Teacher
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MECHELLI Alessandro
(syllabus)
The course presents the most common techniques conveniently adaptable to estimate the value of both the listed and unlisted private entities. After an introduction around both the most relevant topics of the value creation theory and the concept of the economic value of the firm, the primary valuation methodologies, discussed during the course, include, first of all, the indirect methodologies that are: - the equity-side methods based on the discount of earnings; - the equity-side and the asset-side methods based on the discount of cash flows; - the simple and the complex balance sheet methodology; - the classical mixed methods, included the Union of European accounting experts (UEC) that is compared and contrasted with the Economic Value Added (EVA).
Once presented the indirect methodologies, the course deepens the direct ones, discussing their strengths and weaknesses in the evaluation process. Among the direct methods, the lessons focus on: - the method based on the use of stock prices; - the ratio analysis that allows valuing a firm using multiples, both asset-side and equity-side, of comparable firms; - the method of comparable operations.
Discussion around the methodologies useful to estimate the value of the firm also covers the advantages and disadvantage of adding complexity to a valuation model and identifies various forms of biases that are inherent in most valuations. A source of complexity is due to the consideration in the evaluation process of real options. In this regard, after presenting the theoretical framework of real options, the lessons focus on the most common option pricing models other than the limitations intrinsic in the use of such instruments. In the last part of the course, the most relevant topics that involve the preparation and the presentation of the consolidated annual reports are discussed, with particular reference to: 1) the elimination of the carrying amount of the parent’s investment in each subsidiary; 2) the combination of items of assets, liabilities, equity, revenues, expenses and cash flows of the parent with those of its subsidiaries, 3) the eliminations of any effects in the income statement and in the balance sheet related to transactions between the entities of the group.
(reference books)
G. Zanda, M Lacchini, T. Onesti, La valutazione delle aziende, V Edizione, Giappichelli, Torino, 2013, (integralmente, con la sola esclusione dei capitoli XIII, XV, XVII e XVIII) A. Mechelli, Creazione di valore e stima del risultato di periodo. Principi modelli e metodologie, Giuffrè Milano, 2005, Capitoli I (limitatamente ai parr. 1.5, 1.5.1, 1.5.2 e 1.5.3), IV (limitatamente ai parr. 4.4 e 4.5), V, VI, VII, VIII e IX. Materiale didattico a cura del docente
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