CORPFIN 2502 - Business Valuation II

North Terrace Campus - Semester 2 - 2015

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.

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Course Details

Course Code	CORPFIN 2502
Course	Business Valuation II
Coordinating Unit	Adelaide Business School
Term	Semester 2
Level	Undergraduate
Location/s	North Terrace Campus
Units	3
Contact	Up to 3 hours per week
Available for Study Abroad and Exchange	Y
Corequisites	CORPFIN 2500
Assessment	Exam/assignments/tests/tutorial work as prescribed at first lecture

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.

Week Lecture Date Topic

1 1 Jul 31 Syllabus/Introduction to Valuation, DCF, Relative Valuation, Contingent Claim Valuation

2 2 Aug 7 Estimating Discount Rates, Measuring Cash Flows

3 3 Aug 14 Forecasting Cash Flows

4 4 Aug 21 Equity Valuation Models

5 5 Aug 28 Firm Valuation Models

6 6 Sep 4 Mid-Term Examination (2pm-3pm) Relative Valuation: First Principles (3pm-4pm)

7 7 Sep 11 Relative Valuation: Equity Multiples

8 8 Sep 18 Relative Valuation: Value Multiples Introduction to Options

9 9 Oct 9 Options Strategies and Payoffs Binomial Option Pricing

10 10 Oct 16 Valuing Equity/Debt in the Option Pricing Framework Real Option Valuation

11 11 Oct 23 Introduction to Fixed Income Securities Spot/Forward Interest Rates

12 12 Oct 30 Bond Valuation Using No Arbitrage Pricing Term Structure Theories

Course Learning Outcomes

The aim of this course is to present the various state-of-the-art valuation models in use in modern financial practice as well as the development of a solid basis for understanding financial valuation theory. The continuing development of good interpersonal and communication skills is widely recognized as important for finance professionals, and in this context this subject specifically seeks to develop students’ abilities to participate in group discussion, to work in groups and write a good 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)
Knowledge and understanding of the content and techniques of a chosen discipline at advanced levels that are internationally recognised.	Explain core business valuation concepts and their application
The ability to locate, analyse, evaluate and synthesise information from a wide variety of sources in a planned and timely manner.	Identify, source, evaluate and interpret appropriate data
An ability to apply effective, creative and innovative solutions, both independently and cooperatively, to current and future problems.	Apply valuation concepts to the solution of practical valuation problems
Skills of a high order in interpersonal understanding, teamwork and communication.	Work with peers in financial analysis and valuation projects
A proficiency in the appropriate use of contemporary technologies.	Critically analyse media and public reports about what is occurring in financial markets
A commitment to continuous learning and the capacity to maintain intellectual curiosity throughout life.	Adapt key valuation concepts and ideas to new and unfamiliar valuation problems
A commitment to the highest standards of professional endeavour and the ability to take a leadership role in the community.	Apply the concept of prudence in valuation
An awareness of ethical, social and cultural issues within a global context and their importance in the exercise of professional skills and responsibilities.	Recognize conflicts of interest in valuation contexts

Learning Resources

Required Resources

Textbook: Damodaran on Valuation, 2nd edition, 2006, John Wiley & Sons
Study Guide: Study Guide for Damodaran on Valuation, 1st edition, John Wiley & Sons.
Both items available as a value pack from UniBooks.

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

No information currently available.

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

No information currently available.

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 Summary

Assessment in this class will consist of a single midterm examination worth 30% of the final grade, an up to twenty page group business valuation project report worth 30% of the final grade, and a final examination worth 40% of the final grade. None of the assignments and exams are redeemable. If a student misses the midterm test due a valid and documented reason (eg, medical report) then the final exam will count towards the combined weight of the midterm test and the final exam. In the absence of a documented reason for missing an exam or an assignment a mark of zero will be assigned to the respective exam/assignment.

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.

Consultation times are after the lecture on Fridays between 1pm and 2pm in the office of the lecturer in charge at the Nexus 10 building.

Assessment Detail

The assessment components are as follows:

Class Test (Week 6) 30%

A 1 hour class test will be held in Week 6 on Friday, September 4, 2015 during the first half of the lecture block – from 2pm until 3pm. It will cover Discounted Cash Flow (DCF) Valuation up until Firm Valuation models. 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.

Date and time: 2pm-3pm, Friday, September 4, 2015

Group Valuation Project (Due in Week 11) 30%

Each group should have at most six students whose names should appear on the cover page of the report. The report itself should be no more than 20 pages long excluding any appendices, tables and graphs you may want to attach. A penalty of 1.5% (out of 30%) will be applied for every day late the project is turned in.

Due Date: 4.30 pm on Friday, October 23, 2015

Final Exam 40%

There will be a 3 hour exam covering topics subsequent to the midterm test. 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.

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.

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
This section contains links to relevant assessment-related policies and guidelines - all university policies.
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.

Authorised by:	Deputy Vice-Chancellor and Vice-President (Academic)
Maintained by:	Course Outlines Administrator