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Unit of study_

FINC6021: Corporate Valuation

This unit applies all aspects of finance theory to the general problem of valuing companies and other financial assets. This requires a synthesis of the fundamental concepts of present value, cost of capital, security valuation, asset pricing models, optimal capital structures, derivative pricing and some related accounting concepts. The unit aims to reach a level of practical application that allows students to understand both the theoretical frameworks and institutional conventions of real-world corporate valuations. Basic valuation concepts from accounting are reconciled with the finance theory on which firm value ultimately stands. Students are asked to make extensive use of Excel or similar software in valuation exercises.

Code FINC6021
Academic unit Finance
Credit points 6
Prerequisites:
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FINC5001
Corequisites:
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None
Prohibitions:
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None

At the completion of this unit, you should be able to:

  • LO1. demonstrate an understanding of the various approaches to valuation analysis
  • LO2. solve practical financial problems using a range of valuation techniques
  • LO3. understand and create pro-forma financial statements for a variety of business structures
  • LO4. estimate a firm's cost of capital
  • LO5. generate an estimate of firm value and an appropriate recommendation based on an assessment of relevant quantitative and qualitative information
  • LO6. analyse critically the models covered in the unit and be able to discuss their appropriateness under various scenarios
  • LO7. interpret the financial implications of valuation results
  • LO8. ascertain the relevance of information sources for different valuation models
  • LO9. test the reasonableness of financial valuation results
  • LO10. solve for value estimates using a range of developed methods
  • LO11. use the functionality of Microsoft excel to create pro-formas financial statements, undertake cost of capital calculations, and perform scenario based analyses
  • LO12. identify firm structural issues and be able to assess the value of changes in investment and operational policies
  • LO13. effectively communicate valuation results through a range of quantitative and qualitative outputs
  • LO14. express key assumptions and forecasts for which valuation hinges on.

Unit outlines

Unit outlines will be available 1 week before the first day of teaching for the relevant session.