Business Valuation

Code:

2MiF05

Acronym:

BV

Keywords
Classification	Keyword
OFICIAL	Management Studies

Instance: 2022/2023 - 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	44	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. 
   

   The Financial Analysis of a Corporation

   
   


2. 
   

   DCF Valuation

   
   


3. 
   

   Relative Valuation

   
   


4. Contingent Valuation

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 teaching methodology consists of a combination of theoretically based approach with the critical analysis of decision-making problems and application of the concepts learnt during the classes to a real case study.

Evaluation Type

Distributed evaluation with final exam

Assessment Components

Designation	Weight (%)
Participação presencial	25,00
Trabalho escrito	75,00
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

The final grade in the course needs to be equal to or higher than 10. The final grade has a cap of "average quiz grade + 3".

Students are evaluated on a continuous basis, taking into consideration their end-of-classes quiz grades (best four quizzes out of six) and their final project/group assignment.

Only exam evaluation is not available, but students can improve quiz grades on the re-sit date.

Calculation formula of final grade

Final grade= 25% x Quizzes average grade + 75% x Group assignment grade

Maximum grade: Quizzes average grade* + 3

* Best 4 (out 6)

Examinations or Special Assignments

n.a.

Internship work/project

n.a.

Special assessment (TE, DA, ...)

n.a.

Classification improvement

n.a.

Observations

n.a.