COLLEGE OF ST.

JOHN - ROXAS
Member: Association of LASSAI- Accredited Superschools (ALAS)
Gov. Atila Balgos Ave.. Banica, Roxas City

Flexible Learning Plan Course Syllabus

A.Y 2021- 2022

VALUATION CONCEPTS AND

Course Title METHODS
Year Level 3rd Year Level Term First Semester

Instructor Miles Nicko Santos Phone Number 09063369187 Email Address miles_santos@csjr.edu.ph
This course will provide the students with practical tools and methods to value a broad range of assets within business entity. It covers
business valuation, equity valuation, fixed income valuation, and option valuation. Students should be able to utilize various capital and
Course Description
investment management and techniques in making long-term business decisions. Students should be able to differentiate the types and
measurement of risk and apply their relationships with the rate of returns
Course Learning outcomes Upon completion of the course, the students will be able to:

A. Cognitive

1. Identify different methodologies used in determining business and equity valuation with the broad range of assets;
2. Describe the different methodologies and technique in valuation;
3. Recommend the most suitable technique on valuation;
4. Determine and recommend best option among the set of alternative available for the investors;

B. Psychomotor

1. Perform calculations on Google Sheets© or Microsoft Excel™ spreadsheet applications;

2. Grind the financial data in an orderly and logical manner in order to bring useful and compact information; and

C. Affective
 1. Form part of the leadership team, advisory at the very least, of the firm they will engage in the future and make strategic business
directions.

3 Prerequisite Instructional Delivery 36 hours Number of 7

Credits
Duration Topics

Requirements/ Resources
Week Delivery of Learning
TOPIC OBJECTIVES outputs/ (Links/Supplementary
Number instruction Strategies
Assessments reading materials
1-2 1-2. Fundamental Principles of  Differentiate enterprise Comprehensive Practical Part 1, Koller, T., Visual lectures,
Value Creation value and equity value; and procedural exercises/Case Goedhart M., Wessels, D., demonstration
 Explain the concept of approach of analysis 2015, Valuation: techniques,
1.1 Creating Shareholders’ Value market capitalization, financial Measuring and Managing recitation, and
1.1a Enterprise value versus economic profit; techniques with the Value of Companies concept-
equity value  Identify the two major clear instructional (6th Edition) mapping;
1.1b Market capitalization sources of creating value objectives and
1.2 Relationship of Revenue to the entity sequencing and
Growth, Return on Invested Capital key discussion of
and Cash Flow real world
examples thru
2.1 Economic Profit Google Slides,
2.2 Net operating profit after tax Meet
versus invested capital in creating
value to the firm
3-4 3-4. Valuation Techniques  Perform the different Comprehensive Practical Part 2, Koller, T., Visual lectures,
valuation techniques in and procedural exercises/Case Goedhart M., Wessels, D., demonstration
3.1 Comparable Company determining the value of approach of analysis/Excel or 2015, Valuation: techniques,
Analysis an entity using Excel or financial Sheet Calculation Measuring and Managing recitation, and
3.2 Precedent Transaction Sheet spreadsheets; techniques with the Value of Companies concept-
Analysis  Distinguish the clear instructional (6th Edition); Three Main mapping;
3.3 Leverage Buy-out Analysis applicability of the objectives and Approach in Valuation by
various valuation sequencing and Corporate Finance
4.1 Discounted Cash Flow (DCF) techniques; key discussion of Institute©; Street of Walls:
Analysis  Identify which of the real world Financial Training;
4.2 Net Asset Valuation (NAV) valuation techniques is examples thru Investopedia™
Method
 intrinsic or extrinsic- Google Slides,
based Meet

