We have great pleasure in presenting First edition “Corporate Valuation” written for students of PG courses. The related matters are written in a simple and easily understandable.
This volume is an attempt to provide the students with thorough understanding of Corporate Valuation. We have presented the subject matter in a systematic manner with liberal use of charts and diagrams where ever necessary so as to make it interesting and sustain students’ interest.
Contents –
Module – 1 Fundamentals of Corporate Valuation
Introduction
Meaning of Valuation
Objectives of Valuation
Valuation vs Pricing
Situations Requiring Valuation:
M&A
IPO
Buyback
Restructuring
Insolvency
Taxation
Litigation
Value Concepts:
Fair Value
Intrinsic Value
Market Value
Strategic Value
Synergistic Value
Liquidation Value
Determinants of Corporate Value
Overview of Valuation Approaches:
Asset-based
Income-based
Market-based
Ethical Issues and Professional Judgment in Valuation
Overview of Valuation Requirements under Companies Act
SEBI (ICDR)
FEMA
Review Questions
Fill in the Blanks
Multiple Choice Question (MCQs)
Short Answer Questions
Long Answer Questions
Module – 2 Asset-Based & Market-Based Valuation Approaches
Introduction
Asset-Based Valuation:
Net Asset Value (NAV) Method
Adjusted Book Value
Replacement Cost Method
Liquidation Value
Market-Based Valuation:
Comparable Companies Analysis (CCA)
Valuation Multiples: P/E, P/B, EV/EBITDA, EV/Sales
Selection of Appropriate Peers
Strengths and Limitations of Relative Valuation
Review Questions
Fill in the Blanks
Multiple Choice Question (MCQs)
Short Answer Questions
Long Answer Questions
Module – 3 Income-Based Valuation Models
Introduction
Discounted Cash Flow (DCF) Framework
Free Cash Flow to Firm (FCFF)
Free Cash Flow to Equity (FCFE)
Dividend Discount Models (DDM)
Zero Growth
Constant Growth (Gordon Model)
Multi-stage Growth Models
Terminal Value Estimation
H-Model and Declining Growth Models
Common Pitfalls in DCF Valuation
Review Questions
Fill in the Blanks
Multiple Choice Question (MCQs)
Short Answer Questions
Long Answer Questions
Module – 4 External Corporate Restructuring
Introduction
External Corporate Restructuring
Types of External Corporate Restructuring
Mergers
Acquisitions
Take Over
De-mergers (Split off and Spinoffs)
Joint Ventures
Mergers and Acquisitions:
Meaning of Mergers and Acquisitions
Objectives of Mergers and Acquisitions
Motives of M&A
Types of Mergers:
Horizontal
Vertical
Conglomerate
Forms of Acquisitions and Takeovers:
Mergers
Acquisitions
Takeovers
Spinoff
Synergies
Strategic Alliance
Joint Venture
Leveraged Buyouts
\Management Buyouts (MBO)
Buy-in (MBI)
Franchising
Intellectual Property Rights (IPRs)
Sell-off
Demerger
Disinvestment v/s Divestment
Slump Sale
Reverse Merger
Equity Carve out
Un-levering and Re-levering
Valuation of Target Firm
Financing of Mergers and Acquisitions
Determination of Exchange Ratio
Terms of Merger
Feasibility of Mergers
Review Questions
Fill in the Blanks
Multiple Choice Question (MCQs)
Short Answer Questions
Long Answer Questions
Module – 5 Advanced Valuation Applications & Contemporary Issues
Introduction
Valuation for Mergers and Acquisitions
Synergy Valuation
Numerical Problems on Determination of Exchange/ Swap Ratio
Pre & Post-merger EPS
Shareholder Wealth Implications
Value-based Performance Measures:
Economic Value Added (EVA)
Market Value Added (MVA)
Linkage with Firm Valuation
Valuation of Startups and High-growth Firms
Valuation of Brands and Intangibles
Valuation under Distress and Insolvency
Valuation Adjustments under Ind AS / IFRS
Role of Valuation in Strategic Decision-making
Limitations of Valuation Models. (Mini case / project on valuation of an Indian company)
Review Questions
Fill in the Blanks
Multiple Choice Question (MCQs)
Short Answer Questions
Long Answer Questions
