IBF 1: Valuation of Securities & Companies

COURSE SUMMARY: 

VALUING SECURITIES & COMPANIES

The course on VALUING SECURITIES & COMPANIES will discuss the fundamental principles of corporate finance. These include investment decisions as well as financing decisions.

The course is also a prerequisite for the 2^nd term lecture CORPORATE FINANCE & VALUATION and for the intensive lectures of the 3^rd term like ADVANCED M&A and ADVANCED M&A & VALUATION - CASE STUDIES.

COURSE METHODOLOGY

The scientific framework of the course VALUING SECURITIES & COMPANIES is build upon the following corner stones:

Valuation of securities and companies

• The purpose, the goals and the governance of the firm
• The tao of valuation (methodologies): The NPV and IRR concepts
• Debt capital markets: Valuing bonds
• Equity capital markets: Valuing stocks
• Alternative investment methodologies to NPV
• Valuing investment decisions and projects
• Introduction to the valuation of companies (Basic Enterprise-DCF valuation approach)

Portfolio theory: Risk, return and the Capital Asset Pricing Model (CAPM):   

• Risk & return
• Portfolio theory & Capital Asset Pricing Model (CAPM)
• Risk & cost of capital (WACC, leveraged and un-levered cost of equity, beta, et al)

COURSE LOGISTICS, TIMING & CORE LITERATURE

Lectures will be on-campus every Monday from 8:00 am to 11:20 am (room WX.XX). Lectures will start on October 07, 2024. 

Literally, to be up to date in financial market matters is a must for our lectures. Therefore, reading the ECONOMIST (weekly) and the FINANCIAL TIMES (daily) is mandatory. Besides, we will use a bunch of latest scientific articles (as will be discussed during the lectures). 

For the lectures the core text books will be: 

• BREALEY, MYERS, ALLAN: PRINCIPLES OF CORPORATE FINANCE (2023). WILEY. and 
  
• FEIX, T. (2021). VALUING DIGITAL BUSINESS DESIGNS & PLATFORMS - AN INTEGRATED STRATEGIC AND FINANCIAL VALUATION FRAMEWORK. SPRINGER GLOBAL BOOK SERIES ON "THE FUTURE OF BUSINESS & FINANCE".
  

It is intended to supplement the lectures by selected best practice presentations of blue chip M&A houses, strategy consultants and corporate finance, M&A as well as strategy departments of international corporations.

You should invariably read the assigned chapters, articles, and supplementary materials before you come to class and go over the assigned exercises and cases. Students are expected to carefully review the assigned reading materials before each session, diligently work on the assigned problems, pertinent questions, and cases, and to participate actively in the class discussions. You should be prepared to spend some time to digest the material, to work on the assignments and case studies. After the end of each session, you should review your notes.

I would like to invite you to create together with YOU an inclusive classroom and engaging learning environment where we will explore intellectual curiosity with respect, candor, courtesy, and courage! Contradicting views and perspectives are highly welcomed, at least if they are grounded on a reasonable argumentation line. Already in our first session we will confront the argumentation of the Harvard Business Review with a thought-provoking article of the Economist on the modern purpose of the firm.

Let's move...