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| Version 2012-2013 |
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| FINA0050-1 | Valuation and Capital Budgeting
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| Durée : | 30h Th |
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| Nombre de crédits : |
| Master en sciences de gestion, à finalité approfondie, 1re année | | 5 |
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| Master en sciences de gestion, à finalité didactique, 1re année | | 5 |
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| Master en sciences de gestion, à finalité spécialisée en Banking and Asset Management, 1re année | | 5 |
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| Master en ingénieur de gestion, à finalité spécialisée en Performance Management and Control, 1re année | | 5 |
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| Master en sciences de gestion, à finalité spécialisée en droit et gestion, 2e année | | 5 |
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| Master en sciences de gestion, à finalité spécialisée en droit, 1re année | | 5 |
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| Master en ingénieur de gestion, à finalité spécialisée en Financial Engineering, 1re année | | 5 |
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| Master en sciences de gestion à finalité spécialisée en entrepreneuriat, 1re année | | 5 |
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| Master en sciences de gestion, à finalité spécialisée en Financial Analysis and Audit, 1re année | | 5 |
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| Master en sciences de gestion, à finalité spécialisée, 1re année | | 5 |
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| Master en sciences de gestion, à finalité spécialisée en management humain et organisation, 1re année | | 5 |
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| Master en ingénieur de gestion, à finalité spécialisée, 1re année | | 5 |
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| Master en ingénieur de gestion, à finalité spécialisée en intrapreneuriat, 1re année | | 5 |
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| Master en sciences de gestion, à finalité spécialisée en management, 1re année | | 5 |
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| Master en sciences de gestion, à finalité spécialisée en marketing and strategic intelligence, 1re année | | 5 |
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| Master en ingénieur de gestion, à finalité spécialisée en Modélisation et technologie, 1re année | | 5 |
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| Master en sciences de gestion, à finalité spécialisée en management des entreprises sociales, 1re année | | 5 |
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| Master en sciences de gestion, à finalité spécialisée en intelligence stratégique et marketing, 1re année | | 5 |
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| Master en ingénieur de gestion, à finalité spécialisée en Supply Chain Management, 1re année | | 5 |
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| Master en ingénieur de gestion, à finalité spécialisée en Performance Management Systems, 1re année | | 5 |
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| Master en sciences de gestion | | 5 |
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| Nom du professeur : | Marie Lambert, Alain Schockert |
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| Coordinateur(s) : | Marie Lambert |
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Langue(s) du cours :
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| Langue anglaise |
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Organisation et évaluation :
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| Enseignement au premier quadrimestre, examen en janvier |
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Contenus du cours :
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| The Valuation and Capital Budgeting course is organized into two distinct but related parts: Capital Budgeting and Firm Valuation.
Part one 'Capital Budgeting' lays the theoretical foundations for all the topics to follow. Students will acquire theoretical knowledge and practical skills for valuing corporate investment projects.
Module 1 provides an introduction to capital budgeting and reviews the prerequisites (financial mathematics and financial market theory) of the course. Module 2 introduces the Discounted Cash Flow method and provides guidelines for computing the Net Present Value of an investment project. Module 3 discusses alternative investment rules (Internal Rate of Returns, the Payback and Accounting Rate of Return criterions) and demonstrates the superiority of the NPV criterion. Module 4 covers the following techniques to capture the impact of financing on project valuation: the Adjusted Present Value and the Weighted Average Cost of Capital.
Part two 'Valuation' presents guidelines for firm valuation. Students will study in which circumstances a company needs to be valued and how to proceed. Special attention will be given to corporate events like Initial Public Offering and Merger and Acquisition.
Throughout the course, illustrative cases and practical exercises will be discussed in class.
Outline
Part I: Capital Budgeting
Basics of discounting and valuation
Valuing real assets
- Tracking portfolio approach: Net Present Value criterion and Discounted Cash Flow method (risk-adjusted discount rate method)
- Alternative investment rules
Valuing real assets with corporate taxes
- Adjusted Present Value method
- Weighted Average Cost of Capital
Case study analysis
Part II: Firm Valuation
- Economic cycle, interest rates and financial assets
- Valuation methods
- Initial Public Offering (IPO)
- Mergers and acquisitions
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Acquis d'apprentissage (objectifs d'apprentissage) du cours :
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| At the end of the course, students will
- (1) acquire the fundamental knowledge and understanding in financial management to perform a rigorous analysis of a management problem such as an investment project or a firm valuation.
