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Business
Valuation (FIN4043)
All relevant
information
on my UIC Business
Valuation (FIN4043) will be posted on this website.
Click to go
directly to: (1) Updates, (2) Course
Outline and Lecture Notes, (3) Lecture Review,
or(4) Course Details.
UPDATES Back to top || Updates || Course Outline and Lecture Notes || Lecture
Review || Course Details
Please check here for updates during the semester:
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| March
6, 2018 |
NOTE
ON TEXTBOOK: I mentioned that there are US and international
version of the textbook, plus with cases and without cases.
For our purpose, the content we use from the textbook will
be the same regardless of the textbook version; as a result,
just find the version that you can easily find. |
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| March
6, 2018 |
My
own powerpoint slides / supplementary slides for chapter
1 to 5 had been posted below to use for class.
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| March
12, 2018 |
Group
information (group name, members, and topic company) was
added to Assessment section below, please provide me with
any updates if needed.
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| March
12, 2018 |
Make
up class updates. Make up class on Saturday, March 17, 2018
from 9 am to 12 pm noon at T6 - 201. March 17 is a make
up class for Monday March 19 which will have no class. But
there will be class on Monday March 26 at usual time and
location.
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| March
17, 2018 |
There
is no class on Monday March 19, our next class will be on
Monday March 26 at our normal location and time. |
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| March
26, 2018 |
I
have applied for a classroom for Saturday April 28 from 10
am to 12 pm for our mid-term test. I have also applied for
a lab for Saturday April 21 from 10 am to 1 pm for a mid-term
review, introduction to our valuation model on excel, recasting
of financials into the valuation model, answer questions on
company selection for the group project, and review of Ch
2 strategic analysis models for your interim report due Monday
April 23. I will provide confirmation of location and time
once the applications are approved. |
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| March
26, 2018 |
I
have received a question on how far back the numbers to analysis.
For now, download the year end financial statements for the
previous 4 year ends so that you would have at least the last
five complete financial years' information. However, we will
do the "recasting" before doing the ratio analysis
(recasting means to summarize the all the accounts into main
ones first). Instead of doing the ratio or financial analysis
now, do more research on finding information on comparables
like analyst reports and industry association information
on the current and future condition of the industry first.
In the lab to be scheduled in the middle of April, we will
do the recasting and financial analysis using the template
so it would be easier to do. |
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| March
26, 2018 |
Purpose
of the interim report due Monday April 23 is for me to review
your business and strategic analysis (chapter 2 models) to
make sure everything relevant is included. I will give you
feedback so that when you hand in the final report at the
end of term, you will not be missing important marks. |
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| March
29, 2018 |
The
mid-term test will be held on Saturday April 28 from 10 am
to noon at T6 Room 305. |
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| April
4, 2018 |
This
is more of how the business strategy models should be applied
and what I expect for the group project: |
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-
I
am asking the following question: you select a stock
and provide a buy, hold, or sell recommendation,
-
the
buy, hold, or sell recommendation is based on comparison
of current price to your calculated expected price,
- your
calculated expected price is based on the second part
of the valuation exercise,
- if
your calculated expected price is higher than current
market price, then a buy recommendation; if lower than
current market price, then a sell recommendation,
- as
a result, the buy, hold, sell recommendation is purely
based on whether current market price is under-valued
or over-valued,
- the
strategic analysis models is done here to provide a parameter
for your projection of your firm's future performance,
- first
is an estimation of the total market size in the future
using PESTEL, it is a limiting factor in that your firm
cannot have revenue higher than the expected total market
size,
- second
is your firm's current position in terms of market share
and its competitive position versus other competitors,
and the competitive advantage of all firms in the industry,
- third
is your firm's future position in the industry versus
other competitors,
- the
second and the third step are to be used as a framework
as input to your projections.
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| April
23, 2018 |
To
confirm, journal entry to correct any distortion found (in
chapter 3) is required for the examination. |
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| May
14, 2018 |
The
feedback on the group interim report is meant to help you
improve the final report; as a result, the more feedback and
comments there are, the higher the potential for incremental
marks that your report will receive. |
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| May
17, 2018 |
These
are some common questions that was asked during Monday question
sessions. I have also included some clarifications and specify
information for the final group report. |
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-
CGS
= cost of goods sold = cost of sales (different
names for the same item like sales = revenue = turnover.
- DO
NOT USE QUOTES ACADEMIC RESEARCH PAPERS if you want to
say AI and robotics would improve manufacturing process;
it is a commonly agreed concept and most people would
agree, also it is your opinion, you do not need to find
someone else to support what you say. It is a prediction
of the future and there is no way to confirm who is correct.
