154-0503/01 – Discounted Cash Flow Valuation (DCF)
| Gurantor department | Department of Finance | Credits | 5 |
| Subject guarantor | Ing. Petr Gurný, Ph.D. | Subject version guarantor | Ing. Petr Gurný, Ph.D. |
| Study level | undergraduate or graduate | Requirement | Compulsory |
| Year | 3 | Semester | winter |
| | Study language | English |
| Year of introduction | 2024/2025 | Year of cancellation | |
| Intended for the faculties | EKF | Intended for study types | Bachelor |
Subject aims expressed by acquired skills and competences
The aim of the course is to introduce students to the basic valuation approach, the discounted cash flow method.
After completing the course, students will be able to:
- apply the discounted cash flow method in estimating the value of companies and real projects;
- practically project free cash flows;
- practically estimate the discount rate;
- understand the connection between the discounted cash flow method and the economic value added method;
- consider the capital structure in estimating value;
- explain the difference between discrete and continuous valuation.
Teaching methods
Lectures
Tutorials
Project work
Summary
The aim of the course is to introduce students to the basic approach for estimating the value of assets, the discounted cash flow method. Students will understand the basic assumptions and will be able to practically apply this method in estimating the value of real assets and the value of companies. Attention will be focused on both practical aspects of estimating the required parameters and on the interrelationships between individual methods. Students will understand the impact of capital structure on the value of assets and will learn calculations both in discrete and continuous valuation.
Compulsory literature:
Recommended literature:
Way of continuous check of knowledge in the course of semester
written credit test (case studies)
project
written exam
E-learning
Other requirements
There are no further requirements for the student.
Prerequisities
Subject has no prerequisities.
Co-requisities
Subject has no co-requisities.
Subject syllabus:
1. Introduction to yield valuation methods
2. Assumptions of the discounted cash flow (DCF) method; valuation under certainty, risk, flexibility, and uncertainty
3. Utilizing the DCF method for different types of financial assets
4. Free cash flows (explanation, nature, types of free cash flows, estimation)
5. Discount rate (explanation, assumptions, application of basic models)
6. DCF method in estimating the value of real assets
7. DCF method in estimating the value of companies
8. DCF method and economic value added method (connections, derivation, application)
9. Impact of capital structure on asset value (adjusted present value method)
10. Introduction to real options
11. Valuation in discrete and continuous time
Conditions for subject completion
Occurrence in study plans
Occurrence in special blocks
Assessment of instruction
Předmět neobsahuje žádné hodnocení.