Bangalore University, VTU, MBA Second 3rd Third SemesterSyllabus3.3.3: CORPORATE VALUATION AND RESTRUCTURINGModule-I: Basics of Business Valuation (8 Hours)Introduction, Purpose of Valuation, Distinction between Price and Value, Principles and Techniques of Valuation, Role of Valuation, Key Areas of Valuation, Concepts of Value: Market Value, Fair Value, Book Value, Intrinsic Value, Investment Value, Liquidation Value, Replacement Value. Role of Valuation in Business Acquisition and Corporate Finance, Valuation Process. Module-II: Valuation Models (10 Hours)Approaches/Methods of Valuation: Asset-Based Approach, Earnings Based Approach (Earnings-Capitalisation Method, P/E Ratio), DCF Approach: Market Value Based Approach, Market Value Added Approach. Enterprise DCF Valuation: Two Stage and Three Stage Growth Models, Relative Valuation –Direct Comparison and Peer Group Approach, Contingent Claim Valuation. Module-III: Enterprise Valuation (8 Hours)Valuation of Firm in Pieces: Valuation of Debentures, Valuation of Equity Shares, Valuation of Preference Shares. Equity DCF Model (Dividend Discount Model and FCFE Model), Adjusted Present Value (APV) Model, Economic Profit Model. Module-IV: Intellectual Capital Valuation (6 Hours)Components and Valuation of Intellectual Capital: Market to Book Ratio. Tobin’s Q, Analytical Approaches: Economic Value Added, Balanced Score Card, Human Resource Accounting. Module-V: Corporate Restructuring (14 Hours)Introduction and Types of Corporate Restructuring.Expansion: Amalgamation, Absorption, Tender Offer, Asset Acquisition and Joint Venture.Contraction: Spinoff, Split Ups, Equity Carve out Divestiture, Asset Sale.Corporate Controls: Going Private, Equity Buyback, Leveraged Buyouts, Anti Takeover Defense. Module-VI: Valuation of Mergers & Acquisition (10 Hours)Concepts of Value in Context of Mergers & Acquisitions. Approaches to Valuation in Case of M&A: DCF Approach, Selection of Appropriate Cost of Capital for Valuation, Process of Selecting Target Companies, Forms of Consideration and Terms of Acquisitions, Implications of Regulations for Business Combinations, Post Merger Integration Process, Types of Exit Strategies and their Implications, Shareholder Value Analysis, Exchange Ratio-Bases Used for Computation.
BU2022/MBA/3/07
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