CORPFIN 7039 - Equity Valuation & Analysis (M)

North Terrace Campus - Semester 2 - 2020

The course analyses companies from a fundamental perspective in order to derive an intrinsic value for stock. Topics: Fundamental analysis, determination of growth, discount cash flows models including dividend discount models, free cash flow models and residual income models; relative valuation models including price-earnings and price-book multiples; valuation of private companies, estimating the discount rate, mergers and acquisitions and valuation issues.

  • General Course Information
    Course Details
    Course Code CORPFIN 7039
    Course Equity Valuation & Analysis (M)
    Coordinating Unit Business School
    Term Semester 2
    Level Postgraduate Coursework
    Location/s North Terrace Campus
    Units 3
    Contact Up to 3 hours per week
    Available for Study Abroad and Exchange Y
    Prerequisites ACCTING 7019, CORPFIN 7005
    Assumed Knowledge CORPFIN 7033/COMMERCE 7033, ECON 7200
    Course Description The course analyses companies from a fundamental perspective in order to derive an intrinsic value for stock. Topics: Fundamental analysis, determination of growth, discount cash flows models including dividend discount models, free cash flow models and residual income models; relative valuation models including price-earnings and price-book multiples; valuation of private companies, estimating the discount rate, mergers and acquisitions and valuation issues.
    Course Staff

    Course Coordinator: Md Abdul Wasi

    Teaching Staff:

    Semester 1
    Name: MD Abdul Wasi
    Email: mdabdul.wasi@adelaide.edu.au

    Winter School
    Name: Arti Jhuremalani
    Email: arti.jhuremalani@adelaide.edu.au

    Semester 2
    Name: MD Abdul Wasi
    Email: mdabdul.wasi@adelaide.edu.au

    Course Timetable

    The full timetable of all activities for this course can be accessed from Course Planner.

  • Learning Outcomes
    Course Learning Outcomes
    On successful completion of this course, students will be able to:

    1. Conduct valuations based on the discounted cash flow method.
    2. Conduct a relative valuation for a company.
    3. Recognize conflicts of interest in valuation contexts
    4. Critically analyse publically available information about what is occurring in financial markets.
    5. 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)
    Deep discipline knowledge
    • informed and infused by cutting edge research, scaffolded throughout their program of studies
    • acquired from personal interaction with research active educators, from year 1
    • accredited or validated against national or international standards (for relevant programs)
    1
    Critical thinking and problem solving
    • steeped in research methods and rigor
    • based on empirical evidence and the scientific approach to knowledge development
    • demonstrated through appropriate and relevant assessment
    2,4
    Teamwork and communication skills
    • developed from, with, and via the SGDE
    • honed through assessment and practice throughout the program of studies
    • encouraged and valued in all aspects of learning
    5
    Career and leadership readiness
    • technology savvy
    • professional and, where relevant, fully accredited
    • forward thinking and well informed
    • tested and validated by work based experiences
    4
    Intercultural and ethical competency
    • adept at operating in other cultures
    • comfortable with different nationalities and social contexts
    • Able to determine and contribute to desirable social outcomes
    • demonstrated by study abroad or with an understanding of indigenous knowledges
    5
    Self-awareness and emotional intelligence
    • a capacity for self-reflection and a willingness to engage in self-appraisal
    • open to objective and constructive feedback from supervisors and peers
    • able to negotiate difficult social situations, defuse conflict and engage positively in purposeful debate
    1-5
  • Learning Resources
    Required Resources
    Lecture 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 Books (s) not compulsory, either


    A. Damodaran, 2006, "Damodaran on Valuation," 2nd 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 Resources
    T. Koller et al., "Valuation: Measuring and Managing the Value of Companies, McKinsey and Company, 6th Edition, 2015. (available online in the library)

    JASSA (The Finsia Journal of Applied Finance) Australian professional/ academic publication

