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AFIN8038 – Business Valuation

2021 – Session 1, Special circumstances

Notice

As part of Phase 3 of our return to campus plan, most units will now run tutorials, seminars and other small group activities on campus, and most will keep an online version available to those students unable to return or those who choose to continue their studies online.

To check the availability of face-to-face and online activities for your unit, please go to timetable viewer. To check detailed information on unit assessments visit your unit's iLearn space or consult your unit convenor.

General Information

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Unit convenor and teaching staff Unit convenor and teaching staff Lecturer and UC
Daniel Ding
Credit points Credit points
10
Prerequisites Prerequisites
(Admission to MActPrac or MFin) or (ACCG611 or ACCG6011 or AFIN613 or AFIN6013 or AFIN6012 or ACST603 or ACST6003 or AFIN858)
Corequisites Corequisites
Co-badged status Co-badged status
Unit description Unit description
This unit develops students' abilities to conduct equity valuation for investment purposes. This advanced module introduces the techniques used by equity financial analysts to measure the worth of a company and its investments. Students assume the role of a financial analyst and learn the mechanics of financial valuation by: performing industry and financial analysis, measuring accounting quality, estimating discount rates, forecasting cash flows, and ultimately issuing a buy/hold/sell recommendation on the firm based on the estimated target price.

Important Academic Dates

Information about important academic dates including deadlines for withdrawing from units are available at https://students.mq.edu.au/important-dates

Learning Outcomes

On successful completion of this unit, you will be able to:

  • ULO1: Explain the principles and theory behind each valuation technique.
  • ULO2: Evaluate various business valuation techniques and select and apply the most appropriate technique to real world valuation problems.
  • ULO3: Working collectively in a group to value the equity of a company and make recommendations.

General Assessment Information

Assessment criteria for all assessment tasks will be provided on the unit iLearn site.

It is the responsibility of students to view their marks for each within-session-assessment on iLearn within 20 days of posting. If there are any discrepancies, students must contact the unit convenor immediately. Failure to do so will mean that queries received after the release of final results regarding assessment tasks (not including the final exam mark) will not be addressed.

Late submissions and extensions

Tasks 10% or less – No extensions will be granted. Students who have not submitted the task prior to the deadline will be awarded a mark of 0 for the task, except for cases in which an application for special consideration is made and approved.

Tasks above 10% - No extensions will be granted. There will be a deduction of 10% of the total available marks made from the total awarded mark for each 24 hour period or part thereof that the submission is late (for example, 25 hours late in submission – 20% penalty). This penalty does not apply for cases in which an application for special consideration is made and approved. No submission will be accepted after solutions have been posted.

Assessment Tasks

Name Weighting Hurdle Due
Online Quiz 20% No Week 7-8
Valuation Report 40% No Week 12
Final Examination 40% No During university examination period

Online Quiz

Assessment Type 1: Quiz/Test
Indicative Time on Task 2: 10 hours
Due: Week 7-8
Weighting: 20%

 

An online quiz consisting of multiple choice questions. The duration of the quiz will be 45 minutes.

 


On successful completion you will be able to:
  • Explain the principles and theory behind each valuation technique.
  • Evaluate various business valuation techniques and select and apply the most appropriate technique to real world valuation problems.

Valuation Report

Assessment Type 1: Report
Indicative Time on Task 2: 40 hours
Due: Week 12
Weighting: 40%

 

Students will work in groups to conduct quantitative and qualitative analysis on business valuation and produce a report of 1500 - 2500 words. Of this, 50% of this group work assessment will be allocated to individual performance.

 


On successful completion you will be able to:
  • Explain the principles and theory behind each valuation technique.
  • Evaluate various business valuation techniques and select and apply the most appropriate technique to real world valuation problems.
  • Working collectively in a group to value the equity of a company and make recommendations.

Final Examination

Assessment Type 1: Examination
Indicative Time on Task 2: 15 hours
Due: During university examination period
Weighting: 40%

 

An online open book two hour exam will be held during the University Examination Period.

 


On successful completion you will be able to:
  • Explain the principles and theory behind each valuation technique.
  • Evaluate various business valuation techniques and select and apply the most appropriate technique to real world valuation problems.

1 If you need help with your assignment, please contact:

  • the academic teaching staff in your unit for guidance in understanding or completing this type of assessment
  • the Learning Skills Unit for academic skills support.

