BUSINESS VALUATION

Mario Vitale, Francesco Canzonieri
Mario Vitale
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Francesco Canzonieri
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Course code:
FIN01
General discipline (SSD):
ECON-09/A
Course year:
1
Semester:
Secondo Semestre
Partition of students:
A
Credits:
8
Teaching language:
English
Total lesson hours:
64
Academic year:
2026/2027
Description
Extended program and reference teaching materials

Instructional goals

The aim of the course is to provide candidates with the main tools required to conduct business valuations

Prerequisites

Financial mathematics Accounting and financial reporting Corporate Finance Fundamentals of corporate valuation, cost of capital and capital structure

Intended learning outcomes

The course will cover the main valuation models from both theoretical and practical perspectives. Professional best practices will be also provided along with case studies

Course Contents

Lesson 1: Introduction to business valuation and valuation methodologies Lesson 2: DCF valuation and the estimation of the cost of capital (1/2) Lesson 3: DCF valuation and the estimation of the cost of capital (2/2) and practical exercise Lesson 4: Other business valuation methods (1/2) Lesson 5: Other business valuation methods (2/2), practical exercise and introduction of the group assignment Lesson 6: valuation of corporate groups, impairment test and practical exercise Lesson 7: start-up valuation and valuation in M&A and LBO transactions Lesson 8: valuation of distressed companies and practical exercise Lesson 9: valuation in legal context, fairness opinions and practical exercise Lesson 10: the relationship between accounting and value, focus on the RIM and practical exercise Lesson 11: systematic approach to business valuation, case studies and practical applications - group assignment presentations Lesson 12: Group assignment presentations

Reference Books

M. Vulpiani, "Special Cases of Business Valuation", 1st edition, McGraw Hill

Teaching Methods

Classroom teaching Case study Analysis Guest speakers Presentations Group assignments Practical exercises

Assessment Method

For students with attendance above 70%: mandatory written test consisting of open-ended and multiple-choice answers (67%) + group assignment (33%) For students with less than 70% of attendance: mandatory written test (100%) with open-ended and multiple-choice answers

Thesis assignment criteria

Presentation of a thesis proposal aligned with the course content.

Week 1

Part 1: course introduction, business valuation, enterprise value, difference between value and price, market evidence, and the main valuation methods. Part 2: financial valuation methods, theoretical foundations (MM, Gordon model), discounted cash flow (DCF) analysis, practical exercise: simplified application of the DCF method

Week 2

Part 1: approaches for determining the key DCF drivers (explicit-period Free Cash Flow, normalized Free Cash Flow, cost of capital and growth rate). Part 2: cost of capital, methods for estimating the cost of capital, levering and unlevering techniques (Hamada formula, etc.), risk premiums, methods for estimating the other inputs required for WACC calculation (capital structure weights, cost of debt, etc.)

Week 3

Part 1: specific risk: evidence from market practice and market data, and possible approaches to its quantification Part 2: practical exercise: application of the DCF method, including WACC calculation

Week 4

Part 1: Market multiples method, income-based valuation method, and asset-based valuation method Part 2: Economic Value Added (EVA) method and mixed valuation method (asset-based and income-based approach)

Week 5

Part 1: kickoff on group assignment and Adjusted Present Value (APV) method Part 2: Practical exercise: application of valuation methods other than DCF

Week 6

Part 1: valuation of corporate groups Part 2: valuation for financial reporting, impairment test and practical exercise

Week 7

Part 1: valuation of small businesses and start ups Part 2: valuation in M&A and LBO transactions

Week 8

Part 1: valuation of distressed companies Part 2: practical exercise

Week 9

Part 1: valuation in legal context and fairness opinion Part 2: practical exercise

Week 10

Part 1: the relationship between accounting and value: focus on the residual income model Parte 2: practical exercise

Week 11

Part 1: recap of main methodologies along with best practices, understanding the right valuation methodologies in a given context, case studies Part 2: group assignment presentation

Week 12

Part 1 and 2: group assignment presentation