Course requirements
Master degree in Law. This course is part of the Advanced Master Law and Finance.
More information: https://www.universiteitleiden.nl/en/education/study-programmes/master/law-and-finance
Course information
This course is dedicated to corporate finance, valuation methodologies, and valuation applications. Corporate finance and valuation are most commonly used for investment and financing decisions, among others, in the context of transactions , value creation strategies, and financial reporting purposes. Hence, this course will start to explain the fundamentals of the corporate finance landscape, its actors, and the background for the requirements of valuations.
The course aims to provide lawyers with a basic understanding of the theoretical foundations of corporate finance and valuation fundamentals by explaining their conceptual levels and standards. Various valuation methodologies (e.g., income and market approaches) will be discussed against the backdrop of mergers, takeovers (sell-side and buy-side), ownership disputes, economic damages, and financial reporting. In addition, time will be spent on understanding the dynamics of valuations in relation to the role of uncertainty and risk, the key‘drivers of value, developing and judging forecasts, the cost of capital, and valuation adjustments such as premiums and discounts.
Apart from the financial aspects, we will also discuss the broad legal context that relates to corporate finance and valuation issues. Concrete cases will be presented throughout the course to learn how to apply this knowledge in practice. Upon completion of the course, students should be able to comprehend the aspects of valuations and will gain an understanding of the context in which valuations are being used.
This course expands on the course Financial Reporting and requires a basic understanding of financial statement analysis.
Course learning objectives
This course aims to offer students a broad introduction to the themes of corporate finance and to increase their understanding of valuation methodologies. After completing the course:
Students are able to explain the drivers of investment and financing decisions in the context of M&A decisions and are able to identify the various actors involved.
Students are able to understand valuation principles and theory and how to relate them to M&A decisions.
Students are able to conduct a business valuation, interpret and judge a business valuation, and understand its limitations.
Students are able to describe the various valuation methods available, such as DCF, Comparable Company Analysis, and Precedent Transaction Analysis, including capital markets pricing mechanisms.
Students are able to calculate/understand free cash flows and cost of capital calculations.
Students are able to answer concrete case questions and present answers.
Mode of instruction
Lectures and seminars will be held on a weekly schedule in a classroom setting with mandatory class attendance. Only when required by government regulation or decided by the Programme Board will teaching be conducted in an online setting.
Lectures
Number of (2-hour) lectures: 10
Names of lecturers: dr. mr. Marc J.R. Broekema MBV RV, guest lecturer.
Required preparation by students: reading of prescribed materials
Examination method
Written (group) assignment and presentation: 30%
Final exam: 70%
The Written assignment will consist of conducting a concrete valuation case covering topics discussed in the course. The Written assignment will be made available to students and should be submitted via Brightspace.
The final exam will cover all the course materials discussed in the course.
The final grade, on a scale from 1 (poor) to 10 (outstanding), for the complete course will be the weighted average of the written assignment and the Final exam.
Further information about the written assignment and the final exam will be communicated to students through Brightspace and closer to the assessment date.
Brightspace
Course information and additional materials will be distributed through Brightspace.
Course materials
McKinsey & Company, T.Koller, M. Goedhart, D.Wessels, Valuation: Measuring and Managing the Value of Companies, University Edition, 7th edition, John Wiley & Sons.
Additional materials will be distributed through Brightspace.
Contact
Course Coordinator:
dr. mr. Marc J.R. Broekema MBV RV
Programme Coordinator:
Ms. Orsolya Kalsbeek-Bagdi
Email address: lawandfinance@law.leidenuniv.nl
Disclaimer: Should there be any future extenuating circumstances which may impinge our teaching and assessment, these could necessitate modification of the course descriptions after 1 September. This will only happen in the event of strict necessity and the interests of the students will be taken into account. Should there be a need for any change during the course, this will be informed to all students on a timely basis. Modifications after 1 September 2023 may only be done with the approval and consent of the Faculty Board and Programme Director.