Upon completion of the course, students are expected to be able to:
- assess and analyze financial statement information;
- analyze business valuation using different theories and methods;
- explain corporate governance theories, mechanisms and the cross‐country differences;
- evaluate scientific research on the functioning of corporate governance mechanisms and their impact on firm value.
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Aim
The course aims to provide students with advanced level knowledge and insights on business valuation and corporate governance mechanisms.
Course description
The course combines valuation and corporate governance – two important learning areas for any student of modern business administration. Almost every strategic business decision involves implicit or explicit knowledge on valuation and/or understanding its impact on value. Knowledge on corporate governance is essential to understand the direction & control of companies and the complex & conflicting relationships among various stakeholders. The course will therefore explain different approaches to firm valuation and how it is affected by different corporate governance mechanisms. In doing so, students will learn analyzing a firm’s current and projected financial statements and using these & other (macro‐economic and industry‐specific) information to estimate firm value. Afterwards, students will become familiar with the typical corporate governance features of firms and their functioning in international context. The course will introduce students leading theories and methods used in business valuation and corporate governance, with an emphasis on examining a few research questions.
The course has two partsone part related to business valuation is based on studying selected chapters of a textbook, while the other part related to corporate governance is devoted to the discussion of a few academic articles. Course learning objectives will be realized by a combination of lectures and assignment. Lectures are mainly used to introduce theoretical concepts, highlight important issues
& practices, and explain the steps necessary in undertaking business valuation and learning the effectiveness of major corporate governance mechanisms. The assignment will enable students to learn the application of theories and develop problem‐solving & analytical skills. Students are strongly advised to read the required literature (textbook chapters and journal articles) before each lecture, a practice that will enable them to actively participate in class discussions. In all lectures, student will get ample opportunity to ask questions or discuss things (s)he does not understand
Key words
Business valuation, business analysis, financial statements, corporate governance, theories and mechanisms.
Assessment
The final mark a student will receive consists of a group assignment (30%), and a final examination (70%).
Group assignment (30% of the final mark)
Students will form groups of 4‐5 persons and work on an assignment. Its objective is to perform valuation analysis of a stock-exchange listed company. Taking the role of a business analyst, each group will assess the current valuation of a company's shares, and give a recommendation to investors whether to buy, hold or sell the shares. The assignment will allow students to demonstrate their ability in performing business analysis using a scientific approach, but also to improve their analytical and managerial (team work, leadership and project management) skills.
Individual examination (70% of the final mark)
The exam will contain descriptive, theoretical and quantitative questions based on comprehensive course materials (lecture slides, textbook chapters and articles).
Contribution to the program learning goals (*See appendix or click here for the aims and intended learning outcomes):
During the course, students discuss valuation and corporate governance problems and research questions (goal 1.1); critically evaluate theories and valuation models (goals 1.2 and 1.3); analyze and evaluate financial statement information (goals 1.3, 2.2 and 2.4); assess the functioning of corporate governance mechanisms and cross‐country differences (goals 1.4, 2.1 and 3.4); estimate firm value and provide recommendation (goal 2.3); work in a group and practice communication, project‐management and problem‐solving skills (goal 3.1).
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