Valuation

FIE437 Valuation

  • Topics

    Topics

    Each topic will be covered by means of a lecture, followed by a computer tutorial that covers practical implementation of the area introduced in the lecture. The structure of the lectures and tutorials is as follows:

     

    SESSION NO.

    LECTURE

    TUTORIAL

    1

    Introduction to valuation

    Introduction to valuation

    2

    The cost of capital

    Valuation and the cost of capital

    3

    Relative valuation and multiples

    Relative valuation: Case

    4

    APV and other valuation approaches

    Valuation approaches: Case

    5

    Financial statements & valuation I

    Financial statements spreadsheet case

    6

    Financial statements & valuation II

    Financial statements spreadsheet case

    7

    Valuation under special circumstances

    Valuation case: special circumstances

    8

    Special topics in valuation

    Casework on special topics

  • Learning outcome

    Learning outcome

    Valuation is a semi-intensive course that equips students with the knowledge and tools necessary to value any company. The course has an applied focus, and will draw on a diverse range of techniques from finance and valuation theory, financial reporting and investment analysis. In keeping with the applied nature of the course, each lecture is followed by an in-depth practical class, drawing on real-life data and examples.

     

    After completing the course, students will:

     

    have an advanced knowledge of valuation techniques as they apply to companies and projects.

    be able to apply the main valuation techniques to real companies, to form an informed opinion as to the fair value of a company.

    be able to adapt valuation techniques to apply them to specialized valuation situations, for example in valuing a start-up company or a company that is not yet profitable.

    be able to take complex financial information and distil from this the information important for valuation.

    be able to present financial analyses of companies or projects, and competently discuss issues relating to the fair value or future prospects of those companies or projects.

    have competence in using spreadsheets in analysing realistic real-world valuation problems.

  • Teaching

    Teaching

    The course is taught and examined in English. Please note that it is not possible to write your examination in Norwegian for this course. Teaching is by means of a two-hour lecture followed by a two-hour practical computer class (typically on the same day, and usually with a break in between the lecture and computer class, if timetabling permits).

    Course handouts will be made available on It's Learning prior to each class. Please bring all handouts with you to each class. The handouts will include a set of the lecture notes. Please also don't forget to bring your laptop computer with you to class - especially for the computing classes!!!

  • Required prerequisites

    Required prerequisites

    Students should have taken a first course in Corporate Finance or Financial Management, such as FIE435 Applied Finance or FIE402 Corporate Finance, or an equivalent course covering the fundamentals of finance.The course is equal to FIE437A and students will not get credit for both courses.

  • Requirements for course approval

    Requirements for course approval

    For course approval, students are required to attend lectures and tutorials, and each student must hand in a write-up of ONE of the first four practical classes.

    The write-up should be a written report based on working through the exercises set in one of the first four practical classes, written in English. You may choose which practical class you write up, but it should be one of the first four practical classes. The report should be no more than five pages of A4 (excluding financial appendices), explaining what you did in the practical work, any limitations of your work and further extensions that could be applied; it should be concise and clear. Given the practical nature of the work, the report should include some illustrative financial workings (which should be relegated to an appendix and do not form part of the five-page limit). There is no set format for the report: the over-riding criterion is that it should demonstrate your competence in the chosen topic. It is permissible to submit a group report, with a group of up to six students.

    The course approval report should be submitted by e-mail attachment to the course leader, Dr. Brian Wright, and should be submitted within one week of your attendance of the related computing tutorial.

    The report should be submitted in Microsoft Word format, in English, and should bear a title page which contains your name and student number. It is the student's responsibility to retain a copy of the report, in case it is not received or goes astray. Your e-mailed file(s) should not exceed 10Mb.

  • Assessment

    Assessment

    This course will be assessed by means of an individual project (home examination) at the end of the course, which is examined in English (PLEASE NOTE: it is not possible to write the home exam in Norwegian for this course). The home examination requirements will be handed out during the course, and your solutions must be submitted by the submission deadline. The project will be graded on the A-F scale.

  • Grading Scale

    Grading Scale

    A - F.

  • Computer tools

    Computer tools

    The course will make extensive use of Excel and its various tools. Students should have at least a basic understanding of Excel, but do not need to be especially familiar with financial functions in Excel. Due to the practical nature of this course, you will need to have a laptop computer for this course, and will need to bring your laptop computer with you for all of the classes, especially for the computing tutorials (which occur after each lecture: the first class each day will be a lecture, and the second class will be a computing tutorial). You should ensure that your laptop is set up to connect to the internet by wireless connection, and that you have Microsoft Office (including Excel 2003 or a later version).

  • Semester

    Semester

    Autumn. Tilbys ikke våren 2018

  • Literature

    Literature

    Recommended reading

    The recommended text for this course is Investment Valuation by Aswath Damodaran, 3rd Edition (2012), John Wiley and sons. The Second University Edition (2002) would also be useable for this course, if you already have it. This text covers the main ideas of valuation. Additional readings will be set during the course, relating to particular aspects of the course syllabus. Any other good book on valuation would also be useful for the course. So if you prefer, for example, the book entitled 'Valuation: Measuring and Managing the Value of Companies' by McKinsey & Company, that would also be useable.

Overview

ECTS Credits
7.5
Teaching language
English. The final take-home examination will be conducted in English only.
Semester
Autumn

Course responsible

Einar Bakke, Department of Finance