CORPFIN 7039 - Equity Valuation & Analysis (M)
North Terrace Campus - Semester 1 - 2023
General Course Information
Course Code CORPFIN 7039 Course Equity Valuation & Analysis (M) Coordinating Unit Adelaide Business School Term Semester 1 Level Postgraduate Coursework Location/s North Terrace Campus Units 3 Contact Up to 36 hours per Semester Available for Study Abroad and Exchange Y Prerequisites ACCTING 7019, CORPFIN 7005 Assumed Knowledge CORPFIN 7033, COMMERCE 7033, ECON 7200 Course Description This course analyses companies from a fundamental perspective in order to derive the intrinsic value of stocks. Topics include fundamental analysis and determination of growth; discount cash flows models including dividend discount models and free cash flow models; relative valuation models including price-earnings and price-book multiples; estimating the discount rate; valuation of firms in financial distress, investment in other firms, and mergers and acquisitions.
Course Coordinator: Dr Jane LuoSEMESTER 2:
Dr. Jane Luo
MELBOURNE CAMPUS TRIMESTER 3:
Dr. Jane Luo
The full timetable of all activities for this course can be accessed from Course Planner.
Course Learning OutcomesOn successful completion of this course, students will be able to:
1. Conduct valuations based on the discounted cash flow method.
2. Perform a relative valuation for a company.
3. Utilise the techniques in valuing mergers and acquisitions.
4. Apply the methodologies in valuing firms in financial distress and equity investment in other firms.
5. Critically analyse publicly available information and write a business valuation report.
University Graduate Attributes
This course will provide students with an opportunity to develop the Graduate Attribute(s) specified below:
University Graduate Attribute Course Learning Outcome(s)
Attribute 1: Deep discipline knowledge and intellectual breadth
Graduates have comprehensive knowledge and understanding of their subject area, the ability to engage with different traditions of thought, and the ability to apply their knowledge in practice including in multi-disciplinary or multi-professional contexts.
Attribute 2: Creative and critical thinking, and problem solving
Graduates are effective problems-solvers, able to apply critical, creative and evidence-based thinking to conceive innovative responses to future challenges.
Attribute 3: Teamwork and communication skills
Graduates convey ideas and information effectively to a range of audiences for a variety of purposes and contribute in a positive and collaborative manner to achieving common goals.
Attribute 4: Professionalism and leadership readiness
Graduates engage in professional behaviour and have the potential to be entrepreneurial and take leadership roles in their chosen occupations or careers and communities.
Attribute 5: Intercultural and ethical competency
Graduates are responsible and effective global citizens whose personal values and practices are consistent with their roles as responsible members of society.
Attribute 6: Australian Aboriginal and Torres Strait Islander cultural competency
Graduates have an understanding of, and respect for, Australian Aboriginal and Torres Strait Islander values, culture and knowledge.
Attribute 7: Digital capabilities
Graduates are well prepared for living, learning and working in a digital society.
Attribute 8: Self-awareness and emotional intelligence
Graduates are self-aware and reflective; they are flexible and resilient and have the capacity to accept and give constructive feedback; they act with integrity and take responsibility for their actions.
Required ResourcesLecture notes, tutorial materials & the study guide provided on myuni website. Please go over the lecture notes and the relevant chapters in advance of lectures.
Text Book(s) not compulsory
Damodaran, 2006, "Damodaran on Valuation" 2nd ed, John Wiley & Sons ; Damodaran, 2012. "Investment Valuation: Tools and Techniques for Determining the Value of Any Assets" 3rd ed, John Wiley & Sons. (available online/physical copy in library)
Lecture notes will follow chapters 1-9 and 12 from Damodaran's textbook plus a few additional topics.
Recommended ResourcesPinto, Henry, Robinson & Stowe (2010) Equity Asset Valuation (2nd ed)
Ross, S., R. Westerfield, J. Jaffe, and B. Jordan, 2019. 'Corporate Finance', (12th ed).
Lonergan, 2003. ‘The Valuation of Businesses, Shares and Other Equity’ (4th ed)
Learning & Teaching Activities
Learning & Teaching ModesThe course is taught via seminar-based classes, reinforced through class participation in problem-solving.
The information below is provided as a guide to assist students in engaging appropriately with the course requirements.The information below is provided as a guide to assist students in engaging appropriately with the course requirements.
The University expects full-time students (i.e. those taking 12 units per semester) to devote a total of 48 hours per week (over 12 weeks) to their studies. This means that you are expected to commit approximately 108 hours (9 hours x 12 week) for a three-unit course of private study outside of your seminars. Students are expected to attend all seminars.
Learning Activities Summary
Topics for Study Study
1 1 An introduction to valuation & financial maths Chp 1 2 2 Relationship between earnings and capital: Understanding financial reports Chp 2 1 3 2 Relationship between earnings and capital: Understanding financial reports (continued) Chp 2 2 4 3 Market based valuation: Price Multiples Chp 6 3 5 4 Free cash flow models Chp 3 4 6 - Mid-semester test: More details will be provided early in the semester. - - 7 4, 5 Free cash flow models (continued) &
Fundamental analysis and forecasting
Chp 3, 4 5 8 5 Fundamental analysis and forecasting (continued) Chp 4 6 9 6 Estimating the discount rate Chp 5 7 10 7 Takeovers Chp 7 8 11 8 Financial distress and cross shareholding Chp 8 9 12 9 Technical trading and other aspects of valuation Chp 10 10
The University's policy on Assessment for Coursework Programs is based on the following four principles:
- Assessment must encourage and reinforce learning.
