154-0522/01 – Valuation and Acquisitions (VaA)

Gurantor department	Department of Finance	Credits	4
Subject guarantor	prof. Dr. Ing. Zdeněk Zmeškal	Subject version guarantor	doc. Ing. Miroslav Čulík, Ph.D.
Study level	undergraduate or graduate	Requirement	Compulsory
Year	1	Semester	winter
		Study language	English
Year of introduction	2009/2010	Year of cancellation	2021/2022
Intended for the faculties	EKF	Intended for study types	Follow-up Master

Instruction secured by
Login	Name	Tuitor	Teacher giving lectures
CUL33	doc. Ing. Miroslav Čulík, Ph.D.
GUR022	Ing. Petr Gurný, Ph.D.
KRE330	doc. Ing. Aleš Kresta, Ph.D.

Extent of instruction for forms of study
Form of study	Way of compl.	Extent
Full-time	Credit and Examination	2+1

Subject aims expressed by acquired skills and competences

This course focuses on deepening of basic knowledge about firm valuation obtained within bachelor study. The aim of the course is to learn students to apply advanced valuation approaches and methods in order to analyze the firm value.

Teaching methods

Lectures
Tutorials

Summary

The content of the course consists of theoretical basics of company valuation, valuation approaches and methods, mergers and acquisitions issues, including accounting and tax aspects.

Compulsory literature:

DLUHOŠOVÁ, Dana et al. Financial Management and Decision-making of a Company: Analysis, Investing, Valuation, Sensitivity, Risk, Flexibility. SAEI, vol. 28. Ostrava: VSB-Technical University of Ostrava, 2014. 258 p. ISBN 978-80-248-3619-5. HITCHNER, James R. Financial Valuation, Applications and Models. 3rd ed. New Jersey: John Wiley & Sons, 2011. 1320 p. ISBN 978-0470506875. KOLLER, T., M. GOEDHART a D. WESSELS. Valuation: Measuring and Managing the Value of Companies. 6th ed. New York: McKinsey & Company Inc., 2015. 848 p. ISBN 978-1118873700.ARZAC, E. R.: Valuation for mergers, buyouts and restructuring. J. Wiley, 2003. DAMODARAN, A.: Investment valuation:and Techniques for Determining the Value of Any Asset. John Wiley & Sons, Inc., 2012. MEITNER, M. The Market Approach to Comparable Company Valuation. Physica-Verlag, 2006. PRATT, S.P., NICULITA, A.V.: Valuing a Business: The Analysis and Appraisal of Closely Held Companies. 5th Ed. McGraw-Hill, 2007. PRATT, S.P:, GRABOWSKI, R.J.: Cost of Capital: Applications and Examples. 4th Ed. Wiley, 2010. RAWLEY, T.; GUP, B.E.: The Valuation Handbook: Valuation Techniques from Today's Top Practitioners. Wiley, 2009.

Recommended literature:

ARZAC, R. Enrique. Valuation For Mergers, Buyouts, And Restructuring. 2nd ed. New Jersey: John Wiley & Sons, 2007. 384 p. ISBN 978-8126524129. DAMODARAN, Aswath. Investment Valuation: Tools and Techniques for Determining the Value of any Asset. 3nd ed. New Jersey: John Wiley & Sons, 2012. 992 p. ISBN 978-1118130735. DAMODARAN, Aswath. Damodaran on Valuation: Security Analysis for Investment and Corporate Finance. 2nd ed. New Jersey: John Wiley & Sons, 2006. 696 p. ISBN 978-0471751212. REILLY, R., SCHWEIHS, R.: Valuing Intangible Assets. 1st Ed. McGraw-Hill, 1998.

Way of continuous check of knowledge in the course of semester

E-learning

Other requirements

There are no other requirements on the students.

Prerequisities

Subject has no prerequisities.

Co-requisities

Subject has no co-requisities.

