Business Valuation

Code:

2MiF05

Acronym:

BV

Keywords
Classification	Keyword
OFICIAL	Management Studies

Instance: 2021/2022 - 1S

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	42	Official Syllabus after 2020-2021	1	-	3	21	81

Teaching language

English
Obs.: n.a.

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) financial calculus

(ii) use of spreadsheets,

(iii) financial accounting

(iv) 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. 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.

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

Examinations or Special Assignments

n.a.

Internship work/project

n.a.

Special assessment (TE, DA, ...)

n.a.

Classification improvement

n.a. except for those that do not pass during the continuous assessment

Observations

n.a.