    Financial Analysts Journal. US professional/ academic publication

    Palepu. K. G. et al., "Business Analysis and Valuation", IFRS edition, Thomson, 2007.
  • Learning & Teaching Activities
    Learning & Teaching Modes
    Students are required to attend lectures or access to lecture recordings and attend tutorials.
    Workload

    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 to their studies. This means that you are expected to commit approximately 9 hours for a three-unit course or 13 hours for a four-unit course, of private study outside of your regular classes. Students in this course are expected to attend all lectures (2 hour) throughout the semester plus one tutorial class (1 hour) each week.
    Learning Activities Summary
    Week Number Topic Number Topic Study Study Guide Guide Tutorial
    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 - i) Mid-semester test: More details will be provided early in the semester. ii) Free cash flow models (continued) - 5
    7 4,5 Free cash flow models (continued) &
    Fundamental analysis and forecasting
    Chp 3, 4 5 (continued)
    8 5 Fundamental analysis and forecasting (continued) Chp 4 6
    Mid-semester Break
    Mid-semester Break
    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 9 10
  • Assessment

    The University's policy on Assessment for Coursework Programs is based on the following four principles:

    1. Assessment must encourage and reinforce learning.
    2. Assessment must enable robust and fair judgements about student performance.
    3. Assessment practices must be fair and equitable to students and give them the opportunity to demonstrate what they have learned.
    4. Assessment must maintain academic standards.

    Assessment Summary
    Assessment Task Task Type Due Weighting Learning Outcome
    Mid Semester Test Individual Week 6 15% 1,2,3,4
    Assignment Group Week 11 20% 1,2,3,4,5
    Final Exam Individual TBA 65% 1,2,3,4
    Total 100%
    For specific due dates please see MyUni.

    Assessment Related Requirements
    Notes on Assessment
    1. To gain a pass for this course, a mark of at least 45% must be obtained on the examination as well as a total of at least 50% overall. Students not achieving the minimum exam mark will be awarded no more than 49.
    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 because of 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.
    4. Students in this course are permitted to take a DICTIONARY (English) into the examination and calculator. A formula sheet will be provided in the exam (see attached).
    Assessment Detail
    Information related to assignment will be provided on 'MyUni'.

    Test: 15 %
    Details: Further information regading the test will be provided during the semester.

    Assignment: 20%
    Details: The assignment is compulsory and will be made available on the 'myuni' website. The assignment is non-redeemable.

    Final Exam: 65%
    The final exam will be of 3 hours duration. A formula sheet will also be provided with the exam paper. A copy will be provided on 'myuni'.

    Submission
    SUBMISSION
    Assignments
    Assignments are compulsory and will be posted on the ‘myuni’ website.
    A word and excel document are to be submitted electronically.
     

    PRESENTATION OF ASSIGNMENTS
    • Students must retain a copy of all assignments submitted.
    • A ‘Group Assignment Cover Sheet’, which must be signed and dated by all group members should be attached to the submitted word document. All team members are expected to contribute approximately equally to a group assignment.


    Lecturers can refuse to accept assignments, which 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 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
    Lecturer’s aim to mark and return assignments to students within three (3) weeks of the due date with written feedback.
    Course Grading

    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.

  • Student Feedback

    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.

  • Student Support
  • Policies & Guidelines
  • Fraud Awareness

    Students are reminded that in order to maintain the academic integrity of all programs and courses, the university has a zero-tolerance approach to students offering money or significant value goods or services to any staff member who is involved in their teaching or assessment. Students offering lecturers or tutors or professional staff anything more than a small token of appreciation is totally unacceptable, in any circumstances. Staff members are obliged to report all such incidents to their supervisor/manager, who will refer them for action under the university's student’s disciplinary procedures.

The University of Adelaide is committed to regular reviews of the courses and programs it offers to students. The University of Adelaide therefore reserves the right to discontinue or vary programs and courses without notice. Please read the important information contained in the disclaimer.