CORPORATE FINANCE (Business valuation)

Description

The course aims at providing students with: - The conceptual and theoretical framework surrounding valuation issues. - The practical tools to address such topics in real-life situations. The main methodologies of corporate valuation are analyzed and the approaches commonly used by practitioners (financial analysts, investment and merchant banks, consulting firms) are critically discussed. Examples focus on corporate valuation issues using DCF, stock market and deal multiples completed by industry-specific as well as case-specific valuation techniques. Theoretical framework. Assumptions and scenarios in the business plan development. Uncertainty and company valuation. Relationship between uncertainty and value in innovative projects and high growth companies. Overall profile or profiles related to specific business units. Business plan and cash flow projections. Developing forecast assumptions. From business models to cash flow models. Problems with the assessment of cash flow models. Typical cash flow patterns in some industries. Approaches and methods for business valuation. Relationships between leverage and value. Alternative valuation techniques. The choice between the asset-side vs. the equity-side standpoint. Estimating the opportunity cost of capital. Dealing with specific risks, including climate risk and the firm's ESG profile. Discounted Cash Flow. Typical procedures in the financial community. The Adjusted Present Value approach (APV). Debt profile analysis in valuing tax shields. Different alternatives. Stock market and deal multiples. Theoretical framework and practical issues. Exchange/course-load context: The official incoming exchange catalogue states that 30xxx codes refer to undergraduate courses, 20xxx and 21xxx codes refer to graduate courses, and 50xxx codes refer to the Integrated Master of Arts in Law. Undergraduate exchange students are allowed to select undergraduate-level courses only; graduate students can choose both undergraduate and graduate level courses. Bocconi credits are ECTS-equivalent. Each Bocconi credit corresponds to 25 hours of workload, including 8 lecture hours.