040569 KU Valuation (MA) (2022W)

This course focuses on methods to value firms and/or individual projects. We will cover two alternative approaches to valuation:
discounted cash flow valuation and relative 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.
We will also discuss the basics of real options and their implications for valuation.
The course provides you with hands-on experience in valuation. The collaboration with KPMG gives a unique opportunity to share and defend your ideas in front of a top management (a skill, which is extremely valuable for your future jobs/interviews).

The course will be a mixture of lectures and case studies.

CASES

Case Studies:

(1) In-class mini case
(2) One Harvard Business School Case
(3) Real Case Study from KPMG