GRA 6220 Corporate Valuation
GRA 6220 Corporate Valuation
The main objective of this course is to provide students with the tools to carry out a business valuation using residual income valuation techniques.
We study the actual financial statements of publicly-traded companies in the assignments that we discuss in class. The course combines accounting principles and investment principles to answer the question: How do I account for value so that I can challenge stock prices with some confidence?
The student will through the course acquire the competence to apply business valuation models that use accounting numbers and to write a thorough, credible valuation report that meets the highest standards.
The students will learn how to prepare a thorough valuation analysis including sensitivity analysis on the key assumptions; understand the factors determining quality of accounting information from an investor perspective and demonstrate written communication skills in relation to the analysis of company financial statement information from a valuation perspective.
By the end of the course students should be able to answer to the following questions:
- How are fundamental values (or intrinsic values) estimated?
- How does one pull apart the financial statements to get at the relevant information for valuing equities?
- What is the relevance of cash-flows? Of dividends? Of earnings? Of book values? How are these measures treated in a valuation
- What is growth? How does one analyze growth? How does one value a growth firm? What are the pitfalls in buying growth?
- How does one challenge the growth expectations implicit in stock prices?
- How does ratio analysis help in valuation? What determines a firm's P/E ratio? How does one calculate what the P/E should be? What determines a firm's market-to-book (P/B) ratio? How does one calculate what the P/B should be?
- How does profitability tie into valuation?
- How does one evaluate risk? For equity? For debt?
- Introduction to investing and valuation
- Accounting quality analysis
- Recastng financial statements
- Valuation using multiples
- Residual income valuation models
- Analysis of risk and return
- Forecasting analysis
- Writing an equity reserach report
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 that is not included on itslearning or text book.
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.
GRA 6225 Financial Statement Analysis or similar.
| Assessments |
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Exam category: Submission Form of assessment: Written submission Weight: 30 Grouping: Group (1 - 3) Duration: 1 Week(s) Comment: Assignment (mid-term paper) Exam code: GRA62201 Grading scale: ECTS Resit: Examination when next scheduled course |
Exam category: Submission Form of assessment: Written submission Invigilation Weight: 70 Grouping: Individual Support materials:
Duration: 3 Hour(s) Comment: Final written examination with supervision Exam code: GRA62202 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.