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 necessary knowledge about financial statement analysis and valuation in order to write a credible valuation report based on accounting numbers. This includes profitability, growth, and liquidity analyses, reformulation of annual reports, different valuation methods, and tools to estimate the risk of businesses.
By the end of the course, students should be able 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.
- understand and interpret cash-flows, dividends, earnings, and book values and be able to use them for valuation purposes.
- infer the market expectations about growth implicit in the stock prices.
- perform a ratio analysis and understand the factors influencing the different ratios.
- evaluate equity and debt risk.
By the end of the course, students should be able to critically evaluate the information available in the annual reports of corporations. Students should also be able to critically assess the quality of the accounting information contained in the annual reports, and understand the implications of poor accounting quality in financial statement analysis and valuation.
- Introduction to investing and valuation
- Accounting quality analysis
- Reformulation of financial statements
- Valuation using multiples
- Residual income valuation models
- Analysis of risk and return
- Forecasting analysis
- Writing an equity reserach report
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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.
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.
Covid-19
Due to the Covid-19 pandemic, there may be deviations in teaching and learning activities as well as exams, compared with what is described in this course description.
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: GRA 62201 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: Written examination under supervision. Exam code: GRA 62202 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.