essential concepts of value

  3. The preparation of proforma financial statements

  4. Valuation Methods

  5. The determination of the cost of capital in the acquisitions of companies

  6. Financing and the usage of SPE-Special Purpose Entities in M&A

  7. Risk Analysis and Due Dilligence in Business Valuation

  8. Special Valuation cases

Mandatory literature

Aswath Damodaran; Investment valuation. ISBN: 978-1-118-01152-2
Tom Copeland; Valuation. ISBN: 0-471-08627-4

Teaching methods and learning activities

The course will make an extensive usage of illustrations using both numerical and real life examples coupled with an intense usage of spreadsheets
. Also, special sessions with practicioners is expected to provide additional learning insights about valuation on business valuation in practice to students. Finally, participants will have the opportunity to analyse and solve case studies both in group or at an individual level.

Evaluation Type

Distributed evaluation with final exam

Assessment Components

Designation Weight (%)
Participação presencial 10,00
Teste 50,00
Trabalho de campo 40,00
Total: 100,00

Amount of time allocated to each course unit

Designation Time (hours)
Elaboração de projeto 20,00
Estudo autónomo 40,00
Frequência das aulas 21,00
Total: 81,00

Eligibility for exams

Final grade in the course equal to or higher than 10. Minimum grade of 8 required in individual written test or exam.

Calculation formula of final grade

NFinal grade= 10% x Participation grade+ 50% x Test (or exam )  grade+ 40% x Grpoup assignment grade

Minimum required grade in written final test (or exam): 8

Formula is applicable for students doing either normal or recourse exams.
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