Valuation – Number of Sessions 10

The ultimate test of a business decision is its impact on shareholder value – decisions that
increase shareholder value are desirable while those that don’t should generally be avoided.
Valuation captures all future cash flows that will accrue from a decision or investment and
related them to the opportunity cost of capital. In doing this three fundamental concepts in
business are captured – cash, time value and the compensation of risk. The theory behind
valuations is very simple the devil is, however, in the application.

Evaluation:
1. End-Term Examination: 45%
2. Quiz: 20%
3. Assignments: 35%

There is no text-book for the course the papers suggested as readings along with the
Corporate Finance Textbook used in the first year is adequate.

Schedule of Sessions
Session Session Details Readings Case
No.
1 & 2 Discounted 1. What it is worth?: A general Mercury Athletic:
Cash-flow Manager Guide to Valuation Valuing the
method of (97305) Opportunity (4050)
3&4 Valuation 2. Note on Cash-flow Valuation Teuer Furniture (A):
Methods: Comparison of Discounted Cash
WACC, FTE, CCF and APV Flow Valuation (A)
approaches 910N31 KEL 778
5 Relative 1. Corporate Valuation and Teuer Furniture (A):
Valuation Market Multiples 206039 Discounted Cash
Flow Valuation (B)
KEL 788
6&7 Adjusted 1. Using APV: A better toll for Seagate Technology
Present Value Valuing Operations 97306 Buyout (201063)
8 Capital Cash 1. Note on Capital Cash Flow
Flows Valuation 295069
9 & 10 Equity Cash 1. Note on Valuing Equity Cash The Hertz
Flows Flows 295085 Corporation (A)
(208030)