- Assessment must enable robust and fair judgements about student performance.
- Assessment practices must be fair and equitable to students and give them the opportunity to demonstrate what they have learned.
- Assessment must maintain academic standards.
Assessment Task Due Weighting Learning Outcome Mid Semester Test Week 6 15% 1 Assignment Week 12 25% 5 Final Exam During exam period 60% 1,2,3,4 Total 100%
Assessment Related Requirements
Notes on Assessment
1. To gain a pass for this course, a total of at least 50% overall is required. Neither the test nor the assignment is redeemable.
2. Legible hand-writing and the quality of English expression are considered to be integral parts of the assessment process. Marks may be deducted in the final examination if markers cannot understand answers due to poor hand-writing.
3. Assessment marks prior to the final exam will be displayed on the course website. Students are encouraged to check their marks and notify the Lecturer-in-Charge of any discrepancies.
Test: 15 %
Details: Further information regarding the test will be provided during the semester.
Details: The assignment is compulsory and will be made available on the 'myuni' website. The assignment is non-redeemable.
Final Exam: 60%
More details will be provided closer to the date.
Assignments are compulsory and will be posted on the ‘MyUni’ website.
The assignment must be submitted electronically, by the group leader. Further details regarding the assignment will be provided during the semester.
PRESENTATION OF ASSIGNMENTS
• Please retain a copy of all assignments submitted.
• The group assignments must be attached to a ‘Group Assignment Cover Sheet’, which must be signed and dated by all group members before submission. All team members are expected to contribute approximately equally to a group assignment.
Lecturers can refuse to accept assignments that do not have a signed acknowledgement of the University’s policy on plagiarism.
ASSIGNMENT GUIDELINES INCLUDING REFERENCING DETAILS
A copy of the Postgraduate Programs: Communication Skills Guide will have been given to you at the beginning of your program. This guide will assist you to structure your assignments. A copy of the guide can also be downloaded from http://www.business.adelaide.edu.au/current/mba/download/2009MBACommSkillsGuide.pdf
This publication also provides guidelines on a range of other important communication skills including writing essays and management reports, making oral presentations, etc.
In preparing any written piece of assessment for your postgraduate studies it is important to draw on the relevant ‘literature’ to support critical analysis. Also essential is to reference the literature used. Correct referencing is important because it identifies the source of the ideas and arguments that you present, and sometimes the source of the actual words you use, and helps to avoid the problem of plagiarism. (Further information on plagiarism is provided later in this course outline.)
The Harvard system is widely used in the Business School. Guidelines for the use of this style of referencing can be found in the Communication Skills Guide.
Further assistance with referencing is available from the Faculty’s Learning Support Advisors. The contact details are provided on page 6 of the Communication Skills Guide.
LATE ASSIGNMENT SUBMISSION
Students are expected to submit their work by the due date to maintain a fair and equitable system. Extensions will generally only be given for medical or other serious reasons. All requests for extensions must be emailed to the lecturer in charge of the course before the due date. Each request will be assessed on its merits. A late assignment (without prior arrangement) will be penalised by a 20% mark reduction for each day that it is late. Assignments are non-redeemable.
RETURN OF ASSIGNMENTS
Lecturers aim to mark and publish the assignment score to students within two weeks of the due date with written feedback. Students are responsible for viewing their assignment scores on the "myuni" website.
Grades for your performance in this course will be awarded in accordance with the following scheme:
M10 (Coursework Mark Scheme) Grade Mark Description FNS Fail No Submission F 1-49 Fail P 50-64 Pass C 65-74 Credit D 75-84 Distinction HD 85-100 High Distinction CN Continuing NFE No Formal Examination RP Result Pending
Further details of the grades/results can be obtained from Examinations.
Grade Descriptors are available which provide a general guide to the standard of work that is expected at each grade level. More information at Assessment for Coursework Programs.
Final results for this course will be made available through Access Adelaide.
The University places a high priority on approaches to learning and teaching that enhance the student experience. Feedback is sought from students in a variety of ways including on-going engagement with staff, the use of online discussion boards and the use of Student Experience of Learning and Teaching (SELT) surveys as well as GOS surveys and Program reviews.
SELTs are an important source of information to inform individual teaching practice, decisions about teaching duties, and course and program curriculum design. They enable the University to assess how effectively its learning environments and teaching practices facilitate student engagement and learning outcomes. Under the current SELT Policy (http://www.adelaide.edu.au/policies/101/) course SELTs are mandated and must be conducted at the conclusion of each term/semester/trimester for every course offering. Feedback on issues raised through course SELT surveys is made available to enrolled students through various resources (e.g. MyUni). In addition aggregated course SELT data is available.
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- Reasonable Adjustments to Teaching & Assessment for Students with a Disability Policy
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Policies & Guidelines
This section contains links to relevant assessment-related policies and guidelines - all university policies.
- Academic Credit Arrangement Policy
- Academic Honesty Policy
- Academic Progress by Coursework Students Policy
- Assessment for Coursework Programs
- Copyright Compliance Policy
- Coursework Academic Programs Policy
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- IT Acceptable Use and Security Policy
- Modified Arrangements for Coursework Assessment
- Student Experience of Learning and Teaching Policy
- Student Grievance Resolution Process
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