FIE437 Valuation

Spring 2019

Autumn 2019
  • Topics

    The main course topics are:

    • Fundamentals of Value Creation
    • Relative Valuation - the Link to Fundamental Value
    • Corporate Portfolio Strategy
    • Reorganizing Financial Statements
    • Analyzing Historical Performance
    • Forecasting Future Performance
    • Estimating Continuing Value
    • Calculating and Interpreting Results
    • Sensitivity and Scenario Analysis
    • Cost of Capital
      • Cost of Equity
      • Cost of Debt
    • Debt & Taxes
    • Minorities & Debt Equivalents
    • Getting to Price Per Share

  • Learning outcome

    The course covers advanced valuation techniques used for thorough modeling of a firm's value. The aim is to provide students with advanced knowledge and in-depth understanding of the concepts behind fundamental value, and the underlying assumptions in order to sensibly apply their existing theoretical understanding of valuation. The course will be relevant for students seeking a career in equity research, investment banking, management consulting, and larger corporations in Norway and internationally.

    Upon completion of the course, the candidate shall:


    • have obtained an advanced understanding of fundamental drivers of value
    • be able to understand the integration of analysis and forecasting 
    • have achieved an advanced understanding of valuation techniques.


    • be able to apply the main valuation techniques to real companies, to form an informed opinion as to the fair value of a company.
    • have implemented and understood the use of this knowledge in practical settings.
    • have increased competence in presenting and discussing complex corporate valuation issues in a challenging context.
    • be able to take complex financial information and distill from this the information important for valuation.

    General Competencies:

    • have confidence in conducting clear, written analyzes and presentation of fair value of a corporation or project towards investors, top management and board of directors.
    • understand the need for a substantial effort and high precision needed to excel in the demanding roles of equity research analysts, management consultants or investment bankers.

  • Teaching

    Students will work in groups of three. The only exception would be if the number of students is not divisible by 3, which would result in one or two groups consisting of two students.

    This course is an advanced and applied corporate valuation course. In order to achieve maximum learning potential, the course is entirely case based, which means extensive casework on the part of the students.

    One or more industries will be selected, depending on the number of students/groups. The number of industries will be restricted to a minimum of 4 or more groups working in the same industry, to enable comparable analysis within industry, and to induce interest for in-class discussions of their casework. An industry covered the previous year is not accessible the following year (exceptions may apply).

    Each student group will work on one listed company throughout the course, and will share their model(s) with other groups also covering that industry towards the end of the course in order to create an opportunity to conduct comparable analysis between case firms within industries. A firm covered the previous year by a student group is not accessible the following year (exceptions may apply).

    All teaching will be conducted intensively, and followed up by an (online) multiple choice tests of the material covered in the lectures. The requirement to pass these test are relatively high and are there strictly to incentivize students to review the lecture material before working on their case. They are mandatory to pass the course.

    The student groups will have to hand in multiple reports and spreadsheet models (with 'user manuals'), as well as conduct discussions (within industry group) of modeling issues. Students will present their casework three times. Finally, each group will issue an "Analyst Report" and "Pitch" (present) their "Investment Case" (BUY/HOLD/SELL) to "investors" (the class).

    In addition, the students will be given feedback on their Presentation, Writing and Typography skills in relation to their reports and presentations of their case company. The final report and presentation will partly be graded on how convincing, understandable and well argued the report and presentation are. Communication efficiency is therefore essential.

  • Required prerequisites

    Students taking this course are required to possess a good understanding of corporate finance, as documented through either a prior completion of the course FIE402 or equivalent courses at other institutions. This is an advanced course in Corporate Valuation and students are expected to have a basic grasp of valuation prior to taking the course. Students not meeting these requirements will need the instructor's approval.

  • Credit reduction due to overlap

    FIE437 is a continuation of FIE437A and FIE437B and students will not get credit for more than one of these courses.

  • Requirements for course approval

    Mandatory Attendance: The success of a case based course depends on student participation, and hence class attendance is crucial. Repeated absence from class may result in failing the course. Attendance in all classes is mandatory, but exceptions can be made on a case by case basis.

    Individually each student must pass a minimum 70 percent overall score on the three multiple choice tests, and present all hand-ins. The first multiple choice test is mandatory, and will be the basis for case selection.

    Students must also review and give feedback on one other group's report on the historical performance of their case.

  • Assessment

    The course is graded [A-F] using the following two elements:

    1. Portfolio: 4x (Group Based) Case Reports (50%) [A-F]
    2. 4x Presentations (50%) [A-F]

    All elements must be passed in the same semester.

    Since this is a case-based course with several cases reappearing year after year, students can take the course only one time. It is possible to retake the course only if a student fails.

  • Grading Scale

    A - F.

  • Computer tools

    Excel, Word, Powerpoint (or equivalent) and relevant data-sources will suffice.

  • Literature

    Koller/Goedhart/Wessels ("The McKinsey Book"), Valuation, 6th Edition, McKinsey & Co (2015). The whole book, but in particular Parts I-III (and any other chapter applicable to your case).

    Additional texts: The lecture material


ECTS Credits
Teaching language


Course responsible

Adjunct Assistant Professor Einar Bakke, Department of Finance, NHH