CORPFIN 2502 - Business Valuation II

North Terrace Campus - Semester 1 - 2017

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 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
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.

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

6. 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)	1-6
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	6
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	6
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	1-6

Learning Resources

Required Resources

(very useful) Textbook: Damodaran on Valuation, 2nd edition, 2006, John Wiley & Sons
Study Guide: Study Guide for Damodaran on Valuation, 1st edition, 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 (Mar 1)

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

Lecture/Week 2 Topics (Mar 8)

Estimating Discount Rates

Measuring Cash Flows

Lecture/Week 3 Topics (Mar 15)

Forecasting Cash Flows

Lecture/Week 4 Topics (Mar 22)

Equity Valuation Models

Lecture/Week 5 Topics (Mar 29)

Firm Valuation Models

Lecture/Week 6 Topics (Apr 5)

Mid-Term Examination (2pm-3pm in Bonython Hall)
Relative Valuation: First Principles (3pm-4pm)

Lecture/Week 7 Topics (Apr 26)

Relative Valuation: Equity Multiples

Lecture/Weel 8 Topics (May 3)

Relative Valuation: Value Multiples
Introduction to Options

Lecture/Weel 9 Topics (May 10)

Options Strategies and Payoffs
Binomial Option Pricing

Lecture/Week 10 Topics (May 17)

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

Lecture/Week 11 Topics (May 24) (Group Project Due by 4:30pm)

Introduction to Fixed Income Securities
Spot/Forward Interest Rates

Lecture/Week 12 Topics (May 31)

Bond Valuation Using No Arbitrage Pricing
Term Structure Theories

Lecture/Week 13 (if needed) (June 7)

Final exam review

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 comprehensive 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 Task	Weighting	Learning Outcome
Midterm Examination	30%
Group Business Valuation Project Report	30%
Final Examination	40%
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.

Consultation times are on Wednesday between 1pm and 2pm in the office of the lecturer in charge (12.31) in 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 Wednesday, April 5, 2017 during the first half of the lecture block – from 2pm until 3pm in Bonython Hall. 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.

Course Learing Outcome: 1

Date and time: 2pm-3pm, Wednesday, April 5, 2017

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 ideally no longer 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. You can either submit a soft-copy of your report via email directly to the lecturer in charge or use the assignment drop-box on the ground floor of the Nexus 10 building id you prefer to submit a hard-copy.

Course Learing Outcome: All

Due Date: 4.30 pm on Wednesday, May 24, 2017

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.

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
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