GRA 4156 Accounting, Valuation and Financial Economics
GRA 4156 Accounting, Valuation and Financial Economics
The firm is an essential part of any modern business environment. In this course you will be given a solid introduction to three different, but still highly related, business areas – accounting, economics and finance – that all offer insight into how firms are valued. The course starts by introducing important concepts and terms from financial reporting, covering, e.g., income statements, balance sheets and cash flows. The course then continues with consumption and investment theory both under certainty and uncertainty. Finally, you will learn key aspects of financial markets and be given an introduction to asset pricing.
By the end of the course, the student will have a comprehensive understanding of the fundamentals of:
- Firms’ income statement, balance sheets and cashflow.
- Consumption and investment – both under certainty and uncertainty.
- Financial market efficiency.
- The importance of the risk and expected return trade-off and its implication for finance.
By the end of the course, students will know how to:
- Analyse income statements, balance sheets, and cash flows, and to reformulate the income statements and balance sheets in order to apply key valuation techniques.
- Analyse consumption and investment, both under certainty and uncertainty.
- Analyse risk and expected-return tradeoffs.
- Students will be able to reflect about the different aspects of valuation of firms.
Financial statements
- Income statements, balance sheets and cash flow
- Reformulation of income statements and balance sheets
Valuation techniques
- Discounted dividend valuation
- DCF valuation
- Relative valuation
Consumption and investment decisions
- Consumption and investment as intertemporal choices
- The interest rate and saving
- Marginal revenue product of capital and investment
- Consumption and investment under uncertainty
Financial markets and the efficient market hypothesis
- Portfolio Theory
- The capital asset pricing model (CAPM)
- Asset pricing theory (APT) and factor models
The learning activities will combine 2/3 lectures and 1/3 videos. Students are expected to prepare the lectures by reading assigned materials and watch videos before the lecture. There will be six practical sessions with a TA.
During the course there will be a group assignment related to:
- Accounting and valuation techniques
- Consumption and investment
- Financial economics
A written report is submitted as an exam.
Please note that while attendance is not compulsory in all courses, it is the student’s own responsibility to obtain any information provided in class.
All parts of the assessment must be passed in order to get a grade in the course.
Starting academic year 2023/2024, the weighting of the two exams has been changed. It is not possible to retake the old version of the exam. Please note new exam codes in the Exam section of the course description.
All courses in the Masters programme will assume that students have fulfilled the admission requirements for the programme. In addition, courses in second, third and/or fourth semester can have specific prerequisites and will assume that students have followed normal study progression. For double degree and exchange students, please note that equivalent courses are accepted.
Disclaimer
Deviations in teaching and exams may occur if external conditions or unforeseen events call for this.
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| Assessments |
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Exam category: Submission Form of assessment: Written submission Invigilation Weight: 40 Grouping: Individual Support materials:
Duration: 3 Hour(s) Exam code: GRA 41563 Grading scale: ECTS Resit: Examination when next scheduled course |
Exam category: Submission Form of assessment: Written submission Weight: 60 Grouping: Group (2 - 3) Duration: 1 Semester(s) Comment: This submission is a written report. Exam code: GRA 41564 Grading scale: ECTS Resit: Examination when next scheduled course |
All exams must be passed to get a grade in this course.
A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 6 ECTS credits corresponds to a workload of at least 160 hours.