Universidad de Jaén

Unit 1. INTRODUCTION TO COMPANIES VALUATION

1.1. Why is it necessary to value businesses?

1.2. What can we expect from the valuation of a company?

1.3. Most common methods employed in company valuation.

Unit 2. DISCOUNTED CASH-FLOWS VALUATION (I)

2.1. Introduction to DCF methods

2.2. The dividend discount model

2.3. The Free Cash-Flow to Equity model (FCFEM)

2.4. The Free Cash-Flow to the Firm model (FCFFM)

2.5. Economic Value Added (EVA®) Model

2.6. The Residual Income Model (RIM)

2.7. Conclusion

Unit 3. THE DISCOUNT RATES

3.1. Discount Rates: Generalities 

3.2. The Risk-Free Rate

3.3. The Market Risk Premium  

3.4. The Risk of the Investment

3.5. Estimation of the Cost of Equity

3.6. The Cost of Debt

3.7. The Weighted Cost of Capital

Unit 4. ESTIMATION ISSUES IN DCF MODELS

4.1. Introduction 

4.2. Estimation of the Base Values

4.3. Detailed Estimation

4.4. Terminal Value Estimation

4.5. Premia and Discounts

Unit 5. RELATIVE VALUATION

5.1. Introduction 

5.2. Price-Earnings Ratio

5.3. Price-Earnings Growth Ratio

5.4. MTB Ratio

5.5. EV-EBITDA Ratio 

5.6. EV-SALES Ratio

5.7. Practical Considerations

In each session, the teacher will present the contents of each unit. Students are expected to participate in class making opportune questions and comments. 

Once the theoretical lessons are given, the students will attend to a practical workshop where two practicioners will explain their work in company valuation. 

Students with special educational needs should contact the Student Attention Service (Servicio de Atención y Ayudas al Estudiante) in order to receive the appropriate academic support

Evaluation is based upon three activities:

1)   Attendance and participation: Attendance is compulsory. Those students who assist to less than the 80% of the classes will not pass the course. Active participation is encouraged. There are two forms of participation: the first one is the student's contributions to the discussions in class; the second one is to take part in the discussion topics that will be posted on the blog of the course. 

2) Individual quiz: at the end of the course (May, 26th) there will be an individual quiz to assess the students command on the topics of the course. The quiz will be open book, open notes; that is, you can bring as much supporting material as you desire. You can even bring a tablet or a laptop if you wish, but wireless communications of the device must be disabled. However, the quiz is strictly  individual. The duration of the quiz will be 45 minutes. 

3) Group work : at the beginning of the course (that is to say, in just a few moments) you will be assigned to a group, and a company will be assigned to each group. You must prepare a valuation report of that company using a DCF method. That valuation report will be due  before May 26th . In addition, you must prepare an executive summary of your valuation report, and  you will have to make a live presentation of that executive summary (during approximately 10 minutes) on May 26th.