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Discounted Cash Flow Valuation

Type of study Bachelor
Language of instruction English
Code 154-0503/01
Abbreviation DCF
Course title Discounted Cash Flow Valuation
Credits 5
Coordinating department Department of Finance
Course coordinator Ing. Petr Gurný, Ph.D.

Subject syllabus

1. Introduction to yield valuation methods
2. Assumptions of the discounted cash flow (DCF) method; valuation under certainty, risk, flexibility, and uncertainty
3. Utilizing the DCF method for different types of financial assets
4. Free cash flows (explanation, nature, types of free cash flows, estimation)
5. Discount rate (explanation, assumptions, application of basic models)
6. DCF method in estimating the value of real assets
7. DCF method in estimating the value of companies
8. DCF method and economic value added method (connections, derivation, application)
9. Impact of capital structure on asset value (adjusted present value method)
10. Introduction to real options
11. Valuation in discrete and continuous time

Literature

KOLLER, Tim, Marc GOEDHART and David WESSELS. Valuation: Measuring and Managing the Value of Companies. 7th edition. Wiley, 2020. ISBN 978-1119610885.
KOLLER, Tim, Marc GOEDHART, David WESSELS and Michael CICHELLO. Valuation Workbook: Step-by-Step Exercises and Tests to Help You Master Valuation. 7th edition. Wiley, 2020. ISBN 978-1119611813 .
KRUSCHWITZ, Lutz and Andreas LOFFLER. Stochastic Discounted Cash Flow. 1st edition. Springer, 2020. ISBN 978-3030370800 .

Advised literature

KIESS, Braun C., Ben SOPRANZETTI. Valuation and Financial Forecasting: A Handbook for Academics and Practitioners. World Scientific Pub Co Inc, 2023. ISBN 978-9811218774 .
KRUSCHWITZ, Lutz and Andreas LOFFLER. Discounted Cash Flow: A Theory of the Valuation of Firms. 1st edition. Wiley, 2005. ISBN 978-0470870440 
SHAPIRO, Eric, David MACKMIN and Gary SAMS. Modern Methods of Valuation. 12th edition. Estates Gazette, 2019. ISBN 978-1138503519 .


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