CORPFIN 2502 - Business Valuation

North Terrace Campus - Semester 1 - 2019

This course will provide the framework to price and value both securitised and non-securitised entities (whether that be specific assets or whole companies). This involves the utilisation of both accounting and financial analysis of the entity to determine value. The course will approach the subject from an applied viewpoint to enable participants to practise valuation methods. The course will also incorporate basic capital raising issues, from both the fixed income and equity perspectives.

  • General Course Information
    Course Details
    Course Code CORPFIN 2502
    Course Business Valuation
    Coordinating Unit Business School
    Term Semester 1
    Level Undergraduate
    Location/s North Terrace Campus
    Units 3
    Contact Up to 3 hours per week
    Available for Study Abroad and Exchange Y
    Prerequisites CORPFIN 1002
    Course Description This course will provide the framework to price and value both securitised and non-securitised entities (whether that be specific assets or whole companies). This involves the utilisation of both accounting and financial analysis of the entity to determine value. The course will approach the subject from an applied viewpoint to enable participants to practise valuation methods. The course will also incorporate basic capital raising issues, from both the fixed income and equity perspectives.
    Course Staff

    Course Coordinator: Dr Paskalis Glabadanidis

    Name: Paskalis Glabadanidis
    Location: Room 12.31, 10 Pulteney Street
    Telephone: 8313 7283
    email: paskalis.glabadanidis@adelaide.edu.au
    Course Website: www.myuni.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. Demonstrate a basic understanding of the fixed income securities market
    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)
    1-5
    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
    1,2,5
    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
    3
    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
    3
    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
    (very useful) Textbook: Damodaran on Valuation, 2nd edition, 2006, John Wiley & Sons

    (optional) Glabadanidis, Absence of Arbitrage Valuation: A Unified Framework for Pricing Assets and Securities, 2014, 1st ed., Palgrave Macmillan US. Also available from UniBooks.
    Online Learning
    Course Lecture notes as well as additional materials (data spreadsheets, etc.) will be made available on MyUni.
  • Learning & Teaching Activities
    Learning & Teaching Modes
    Student learning in this course consists of following lectures supported by problem-solving tutorials developing material covered in lectures.
    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 throughout the semester plus one tutorial class each week.
    Learning Activities Summary

    Lecture/Week 1 Topics

    Syllabus/Introduction to Valuation, DCF, Relative Valuation, Contingent Claim Valuation


    Lecture/Week 2 Topics

    Estimating Discount Rates, Measuring Cash Flows



    Lecture/Week 3 Topics

    Forecasting Cash Flows

     
    Lecture/Week 4 Topics

    Equity Valuation Models


    Lecture/Week 5 Topics


    Firm Valuation Models
     

    Lecture/Week 6 Topics

    Mid-Term Test (April 10: 1pm-2pm; Location: TBA) 
    Relative Valuation: First Principles (2pm-3pm)


    Lecture/Week 7 Topics

    Relative Valuation: Equity Multiples


    Lecture/Weel 8 Topics

    Relative Valuation: Value Multiples, Introduction to Options


    Lecture/Weel 9 Topics


    Options Strategies and Payoffs, Binomial Option Pricing


    Lecture/Week 10 Topics

    Valuing Equity/Debt in the Option Pricing Framework, Real Option Valuation


    Lecture/Week 11 Topics

    Introduction to Fixed Income Securities, Spot/Forward Interest Rates

     
    Lecture/Week 12 Topics

    Bond Valuation Using No Arbitrage Pricing, Term Structure Theories


    Lecture/Week 13 (if needed)

    Final exam overview

  • 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 in this class will consist of one mid-term test worth 30% of the final grade and a final exam worth 70% of the final grade. Neither the test nor the exam are redeemable. If a student misses the mid-term test due a valid and documented reason (eg, medical report) then the student needs to submit their own solution to all question in first tutorial set (discussed in week 2). In the absence of a documented reason for missing an exam or the mid-term test a mark of zero will be assigned to the respective exam/test.

    Assessment Task Weighting Learning Outcome
    Mid-Term Test 30% 1-5
    Exam 70% 1-5
    Total 100%
    Assessment Related Requirements
    While we are not going to keep attendance during tutorials it is highly advisable that you attend as many as you can. The more material you master during class/tutorial time, the less time you will have to spend studying on your own. Therefore, it is in your best interest to attend all lectures and tutorials for the class. You shouldn't plan on cramming weeks of topics the night before a test or the night before the final exam. It is simply not possible and will most likely backfire.

    Consultation times are on Wednesday between 3pm and 4pm in the office of the lecturer in charge (12.31) in the Nexus 10 building.
    Assessment Detail
    The assessment components are as follows:

    Mid-Term Test (Week 6) 30%

    A 1 hour class test will be held in Week 6 on Wednesday, April 10, 2019 during the first half of the lecture block – location to be annouced. It will cover Discounted Cash Flow (DCF) Valuation up until 2-stage Equity DCF Valuation models (topics 1 through 5 inclusive). The test will be closed book but you can bring in a two-sided A4 cheat sheet with your own notes, formulas, etc., hand-written or typed.

    Course Learing Outcome: 1

    Date and time: 1pm-2pm, Wednesday, April 10, 2019



    Final Exam 70%


    There will be a 3 hour exam covering topics subsequent to the first test (topics 6 through 11 inclusive). You will NOT be allowed to bring in a cheat sheet to the final exam. A formula sheet will be supplied by the lecturer in charge.

    Course Learing Outcome:
    All
    Submission
    Please submit your completed group project in the appropriate Business Valuation II drop-box on the ground level of the Nexus 10 building by the specified deadline for full credit.

    Presentation of Assignments
    · Students must retain a copy of all assignments submitted.
    · Please attach an ‘Assignment Cover Sheet’, which is signed and dated by you before submission.
    · The group business valuation report 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, which do not have a signed acknowledgement of the University’s policy on plagiarism.

    Assignment Guidelines including Referencing Details

    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 1.5% mark reduction for each day that it is late.

    Return of Assignments

    Lecturer’s aim to mark and return assignments to students within three (3) weeks of the due date with written feedback. Students are responsible for collecting their marked assignments from either their tutorials or lectures. If assignments aren’t collected after two (2) weeks, the assignments will be available at the Student Hub for two (2) weeks. The remaining assignments will only be posted out to the students, if the correct mailing addresses are on the assignments.
    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.