Proposed Course Outline
Subject: Corporate Valuation
Faculty: Dr. Parvinder Arora
A. Course Objectives
An important goal of corporate finance analysis is to value a firm and the course therefore focuses
on learning of core valuation concepts, tools and skills with this goal as the key outcome objective.
The course covers the various methods of corporate valuation and follows a case based approach to
enable the students to put finance concepts into practical frameworks for valuing firms and
businesses.
The course also familiarises students with the usage of spread sheets to build financial models for
valuation and appreciate the linkages between valuation and strategy of firms.
B. Reference Books
 Damodaran, A. (2006), Damodaran on Valuation, New Jersey: John Wiley & Sons
 Palepu, Healy and Bernard (2009), Business Analysis and Valuation, Thomson South Western,
 Copeland, Koller and Murrin (2000), Measuring and Managing the Value of Companies, John Wiley &
Sons
C. Course Category and Pre – Requisite Courses
1. Prequisite Courses: Corporate Finance
D. Course Pedagogy
 The pre-requisite for the course is that students are familiar with the basic accounting
methodology and Corporate Finance concepts.
 The most important requirements for this course are a thorough preparation and analysis of the
assigned cases and reading materials and active participation in the classroom.
 The course focuses on class discussions of cases and problems. Attendance, preparation for class
and class participation are essential.
 The course is built almost exclusively around the case method.
 Only the assigned cases will be discussed in the class (not the assigned readings) but the
readings will help students in tackling the case.
 I expect students to have already thought through and analyzed the cases when they come to
class. This way, we can devote the bulk of the class time to thinking about, and responding to,
each other's analyses of the cases and only the necessary minimum to getting the facts out.
 I shall be available for consultation during the course. Please set up an appointment for
consultation, if required.
E. Evaluation
Assessment Type
When assessed
Weighting
Case Analysis
Simulation
Group Project (Report and Presentation)
Written Exam
On Going
Session 12-13
Session 12-13
End Term
10%
10%
20%
60%
F. Day Wise Plan
Day 1:An Introduction to Valuation and Role of Valuation
Reading:
Why Value Value? (Copeland)
Luehrman, Timothy A., (1997) what’s It Worth? A General Manager’s Guide to Valuation, Harvard
Business Review, Harvard Business Publishing
Case1- Paint Pen, Inc.
Day 2-3: Discounted Cash Flow (DCF) Valuation-Calculation of Cost of Capital
Reading:
Luehrman, Timothy A. (2009), Business Valuation and the Cost of Capital, Harvard Business
Publishing
Case -2 - Nike Inc., Cost of Capital
Day 4: Discounted Cash Flow (DCF) Valuation: Value Drivers, Forecasting Cash Flows
Reading:
Richard S. Ruback (1995), Introduction to Cash Flow Valuation Methods, Harvard Business Publishing
Greenwood, Robin and David S. Scharfstein (2010), Calculating Free Cash Flows, Harvard Business
Publishing
Case 3: Value Line Publishing
Day 5: Discounted Cash Flow (DCF) Valuation -Estimating Terminal Values
Readings
Fruhan Jr. William E. (1998), Note on Alternative Methods for Estimating Terminal Values, Harvard
Business Publishing,
Case -4 Rocky Mountain Advanced Genome
Day 6: Valuing Companies: Discounted Cash Flow (DCF) and Market Multiples
Case 5– Radio One
Readings:
Luehrman, Timothy A. (2009), Corporate Valuation and Market Multiples, Harvard Business
Publishing
Eberhart, Allan C. (2001), Comparable firms and the precision of equity valuations, Journal of
Banking & Finance, Volume 25, Issue 7, Pages 1367-1400
Day 7: Valuing Companies: Discounted Cash Flow (DCF) and Market Multiples
Case 6- Health Development Corporation
Day 8: Capital Structure and Valuation: Capital Cash Flows Method
Readings
Ruback, Richard S. (1995), Note on Capital Cash Flows, Harvard Business Publishing
Bertoneche, Marc L., Maurer, Frantz (2006), Valuation Methods and Discount Rate Issues - A
Comprehensive Note, Harvard Business Publishing
Case 7 - Sampa Video, Inc.
Day 9: Capital Structure and Valuation: Capital Cash Flows Method and Adjusted Present Value
Method
Reading
Luehrman, Timothy A. (1997), Using APV: A Better Tool for Valuing Operations, Harvard Business
Review, Harvard Business Publishing.
Case 8 – Valuation of Air-Thread Connections
Day 10: Operating/Financial Strategies and Valuation
Reading
Baldwin, Carliss Y. (2001), Technical Note on LBO Valuation (A): LBO Structure and the Target IRR
Method of Valuation, Harvard Business Publishing
Case 9 – RJR Nabisco
Day 11: Valuation in Venture Capital or Private Equity Setting
Case: EatOnline.Com
Day 12,13
Students’ Valuation Project Presentations: The entire class will be divided into the teams of 3-4
students each. Each team will have to work on a valuation project of a given company. The details of
the project will be distributed in the first session. The students will have to submit the project writeup and make a presentation. The evaluation will be based on the write up and the presentation.
Day 14: Wine Country Simulation (V2)
Online Harvard Simulation and Learnings from the Simulation and Debrief
Day 15: Reflections (Faculty will be available for Q&A)
G. Class Schedule
The classes will be scheduled on the following days:
Day 1
Day 2
Day 3
Wednesday, 2 July, 14
Thursday, 3 July, 14
Friday, 4 July, 14
9:00 am
9:00 am
9:00 am
1:00 pm
1:00 pm
1:00 pm
Weekend
Day 4
Day 5
Day 6
Day 7
Day 8
Monday, 7 July, 14
Tuesday, 8 July, 14
Wednesday, 9 July, 14
Thursday, 10 July, 14
Friday, 11 July, 14
9:00 am
9:00 am
9:00 am
9:00 am
9:00 am
1:00 pm
1:00 pm
1:00 pm
1:00 pm
1:00 pm
Weekend
Day 9
Monday, 14 July, 14
9:00 am
1:00 pm
Day 10
Day 11
Day 12
Day 13
Tuesday, 15 July, 14
Wednesday, 16 July, 14
Thursday, 17 July, 14
Friday, 18 July, 14
9:00 am
9:00 am
9:00 am
9:00 am
1:00 pm
1:00 pm
1:00 pm
1:00 pm
Weekend
Day 14
Day 15
Monday, 21 July, 14
Tuesday, 22 July, 14
9:00 am
9:00 am
1:00 pm
1:00 pm