Subject syllabus:

1. Introduction to the Valuation. Purposes of a Valuation. Standards of Value. Premises of Value. Effective Day. Basic Approaches to Value. 2. Valuation Process. Sales Forecasting (Projecting Revenues Growth). Analysis of the External Potential. Relevant Market. Analysis of the Internal Potential. SWOT Analysis. 3. Financial Analysis for Valuation Purposes. Nonoperating Assets. Financial Plan. Component and Goals of a Financial Plan. 4. Cost of Capital. Characteristic and Estimating. Basic concepts. Build-Up Summation Model. Capital Asset Pricing Model. Arbitrage Pricing Theory. MM I., MM II., MM III. 5. Income Approaches. Basic Concepts. DCF Methods. FCF Estimation. DCF Equity, DCF Entity, Adjusted Present Value. 6. Multiphase DCF Methods (2-phases Method). Determination of a Continuing (Terminal) Value. Sensitivity Analysis. 7. Economic Value Added (EVA) Concept. EVA Methods within Valuation. Differencies between DCF Methods and EVA Methods. Sensitivity Analysis. 8. Capitalization of Earnings Method. Simple and Analytic Version. Company Valuation in Risk Terms. 9. Asset Approach. Book Value Method. Adjusted Book Value Method. Substantial Value Method. Liquidation Value Method. 10. Market Approach. Advantages and Disadvantages. Basic Implementation. Computation of Multiples. 11. Mergers and Acquisitions (M&A). Introduction. Types of Acquisitions. Takeover Defences. Synergistic effect. Sources of Value Growth. 12. Valuation of Companies with a Limited Perspective. The Possibility of a Real Options Utilization within Company Valuation.

Conditions for subject completion

Full-time form (validity from: 2009/2010 Winter semester, validity until: 2013/2014 Winter semester)

Task name	Type of task	Max. number of points (act. for subtasks)	Min. number of points	Max. počet pokusů
Exercises evaluation and Examination	Credit and Examination	100	51
Exercises evaluation	Credit
Examination	Examination			3

Mandatory attendence participation:

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Conditions for subject completion and attendance at the exercises within ISP:

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Occurrence in study plans

Academic year	Programme	Branch/spec.	Spec.	Form	Study language	Tut. centre	Year	Type of duty
2018/2019	(N6202) Economic Policy and Administration	(6202T010) Finance		P	English	Ostrava	1	Compulsory	study plan
2017/2018	(N6202) Economic Policy and Administration	(6202T010) Finance		P	English	Ostrava	1	Compulsory	study plan
2016/2017	(N6202) Economic Policy and Administration	(6202T010) Finance		P	English	Ostrava	1	Compulsory	study plan
2015/2016	(N6202) Economic Policy and Administration	(6202T010) Finance		P	English	Ostrava	1	Compulsory	study plan
2014/2015	(N6202) Economic Policy and Administration	(6202T010) Finance	(01) Finance	P	Czech	Ostrava	1	Compulsory	study plan
2013/2014	(N6202) Economic Policy and Administration	(6202T010) Finance	(01) Finance	P	Czech	Ostrava	1	Compulsory	study plan
2012/2013	(N6202) Economic Policy and Administration	(6202T010) Finance	(01) Finance	P	Czech	Ostrava	1	Compulsory	study plan
2010/2011	(N6202) Economic Policy and Administration	(6202T010) Finance	(01) Finance	P	Czech	Ostrava	1	Compulsory	study plan
2009/2010	(N6202) Economic Policy and Administration	(6202T010) Finance	(01) Finance	P	Czech	Ostrava	1	Compulsory	study plan

Occurrence in special blocks

Block name	Academic year	Form of study	Study language	Year	W	S	Type of block	Block owner
Subject block without study plan - EKF - P - en	2020/2021	Full-time	English				Optional	EKF - Faculty of Economics	stu. block
Subject block without study plan - EKF - P - en	2019/2020	Full-time	English				Optional	EKF - Faculty of Economics	stu. block

Assessment of instruction