2 Indicative time-on-task is an estimate of the time required for completion of the assessment task and is subject to individual variation

Delivery and Resources

Required Text: "Damodaran on Valuation" Second Edition by Aswath Damodaran. ISBN: 978-0471751212 The text is available from the Macquarie University Co-op Bookshop (https://www.coop.com.au/s/macquarie-university). You can also check the 2nd hand bookshop or search online. Macquarie University library has a few copies as well. Other relevant reading materials besides the textbook will be provided and accessible via iLearn.
Unit Web Page:

Course material is available on the learning management system at http://iLearn.mq.edu.au You are strongly encouraged to regularly visit the website and use it as a resource centre to assist with your learning. All lecture material and examples, homework questions and answers, administration issues, and supplementary readings will be available on this site as the course progresses. If you are unable to access the website because you are not aware of or have forgotten your username and password, please contact the IT helpdesk. All information can be found at http://informatics.mq.edu.au/help/

With regards to assistance in using iLearn please visit the following link. http://www.mq.edu.au/ iLearn/student_info/index.htm You can follow the tabs on the left, i.e., “Getting Started” and “Access iLearn” Please remember to log out when you have finished using iLearn. Failure to do so could result in unauthorised access to your iLearn account.

Technology Used and Required: Students will require a calculator (scientific or financial) capable of handling exponents. Simple financial functions (as found on financial calculators) will not be required. If the calculator is to be used in exams then it must NOT be capable of storing text or formulae OR it must easily be demonstrated that all memory has been cleared. Students must be familiar with spreadsheet technology (eg MS Excel or equivalent)
Delivery Format and Other Details:

Classes

  • There are 13 weekly sessions of 3 hours.
  • See timetable for classes on the University web site at: http://www.timetables.mq.edu.au/
  • All students are to attend all classes except in cases of illness or unexpected events of a serious nature (eg family bereavement).

Teaching and Learning Activities

Contact sessions are three hours. There will be one short break during the session. Students are required to prepare for each lecture by reading the material set from the required textbook. Students are encouraged to ask questions, initiate discussions, and provide input from relevant personal experience.

Unit Schedule

Week Seminar
1 Module 1- Introduction, Sources of Information, and Industry Analysis
2 Module 2- Financial Reporting and Analysis
3 Module 3- Market Valuation: Relative Valuation Techniques (PART 1)
4 Module 3- Market Valuation: Relative Valuation Techniques (PART 2)
5 Module 4- Advanced Estimation of Discount Rates 
6 Module 4- Advanced Estimation of Discount Rates
RECESS  
7 Module 5- Quality of Financial Statement and Reliance on Accounting Numbers
8 Module 6- Discounted Cash Flow (DCF) Valuation - Calculating Free Cash Flows (PART 1)
9 Module 6- Discounted Cash Flow (DCF) Valuation - Calculating Free Cash Flows (PART 2)
10 Module 7 - Forecasting Free Cash Flows
11 Module 8- Issues in Estimating Terminal Value
12 Module 9- A Practitioner's Approach to Valuing Firms: The Case of ValueCo Inc.
13 Revision Class

 

Policies and Procedures

Macquarie University policies and procedures are accessible from Policy Central (https://staff.mq.edu.au/work/strategy-planning-and-governance/university-policies-and-procedures/policy-central). Students should be aware of the following policies in particular with regard to Learning and Teaching:

Students seeking more policy resources can visit the Student Policy Gateway (https://students.mq.edu.au/support/study/student-policy-gateway). It is your one-stop-shop for the key policies you need to know about throughout your undergraduate student journey.

If you would like to see all the policies relevant to Learning and Teaching visit Policy Central (https://staff.mq.edu.au/work/strategy-planning-and-governance/university-policies-and-procedures/policy-central).

Student Code of Conduct

Macquarie University students have a responsibility to be familiar with the Student Code of Conduct: https://students.mq.edu.au/admin/other-resources/student-conduct

Results

Results published on platform other than eStudent, (eg. iLearn, Coursera etc.) or released directly by your Unit Convenor, are not confirmed as they are subject to final approval by the University. Once approved, final results will be sent to your student email address and will be made available in eStudent. For more information visit ask.mq.edu.au or if you are a Global MBA student contact globalmba.support@mq.edu.au

Supplementary exams

Information regarding supplementary exams, including dates, is available at: 

http://www.businessandeconomics.mq.edu.au/current_students/undergraduate/how_do_i/disruption_to_studies

Student Support

Macquarie University provides a range of support services for students. For details, visit http://students.mq.edu.au/support/

Learning Skills

Learning Skills (mq.edu.au/learningskills) provides academic writing resources and study strategies to help you improve your marks and take control of your study.

The Library provides online and face to face support to help you find and use relevant information resources. 

Student Enquiry Service

For all student enquiries, visit Student Connect at ask.mq.edu.au

If you are a Global MBA student contact globalmba.support@mq.edu.au

Equity Support

Students with a disability are encouraged to contact the Disability Service who can provide appropriate help with any issues that arise during their studies.

IT Help

For help with University computer systems and technology, visit http://www.mq.edu.au/about_us/offices_and_units/information_technology/help/

When using the University's IT, you must adhere to the Acceptable Use of IT Resources Policy. The policy applies to all who connect to the MQ network including students.

Changes from Previous Offering

None