Publication in the Diário da República: Despacho n.º 4406/2017 - 22/05/2017
5 ECTS; 1º Ano, 2º Semestre, 30,0 TP
- Renato Heitor Correia Domingues
There are no formal prerequisites, but in-depth knowledge of Financial Calculus and Corporate Finance would be helpful.
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.
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.
- Written Test: 60%
- Critical literature review:32,5%
- In-Class performance: 7.5%
- Damodaran, A. (2012). Investment Valuation, 3 ed.. U.S.A.: Wiley
- Damodaran, A. (2015). Applied Corporate Finance. U.S.A.: Wiley
Lectures supported by audiovisual resources and resolution of practical cases. Critical literature review.
Software used in class