Students will be able to (i) compute and forecast cash flows used for project or firm valuation (ii) estimate the prevalent cost of capital to be used to discount cash flows (iii) compute the Present Value of an investment project or a firm (iv) value business acquisition opportunities.
- (2) be able to solve autonomously concrete complex and transversal financial management problems such as the acquisition of a firm or the investment in a real project by applying modelization tools and by collecting market data.
Part one concludes with one practical case study where students will apply the tools they have acquired throughout the different modules to value a real investment project. In Part two, students will work on the strategic acquisition of an enterprise by submitting a price offer based on a comprehensive review of market information and of the enterprise accounts as well as strategic considerations.
- (3) strengthen their business English and develop a transversal view of a financial management problem in the specific context of a firm or project valuation and financing
Ce cours contribue aux attendus d'apprentissage suivants :
ILO-1 : Renforcer ses connaissances et sa compréhension des disciplines de gestion ainsi que son contexte juridique, politique et social.
ILO-2 : Acquérir les connaissances et la compréhension de l'une des disciplines de spécialisation Ou approfondir sa connaissance du domaine de spécialisation par l'effectuation d'un premier Master de niveau universitaire.
ILO-4 : Rechercher de manière autonome et méthodique l'information nécessaire à la résolution d'un problème de gestion transversal et complexe. |
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Prérequis et corequis / Modules de cours optionnels recommandés :
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| The course will extend students' knowledge acquired during an initial bachelor's degree in management. The course therefore requires basic knowledge in financial mathematics and financial markets. As a prerequisite, students are invited to read Chapters 2,3,4,5 of Hillier, Grinblatt and Titman, Financial Markets and Corporate Strategy (second European edition). |
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Activités d'apprentissage prévues et méthodes d'enseignement :
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| The course will be structured around lectures, exercise sessions in groups and case study analyses.
Lectures will transfer to students the theoretical knowledge and the practical tools for solving complex investment and firm valuation problems.
Exercise sessions in groups will allow students to apply the tools learnt during the course on a selection of financial management problems.
Case study analyses will enable students to test their capacity to research autonomously and methodically the information needed to solve a transversal management problem and to test their capacity to use modelization tools to propose rigorous solutions to complex financial management problems. |
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Mode d'enseignement (présentiel ; enseignement à distance) :
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| The course is composed of face-to-face lectures and exercise sessions. Exercise sessions and case study analyses will be prepared through distance learning. |
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Lectures recommandées ou obligatoires et notes de cours :
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| Mandatory readings
- Hillier, Grinblatt and Titman, Financial Markets and Corporate Strategy, McGraw-Hill, Second European Edition
- Valuation, A. Schockert - Managing Director at Banque Degroof, 2013-2014, HEC-ULg
These readings will enable students to deepen their understanding of the key concepts seen throughout the course. Students' understanding will be tested at the written exam.
The course material (slides, case studies and exercises) will be available on the course web page on lol@. |
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Modalités d'évaluation et critères :
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| Students' final grade for the course is composed of an evaluation of students' engagement during the course (10%) and of a final evaluation (90%).
The final written exam will assess students' understanding of the valuation concepts as well as students' capacity to solve valuation problems. This will make up 90% of their final grade.
Active class participation will make up 10% of the student's grade: students will be assessed on their attendance to the exercise sessions as well as on their class preparations. Exercises and case studies should be prepared and submitted on lol@ by the day before the session.
Relative weighting of individual assessment : 100%
Students who fail the January exam or do not present themselves at the exam will have to retake the exam in the second session organized in August/September. The exam is made of two parts 'Capital Budgeting - M. Lambert' and 'Valuation - A. Schockert'. No partial waiver will be granted: in case of failure to the exam, students have to retake both parts. |
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Stage(s) :
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| None |
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Remarques organisationnelles :
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| Students have the opportunity to ask questions on the material during the class and at the end of each session. Questions and Answers sessions with the tutors will be organized at specific times. A final Questions and Answers session will be organized in December.
Students are invited to check the lol@ platform on a regular basis for any practical information regarding the course. |
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Contacts :
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| Professors
Marie Lambert - Assistant Professor HEC-ULg - marie.lambert@ulg.ac.be
Alain Schockert - Managing Director Banque Degroof - alain.schockert@degroof.be
Tutor: Joachim Davoli - joachim.davoli@ulg.ac.be
Student instructors :
Céline Ferri - cferri@student.ulg.ac.be
Fabrice Willems - fwillems@student.ulg.ac.be |
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