Publication in the Diário da República: Despacho n.º 10361/2016 - 17/08/2016
5 ECTS; 1º Ano, 2º Semestre, 30,0 TP
Lecturer
- Eduardo Fontão MontAlverne Brou
Prerequisites
Elements of Financial Calculus, Corporate Finance and English.
Objectives
Study of the concepts, issues and models regarding investment valuation. It is intended that students understand and apply the models of business valuation, knowing its advantages and limitations, being able to intelligently participate in the business valuation process.
Program
I - Introduction to Valuation
1. Misconceptions about valuation.
2. Valuation models.
II - Discounted Cash Flow Valuation (DCF)
1. Basis for approach
2. DCF Choices: Equity Valuation versus Firm Valuation
3.Estimating Discount Rates
4. Estimating Cashflows and Growth
5. Terminal value.
6. Value enhancement.
7. Loose ends on valuation.
III - Relative Valuation
1. The Essence of relative valuation
2. The Market Imperative
3. Standardized values and multiples.
4.Four basic steps to using multiples.
5. Reconciling relative and DCF valuation
IV - Contingent Claim Valuation: real options
1. Option valuation
2. Options in investment analysis
3. Real options in valuation.
Evaluation Methodology
- Written Test: 57,5%
- Critical analysis of Papers:25%
- Resolution of Exercises:10%
- Class performance: 7,5%
Bibliography
- Damodaran, A. (2012). Investment Valuation, 3 ed.. U.S.A.: Wiley
- Damodaran, A. (2015). Applied Corporate Finance. U.S.A.: Wiley
Teaching Method
Lectures making use of audiovisual resources and resolution of practical cases. Critical analysis of papers.
Software used in class
Excel
