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Valuation and Aquisitions

Type of study Follow-up Master
Language of instruction Czech
Code 154-0322/04
Abbreviation OA
Course title Valuation and Aquisitions
Credits 6
Coordinating department Department of Finance
Course coordinator prof. Dr. Ing. Dana Dluhošová

Subject syllabus

1.Explanation of Basic Concepts (Subject of Valuation, Standards of Value), Approaches to the Valuation, Overview of Valuation Methods.
2.Valuation Process and Description of Its Individual Parts.
3.Projecting Revenues Growth (Analysis of the External and Internal Potential, Factors, Sales Forecasting).
4.Financial Analysis for Valuation Purposes (Basic Indicators, Interpretation, Bankruptcy Models, Pyramidal Decomposition, Analysis of Deviation).
5.Cost of Capital in the Valuation Process (Possibilities of the Cost of Capital Estimation). Valuation of the Company under the Risk Conditions (Risk Adjusted Cost of Capital Method, Method of Certainty Equivalent).
6.Financial Plan Creation (Definition, Description of Financial Plan Process, Key Factors).
7.Assets-based Approach for Company Valuation.
8.Discounted Cash Flow (DCF) Approach (Basic Description of DCF Methods, One-stage and Two-stage Method).
9.Discounted Cash Flow (DCF) Approach (Derivation and Significance of Key Value Driver Formula, Basic Relationships within Key Value Driver Formula). Sensitivity Analysis within DCF Methods.
10.Capitalized Earnings Valuation Methods.
11.EVA Method for Valuation (Estimation of the EVA Indicator, Importance and Use of EVA, EVA within Company Valuation, Sensitivity Analysis).
12.Market Approach and Combined Methods for Valuation.
13.Valuation of the Companies with a Limited Perspective.
14.Mergers and Acquisitions - M&A (Definitions, Types of Mergers, Takeover Defence Tactics, Synergy Effect, Sources of Value Growth within M&A).

Literature

FABOZZI, F. J., MARKOWITZ, H. (2011). The Theory and Practice of Investment Management: Asset Allocation, Valuation, Portfolio Construction, and Strategies. New Jersey: J. Wiley.
HITCHNER, J. R. (2011). Financial Valuation: Applications and Models. 3rd ed. New Jersey: J. Wiley.
KOLLER, T., GOEDHART, M., WESSELS, D. (2010). Valuation: Measuring and Managing the Value of Companies. 5th ed. New Jersey: Wiley.
MCMILLAN, M. G. et al. (2011). Investments: Principles of Portfolio and Equity Analysis. 1st ed. New York: Wiley.

Advised literature

DAMODARAN, Aswath. Damodaran on Valuation. Security Analysis for Investment and Corporate Finance. USA: John Wiley & Sons, Inc., 1994. 417 s. ISBN 0-471-01450-8 .