GRA 4156 Accounting, Valuation and Financial Economics

GRA 4156 Accounting, Valuation and Financial Economics

Course code: 
GRA 4156
Department: 
Finance
Credits: 
6
Course coordinator: 
Ljubica Georgievska
Course name in Norwegian: 
Accounting, Valuation and Financial Economics
Product category: 
Master
Portfolio: 
MSc in Data Science for Business
Semester: 
2023 Autumn
Active status: 
Active
Level of study: 
Master
Teaching language: 
English
Course type: 
One semester
Introduction

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.

Learning outcomes - Knowledge

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.
Learning outcomes - Skills

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.
General Competence
  • Students will be able to reflect about the different aspects of valuation of firms.
Course content

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
Teaching and learning activities

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.

Software tools
No specified computer-based tools are required.
Additional information

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. 

Qualifications

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.

Required prerequisite knowledge

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Exam categoryWeightInvigilationDurationSupport materialsGroupingComment exam
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
GRA 41563
Grading scale:
ECTS
Grading rules:
Internal examiner
Resit:
Examination when next scheduled course
40Yes3 Hour(s)
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
Individual
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
GRA 41564
Grading scale:
ECTS
Grading rules:
Internal examiner
Resit:
Examination when next scheduled course
60No1 Semester(s)Group (2 - 3)This submission is a written report.
Exams:
Exam category:Submission
Form of assessment:Written submission
Weight:40
Invigilation:Yes
Grouping (size):Individual
Support materials:
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
Duration:3 Hour(s)
Comment:
Exam code:GRA 41563
Grading scale:ECTS
Resit:Examination when next scheduled course
Exam category:Submission
Form of assessment:Written submission
Weight:60
Invigilation:No
Grouping (size):Group (2-3)
Support materials:
Duration:1 Semester(s)
Comment:This submission is a written report.
Exam code:GRA 41564
Grading scale:ECTS
Resit:Examination when next scheduled course
Type of Assessment: 
Ordinary examination
All exams must be passed to get a grade in this course.
Total weight: 
100
Sum workload: 
0

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.