CORPFIN 7039NA - Equity Valuation & Analysis (M)

Ngee Ann Academy - Trimester 2 - 2014

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, start up companies, companies with negative earnings and mergers and acquisitions.

  • General Course Information
    Course Details
    Course Code CORPFIN 7039NA
    Course Equity Valuation & Analysis (M)
    Coordinating Unit Adelaide Business School
    Term Trimester 2
    Level Postgraduate Coursework
    Location/s Ngee Ann Academy
    Units 3
    Prerequisites COMMERCE 7033NA, ACCTING 7019NA & CORPFIN 7005NA
    Corequisites ECON 7200NA
    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, start up companies, companies with negative earnings and mergers and acquisitions.
    Course Staff

    Course Coordinator: Mr Graeme Gould

    Course Timetable

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

    The delivery of the subject is arranged into two intensive sessions.

    The first five topics (Topics 1 – 4) will be covered in the first Intensive Lecture Session

    The last four topics (Topics 5 – 8) will be covered in the second Intensive Lecture Session. The dates of the Intensive Lecture Sessions are:

    Session 1: July 25 - 27

    Session 2: Aug 15 - 17

    The times for each Intensive Lecture Session will be as follows:

    Friday: 7 pm – 10 pm

    Saturday: 1 pm – 8 pm

    Sunday: 9 am – 4 pm

    Each session will involve:

    · a presentation of issues involved

    · discussion relating to suggested activities

    · analysis of problems examples

    · discussion of appropriate case studies

    · spreadsheet examples
  • Learning Outcomes
    Course Learning Outcomes
    By the end of this course students should be able to:
    1. Understand and execute various valuation models
    2. Analyse financial statements and extract relevant information
    3. Recognise and appreciate limitation as well as benefits of valuation models
    4. Appreciate the level of subjectivity involved
    5. Acquire good research skills
    6. Demonstrate good interpersonal communication skills
    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)
    Knowledge and understanding of the content and techniques of a chosen discipline at advanced levels that are internationally recognised. 1
    The ability to locate, analyse, evaluate and synthesise information from a wide variety of sources in a planned and timely manner. 2, 3 & 5
    An ability to apply effective, creative and innovative solutions, both independently and cooperatively, to current and future problems. 4
    Skills of a high order in interpersonal understanding, teamwork and communication. 4, 5 & 6
    A proficiency in the appropriate use of contemporary technologies. 5
    A commitment to continuous learning and the capacity to maintain intellectual curiosity throughout life. 1,2,3,4,5
    A commitment to the highest standards of professional endeavour and the ability to take a leadership role in the community. 1,2,3,4,5
    An awareness of ethical, social and cultural issues within a global context and their importance in the exercise of professional skills and responsibilities. 1,2,3,4,5
  • Learning Resources
    Required Resources
    Text Books (s)

    Pinto, Henry, Robinson and Stowe, Equity Asset Valuation, 2nd Edition, John Wiley & Sons, 2010.

    References

    Damordaran, Aswath ‘Investment Valuation: Tools and techniques for determining the value of any asset’ 2nd edition, 2002, John Wiley & Sons.

    Benninga, Simon Z and O.H Sarig, Corporate Finance: A Valuation Approach, International Edition, 1997, McGraw-Hill.

    Lonergan, W., 2000, The Valuation of Business, Shares and Other Equity, 3rd Edition.

    Lundholm, R. and R.Sloan. 2007. Equity Valuation and Analysis. 2nd Edition.

    Reilly, Frank K. and K.C. Brown, Investment Analysis and Portfolio Management, 7th Edition, 2002.

    Additional references

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

    Financial Analysts Journal. US professional/ academic publication

    Arzac, E.R., Valuation for Mergers, Buyouts, and Restructuring, 2005, John Wiley & Sons.

    Copeland, T., T.Koller and J.Murrin, Valuation: Measuring and Managing the Value of Companies, 3rd Edition, 2000.

    Readings

    Study guide, lecture notes & Additional readings

    Please read study guide and lecture notes in advance of lectures
  • Learning & Teaching Activities
    Learning & Teaching Modes
    'An introduction to valuation
    Text Study Guide
    Topic 1      An introduction to valuation & finanial maths Chp 1 Chp 1
    Topic 2 Understanding financial reports Chp 2
    Topic 3 Discounted cash flow models Chp 3 & 4      Chp 3
    Topic 4 Fundamental analysis Chp 4
    Topic 5 Estimating the discount rae Chp 2 Chp 5
    Topic 6 Market based valuations Chp 6 Chp 6
    Topic 7 Takeovers Chp 7 Chp 7
    Topic 8 Financial distress, cross shareholding and private firms     Chp 8
    Closing thoughts
    Workload

    No information currently available.

    Learning Activities Summary

    No information currently available.

  • 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
    Test 20%
    Assignment 20%
    Exam 60%

    To pass EVA, students must obtain a grade of at least 40% in the final exam
    Assessment Related Requirements
    Notes on Assessment

    1. To gain a pass for this course, a mark of at least 40% 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.

    Assessment Detail

    1. Test: the test is compulsory and will take place during the second intensive, Saturday Aug 16th. The test will be of short answer type, be of 1 hour duration and will examine the first 4 topics.

    2. Assignments: The assignment will be handed out during the first intensive and will require the compilation of pro- forma financial statements, free cash flows and estimates of present value. (Topics 1- 4). The assignment due date is Friday August 29th and should be handed in to the college by close of business day. The assignment is non-redeemable.

    Each assignment can be done in a group of no more than 3 students. It is expected that each student contribute equally to the assignment otherwise marks will be deducted. Assignments should be handed into the College in the first instance. They should be in Word format for text and Excel for spreadsheets

    3. Exam: A final exam will cover all topics and will be open book. The final exam will be of 2.5 hours duration and consist of multiple choice questions and short answer type questions.

    To pass EVA, students must obtain a grade of at least 40% in the final exam.

    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.
    Assessment Detail

    No information currently available.

    Submission

    No information currently available.

    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.