5-6 5-6. Capital Structure and Long-  Explain the concept and Comprehensive Practical Cabrera, M.E.B, Visual lectures,
term Financing elements of a capital and procedural exercises/Case Management demonstration
structure; approach of analysis/Excel or Consultancy, (2015 techniques,
5.1 Concept and elements of  Determine the cost of financial Sheet Calculation Edition), Luehrman, recitation, and
capital structure financing capital using techniques with Timothy A. (2009), concept-
5.2 Cost of financing capital the different approaches; clear instructional Business Valuation and mapping;
5.2a Ke = Cost Equity  Determine the weighted objectives and the Cost of Capital,
5.2ai Risk-free rate and average cost of capital sequencing and Harvard Business
βeta and explain its key discussion of Publishing
5.2aii Gordon-Growth importance to equity real world
Model value; examples thru
5.2b Kd = Cost of long-term  Identify the optimal Google Slides,
debt capital structure and Meet
5.2c Kp = Cost of preferred marginal cost of capital;
stocks  Identify the event wherein
there is a capital break-
6.1 Weighted Average Cost of
point
Capital (WACC)
6.2 Optimal Capital Structure
6.3 Marginal Cost of Capital and
Retained Earnings (RE) Breakpoint
7 MIDTERM ASSESSMENT
8 7. Performance Management,  Enumerate the different Comprehensive Practical Part 3, Koller, T., Visual lectures,
Mergers and Acquisitions, company value drivers; and procedural exercises/Case Goedhart M., Wessels, D., demonstration
Divestitures  Explain the value created approach of analysis 2015, Valuation: techniques,
in mergers and financial Measuring and Managing recitation, and
7.1 Company value drivers acquisitions techniques with the Value of Companies concept-
7.1a Sales productivity  Measure the value lost or clear instructional (6th Edition) mapping;
7.1b Operating-cost the value that would have objectives and
productivity been preserved in sequencing and
7.1c Capital productivity divestitures; key discussion of
7.1d Commercial and asset  Explain the concepts of real world
health metrics lost synergies, pricing examples thru
7.1e Long-term strategic and liquidity, spin-offs Google Slides,
values and carve-outs Meet
 7.2 Value Creation Framework
for Combining Entities
7.2a Value created for
acquirer
7.2b Estimating control
premiums and goodwill
7.2c Framework for estimating
cost-savings

7.3 Divestitures
7.3a Lost synergies
7.3b Pricing and liquidity
7.3c Spin-offs, carve-outs,
reverse acquisitions; tracking stocks

9 8. Option valuation  Identify the major types Comprehensive Practical Jungheen, Hugo D., 2011, Visual lectures,
of options; and procedural exercises/Case Option Valuation: A First demonstration
8.1 European and American  Determine the value of approach of analysis/Excel or Course in Financial techniques,
options, distinguished an option using two major financial Sheet Calculation Mathematics, CRC Press recitation, and
8.2 Black-Scholes formula, types of model; techniques with concept-
Binomial-option pricing model  Explain the clear instructional mapping;
8.3 Properties of option values characteristics of option objectives and
values sequencing and
key discussion of
real world
examples thru
Google Slides,
Meet

10 9. Sensitivity Analysis  Perform sensitivity Comprehensive Practical Satelli, A., Tarantola, S., Visual lectures,
analysis using the and procedural exercises/Case et al, 2004, Sensitivity demonstration
9.1 Measurement of sensitivity different approach in approach of analysis/Excel or Analysis in Practice: A techniques,
9.2 Two Approach to Analyzing Excel or Sheet financial Sheet Calculation Guide to Assessing recitation, and
Sensitivity spreadsheets; techniques with Scientific Models, John concept-
9.2a Local sensitivity  Explain the implications clear instructional Wiley & Sons, Inc. mapping;
approach manifested in sensitivity objectives and
9.2b Global sensitivity indices sequencing and
 approach key discussion of
9.3 Sensitivity index real world
9.3a Correlation analysis examples thru
9.3b Regression analysis Google Slides,
9.3c Subjective sensitivity Meet
analysis

11 10. Emerging Markets  Expound the emerging Comprehensive Practical Part 5, Koller, T., Visual lectures,
markets; and procedural exercises/Case Goedhart M., Wessels, D., demonstration
10.1 Historical Analysis (US and  Categorize the applicable approach of analysis/Excel or 2015, Valuation: techniques,
European setting) cash flow forecasting financial Sheet Calculation Measuring and Managing recitation, and
10.2 Forecasting cash flows methods in emerging techniques with the Value of Companies concept-
10.2a Scenario DCF markets; clear instructional (6th Edition) mapping;
approach  Formulate assumptions objectives and
10.2b Country-risk premium and probabilities in sequencing and
DCF approach forecasting cash flows key discussion of
10.3 Constructing Cash Flows real world
and Probabilities examples thru
Google Slides,
Meet
12 FINAL ASSESSMENT

GRADING:

Periodicals* 40%
Case analysis 30%
Excel, Sheet calculations 20%
Attendance 10%
100%

*Periodicals include midterm and final examinations.

Every grading period shall always include the above components.

TEXTBOOK:
  Koller, T., Goedhart M., Wessels, D., 2015, Valuation: Measuring and Managing the Value of Companies (6 th Edition), John Wiley & Sons, Inc.

REFERENCES:
 Cabrera, Ma. Elenita B, Management Consultancy, (2015 Edition), GIC Enterprises & Co.
 Luehrman, Timothy A. (2009), Business Valuation and the Cost of Capital, Harvard Business Publishing
 Jungheen, Hugo D., 2011, Option Valuation: A First Course in Financial Mathematics, CRC Press
 Satelli, A., Tarantola, S., et al, 2004, Sensitivity Analysis in Practice: A Guide to Assessing Scientific Models, John Wiley & Sons, Inc.