CORPFIN 4039 - Equity Valuation & Analysis (H)

North Terrace Campus - Semester 1 - 2022

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 4039
    Course Equity Valuation & Analysis (H)
    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
    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: Dr Jane Luo

    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. 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.

    1

    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.

    2,4

    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.

    5

    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.

    4

    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.

    5

    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.

    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 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 Resources
    Pinto, 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 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
    Topics Study Guide Tute Number
    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. - -
    Mid-semester Break
    Mid-semester Break 
    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

     
  • 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 Due Weighting Learning Outcome
    Mid-semester Test Week 6 15% 1
    Assignment Week 12 25% 5
    Final Exam Exam period 60% 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 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.
    Assessment Detail

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

    Assignment: 25%
    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.
    Submission
    SUBMISSION
    Assignments
    Assignments are compulsory and will be posted on the ‘MyUni’ website.
    The assignment must be submitted electronically. 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, 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
    Lecturers aim to mark and publish the assignment score to students within three (3) weeks of the due date with written feedback. Students are responsible for viewing their assignment score on the "myuni" website.
    Course Grading

    Grades for your performance in this course will be awarded in accordance with the following scheme:

    M11 (Honours Mark Scheme)
    GradeGrade reflects following criteria for allocation of gradeReported on Official Transcript
    Fail A mark between 1-49 F
    Third Class A mark between 50-59 3
    Second Class Div B A mark between 60-69 2B
    Second Class Div A A mark between 70-79 2A
    First Class A mark between 80-100 1
    Result Pending An interim result RP
    Continuing Continuing CN

    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.

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