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040569 VK KFK CF: Valuation (E) (2016W)

Advanced Corporate Finance

4.00 ECTS (2.00 SWS), SPL 4 - Wirtschaftswissenschaften
Continuous assessment of course work

Dear Student,

If you are interested in working for a consulting company/bank/insurance company you may find the following course offering useful.

The course titled "Valuation" builds on a long cooperation with the Austrian insurance company, UNIQA.

The aim of the course is two-folds:

(1) it enables students to acquire knowledge about the most frequently used valuation techniques for non-financial firms;

(2) it allows students to learn about valuation methods exclusively used for financial firms such as insurance companies.

The course has a hands-on approach in that students are required to work on real business cases as part of the course assessment. In addition, UNIQA itself bring in a case. The presentation of that case, in front of two board members of UNIQA as well as several division managers, provide a professional life enriching experience for all the participating students. The course is especially designed for students who share the philosophy of "hard work-high achievement".

Please find below the precise course description.

I look forward to seeing you there,

Gyongyi Loranth



max. 25 participants
Language: English


Classes (iCal) - next class is marked with N

06.10.2016 15:00-19.00 Ort: SR 6
Topic: Absolute Valuation Methods (Calculating Free Cash Flows; The Use of the WACC)

20.10.2016 15:00-19.00 Ort: SR 6
Topic: Valuation by the APV Method; Relative Valuation Methods
Case Study: UST Case Study (non-graded)

17.11.2016 15:00-19.00 Ort: SR 6
Case Study: American Chemical (graded)
Topic: Real Options

01.12.2016 15:00-19.00 Ort: SR 6
Presentation of UNIQA
(Methods to value insurance companies
(Case Study presentation)

15.12.2016 15.00-19.00 Ort: SR 6
Topic: LBOs
Topic: Embedded Value (Valuation of Insurance Companies)

12.01.2017 15.00-19.00 Ort: SR 6
UNIQA presentation at the UNIQA Tower

26.01.2017 09.00-10.30 Ort: SR 6

Remark: The course has 7 3-hour sessions with a half an hour break in the middle. The course starts right in time and is aimed at finishing in time.

Thursday 06.10. 15:00 - 19:00 Seminarraum 6 Oskar-Morgenstern-Platz 1 1.Stock
Thursday 20.10. 15:00 - 19:00 Seminarraum 6 Oskar-Morgenstern-Platz 1 1.Stock
Thursday 17.11. 15:00 - 19:00 Seminarraum 6 Oskar-Morgenstern-Platz 1 1.Stock
Thursday 01.12. 15:00 - 19:00 Seminarraum 6 Oskar-Morgenstern-Platz 1 1.Stock
Wednesday 07.12. 15:00 - 19:00 Seminarraum 5 Oskar-Morgenstern-Platz 1 1.Stock
Thursday 12.01. 15:00 - 19:00 Seminarraum 6 Oskar-Morgenstern-Platz 1 1.Stock
Thursday 26.01. 15:00 - 19:00 Seminarraum 6 Oskar-Morgenstern-Platz 1 1.Stock


Aims, contents and method of the course

This course focuses on methods to value firms and/or individual projects. We will cover three alternative approaches to valuation: discounted cash flow valuation, relative valuation and contingent claim (real options) valuation.
We start with an in-depth analysis of the discounted cash flow method and its practical implementation. More specifically we will discuss various versions of discounted cash flow models, including the discounted free cash flow model, discounted capital cash flow model, and adjusted present value model. We will also discuss how various inputs required by those valuation models can be obtained from historical data. In particular we will discuss how to forecast future cash flows, calculate residual values and derive appropriate discount rates.
The relative valuation approach estimates the value of a firm by looking at the pricing of "comparable" firms relative to a common variable such as earnings, cash flows or book equities. We will discuss pros and cons of this popular valuation method.
The contingent claim valuation approach is a more sophisticated method that tries to quantify the impact of managerial flexibility on firm/project valuation. We will cover applications of the Black-Scholes formula, binomial option pricing model and Monte Carlo simulations to evaluate firms or investment projects that have option characteristics.
A guest lecture on valuation of insurance companies (they cannot be valued as non-financials given the different nature of their business) will be delivered by Rene Knapp who is Group Chief Actuary at UNIQA. A case study focused on the insurance industry will form an essential part of the course requirement.
The course provides you with a hands-on experience in valuation. Collaboration with the UNIQA might give you future access to internship and other appointments.
The course will be a mixture of lectures and case studies.

Assessment and permitted materials

This course emphasizes both theoretical analysis and practical applications.
Working language is English.
Students are required to come to classes, read all cases and actively participate in the discussions.
There will be 3 case preparations. Cases must be handed in on time. No credit will be given for late cases.
You are encouraged to meet in groups to discuss and analyze the cases. In the past, students have found that these groups complement the class discussion well.

Minimum requirements and assessment criteria

The evaluation will be based on the following items: in-class participation (10%); case studies (50%) and exam (40%). The case delivered by UNIQA is also part of the assessment. Attendance is COMPULSORY, including the presentation at UNIQA.
The pass grade is 50 %, but you should get at least 50% in each part in order to successfully complete the course.
Case Studies:
(1) Harvard Business
Debt Policy at UST Inc.
(2) Harvard Business
American Chemical Corporation
N. 9-280-102
(3) UNIQA Case Study
N. 9-292-140

Examination topics

Reading list

Lecture Notes. A learning area will be available in the Intranet (Moodle). There, you would find instructions for the sessions, communications, bibliography, etc. Slides of the sessions will also be posted here, always BEFORE the class.
Investment Valuation, 2nd edition, Aswath Damodaran, 2002 (book, manuscript, lecturenote).
Valuation, 4th edition, Chapters 5-12, McKinsey & Company, Tim Koller, Marc Goedhart and David Wessels, 2005.
Valuation: The Art and Science of Corporate Investment Decisions, Sheridan Titman and John Martin, Addison Wesley, 2007.

Association in the course directory

Last modified: Mo 07.09.2020 15:29