|This course combines frameworks in finance, economics and accounting to review a very detailed and step-by-step approach to valuing a company and its securities. In the first part of the course, we review the basic tools needed to analyze and value a company – calculating financial statement relations, measuring free cash flows, and developing a financial model. In the second part of the course, we review discounted cash flow valuation model, which includes levering and unlevering the cost of capital (or beta). In the third part of the course, we review market multiple valuation methods. Lastly, in the fourth part of the course, we review specific transactions (LBOs and M&A) and cross-border valuation issues.
While I assume students have a solid background in financial accounting, investments (measuring the equity, debt, preferred stock costs of capital), and corporate finance, I also assume students have little or no practical experience valuation. This is not a good course for students with both academic and practical experience in valuing companies; these students will likely be bored and unhappy because of all of the work required. This is also not a good course for students who completed financial accounting and never wanted to analyze another financial statement, or who do not like using Excel, or who do not like algebra.
|The textbook is, Robert Holthausen and Mark E. Zmijewski, Corporate Valuation: Theory, Practice and Evidence, 1st edition, 2014, which I wrote with a colleague from Wharton. The course outline, cases, assignments, and other materials will be distributed on the Chalk site for the course.|