Valuation Methods and Techniques

Faculteit Economie en Bedrijfskunde
Jaar 2021/22
Vakcode EBE052A08
Vaknaam Valuation Methods and Techniques
Niveau(s) post-initieel
Voertaal Engels
Periode semester II a
ECTS 8

Uitgebreide vaknaam Valuation Methods and Techniques
Leerdoelen Upon completion of this course the student is able to:
- Assess how the purpose of the valuation and the perspective of the stakeholders in a particular case influences the choice of standard of value and valuation methods;
- evaluate the theoretical and practical relevance and applicability and valuation theory of the various valuation methods;
- assess and solve practical estimation issues of key parameters in the DCF-method (and its variations), e.g. beta, equity market risk premium, continuing value;
- apply the ‘comparable company’- valuation method in warranted and robust manner;
- distinguish the valuation challenges and issues specific to each phase of the life cycle of companies and apply the most suitable approach to start-up, high-growth, mature, cyclical companies, and companies in decline;
- address advanced valuation issues in company valuation, including the valuation of various non-operating assets and liabilities, pensions, leases, real estate, deferred taxes and intangible assets
- understands how the corporates’ view on value differs from the view of private equity;
- critically assess the very varied practice of the application of discounts and premiums in valuation (e.g. control premium, country risk, discount for lack of marketability) and how to apply critical thinking based on academic literature and empirical research;
- perform business valuations with a well-founded value conclusion based on sound analysis, and triangulation of the outcome of various analysis and methods;
- understand the role of professional standards and valuation standards;
- communicate relevant information in a logical, convincing and clear way.
Omschrijving A sound business valuation requires, amongst others, an analysis of the company and its strategy, financial analysis, forecasting, and modelling. These subjects have been covered in Semester 1. This course focusses on the two other elements of valuation: (i) valuation methods and techniques and (ii) the formulation of a well-founded value conclusion based on all the analysis performed. The theory of business valuation is well covered in academic textbooks. Business valuation in practice adds a wholly new dimension. Estimation and information issues loom large. The application of various methods and scenarios typically leads to wide valuation ranges with which the valuator has to deal. The focus of this course is on the issues that the valuator encounters in practice. In particular the following subjects will be covered:
- how the purpose of the valuation defines concepts of value and valuation methods;
- the gap between theory and practice;
- estimation issues in the various valuation methods;
- valuation issues specific to the phase in the life cycle of a company;
- discounts and premiums (e.g. related to control and lack of marketability);
- the additional complexities of cross border and emerging market valuation;
- the difference between the corporate and private equity perspective in valuation;
- how to weight the various valuation methods and develop a value conclusion.
Uren per week variabel
Onderwijsvorm gecombineerde hoor-/werkcolleges
(and guest lectures)
Toetsvorm -groepsopdracht,  -schriftelijk tentamen (open vragen)
(Written exam with open questions (80%) + group assignment (20%))
Vaksoort executive master
Coördinator prof. dr. W.G.M. Holterman
Docent(en) prof. dr. W.G.M. Holterman
Verplichte literatuur
Titel Auteur ISBN Prijs
Narrative and numbers. The Value of Stories in Business, 2017 Damodaran 9780231180481 ca. €  57,00
The Dark Side of Valuation, 2018 Damodaran 9780134854106 ca. €  60,00
Valuation: Measuring and Managing the Value of Companies, 2020 Koller, Goedhart, Wessels 9781119610885 ca. €  90,00
Several academic articles Various
Entreevoorwaarden
Opmerkingen Lecturers: Prof. H.A. Rijken, H. Haanappel, MSc
Opgenomen in
Opleiding Jaar Periode Type
Executive Master Mergers & Acquisitions and Valuation 1 semester II a verplicht