Students are required to know the basic notions of governance and business administration.
Traditional. Class attendance: Not strictly requested
The course is, ideally, divided into two modules. The first pertains to Business Valuation. It addresses crucial themes such as valuation techniques, discounted rate and value creation. The second module reviews the main issues of corporate governance.
The course examines the complex mechanism of decision making and control in a modern corporation. Are also analyzed the techniques of valuation a business or a M&A operations. The course aims to develop critic assessment of business valuation and corporate governance issues.
The student will know and understand the main issues of corporate governance; the conceptual and theoretical framework surrounding valuation issues and the practical tools to address such topics in real-life situations.
For Erasmus Students:
KOLLER T., GOEDHART M., WESSELS D., Valuation: Measuring and Managing the Value of Companies, 6a ed., Wiley, New York, 2015.
RAPPAPORT A., Strategic Analysis for More Profitable Acquisitions, in Harvard Business Review, July-August 1979, pp. 99-111.
KAPLAN S.N., The Market Pricing of Cash Flow Forecasts: Discounted Cash Flow vs. The Method of “Comparables”, in Journal of Applied Corporate Finance, n. 4, 1996, pp. 45-60.
DAMODARAN A., Dealing with Intangibles: Valuing Brand Names, Flexibility and Patents, January 2006, available at: http://pages.stern.nyu.edu/~adamodar/.
OECD Principles of Corporate Governance,
FAMA E., Agency problems and the theory of the firm, in Journal of Political Economy, n. 88, 1980, pp. 288-307.
FAMA E., JENSEN M.C., Separation of ownership and control, in Journal of Law and Economics, n. 27, 1983, pp. 301-325.
BARONTINI R., CAPRIO L., The effect of ownership structure and family control on firm value and performance. Evidence from Continental Europe, paper available at our library.
Written plus oral examination.
Foundations of value. Business valuation: why and how to do it. Theoretical framework for Valuation. Assumptions and scenarios in the business plan development. Approaches and methods for business valuation. Relationships between leverage and value. The choice between the asset-side vs. the equity-side approach. Discount rate. Return on investment. Cost of equity. Weighted average cost of capital. Dealing with specific risk. Market valuation. Business valuation based on comparables business sales. Equity and entity-side multiples. Theoretical framework and practical issues. Measuring business worth: the "indirect" approach based on business fundamentals. Sum of Parts approach. The value of intangible assets. Valuing business based on incomes. Discounted Cash Flow. Developing forecast assumptions. From business models to cash flow models. Business plan and cash flow projections. Economic Value Added. Business goodwill: why businesses are worth more than their assets. EVA and Unlevered DCF method. The Integrated Economic Value. The Adjusted Present Value approach (APV). Debt profile analysis in valuing tax shields. Dividend Discount Model. The "dark side" of valuation. Terminal Value hypothesis. Growth rate. Alternative valuation techniques.
Corporate governance. Board of Directors. Independent Directors. Control Governance and Board of directors performance. Executive and non-executives Directors. Internal Committee (Audit Committee; Nomination Committee, Compensation Committee; Executive Committee). Management Compensation and Stock Option Plan. Internal Audit. Firm Commitment. CEO Succession. Corporate Governance Ratings. Corporate Social Responsibility. Ethics. Crisis Management. Shareholder Activism. Shareholder Democracy & Minority Interest. Environmental, Social and Governance. International Corporate Governance.