The most important value add to the analysis is your opinion
on the future of the firm. If you have to find quotes
to support your future expectation then it means you are
not confident in your view because you have to find someone's
work to support your view. Also keep in mind there are
academic research that support many views and you can
easily find academic research that support your opinion
making them not a good reference.
-
In
my suggested list of topics, I did not put in accounting
analysis because it would be difficult to perform
at our level. In addition, not all unusual items
are problems as described in one of the earlier
chapters. As a result, the most that you can do
is to briefly describe some potential problems.
For example, if you firm is highly leveraged then
a risk area is to understate the liabilities, or
if you firm is a high growth firm then the risk
is management overstate assets by recognizing unrealized
sale or unearned revenue.
- Financial
analysis = review of your firms' financial position up
to this point (before projecting into the future), it
is the ratios analysis. My groups have "described"
the ratios without analysis. Describe means you calculated
the ratio and say it is slight higher or lower and no
more. Analysis means giving a reason for it. For example,
the sales might be lower in 2015 only, then analysis would
require providing the actual reason and why or why not
to include this factor in your projections. It is generally
done by the exception process, i.e. if the numbers over
the last few years shows a steady increase, then no need
to put in front; but if there is a big difference in one
particular year only then analysis / explanation is required.
The other analysis should be done to compare your firm
with the comparable firms, and exceptions should be report
only. For example, if your firm has a much lower debt
to equity ratio than the other firms or the industry average,
then an explanation of why it is lower is required. All
these exceptions can be done very briefly but you can
leave the historical analysis in the appendix.
- Proforma
= projection = forecast, it is our excel process of putting
in your assumptions of the future summarized in sales
growth and financial condition of your firms. You might
want to include your excel out in the appendix.
- Proforma
assumptions = your annual sales growth is based on what?
Includes your global and industry analysis and explaining
why you set your growth rates. It would also include any
changes in cost structure. For example, you might have
higher growth rate for sales starting 2025 because only
electric cars are allowed to be sold by that year in China
(assuming you are an electric car producer). Or you might
assume that AI and robotics allow an increase or decrease
in production cost in the future. This is where most of
the marks are because it explains your thinking of what
will happen in the future for the industry and your firm.
- Financial
projections and valuation = your excel input of sales
and other financial condition of the firm in your projections.
This would include sales projection, change in cost structure,
debt level, etc but in excel format. You might want to
include your excel out in the appendix, but since the
excel only shows the annual growth rate, the proforma
assumptions part is your explanation of the details of
the annual sales growth rates and change in cost structure
and other assumptions.
- Summary
of valuation and recommendation = you are using four to
six methods to value the firm. They will not come to the
same conclusion (99% of the time each approach will give
you a different value). Here you have to summarize the
result and explain which one you think is the one you
use. Then compare this value to market price to decide
if the market price is over-prized or under-prized, then
recommend action.
- If
the number of shares cannot be determined, then you can
do a valuation of the whole firm and equity without doing
a per share valuation. Just take out the last part of
each calcuation to a per share basis.
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| May
17, 2018 |
These
are the steps to find the two discount rates which you will
need as input to the excel for the group project: |
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Cost
of equity:
- 1.
look for the cost of equity directly on financial information
website (google company name and cost of equity, potential
websites are finbix.io or gurufocus.com)
- 2.
calculate it yourself by (a) find the beta of your firm
on yahoo or other financial website, (b) assume risk free
rate of 3% and market return of 10% (you can use other
reasonable rates), (c) use CAPM formula of required return
= risk free rate + beta (market return - risk free rate)
OR
- 3.
if cannot find or calculate cost of equity, email me.
|
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Weighted
Average Cost of Capital (WACC)
- 1.
look for WACC directly on financial information website
(google company name and WACC, potential websites are
finbix.io or gurufocus.com)
- 2.
provide me with the following information and I can estimate
the WACC for your firm, information to provide me include
(a) beta of your firm, (b) market capitalization (i.e.
share outstanding x market price per share), (c) book
value of all debts.
- 3. if
your firm has more than equity and debt (like preferred
shares or other kinds of debt), email me the information
and I can estimate a WACC for your firm.
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| May
25, 2018 |
The
data to be used for the valuation approaches practice question
for next Monday May 28, 2018 class can
be downloaded here. |
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| May
29, 2018 |
When
can terminal value be started to calculate in the dividend
discount staged growth model and cash flow approach? |
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The
earliest that terminal value in the calculation is in the
year before the perpetual growth rate starts. In the cash
flow approach practice questions (for equity and firm valuation),
the 3% growth starts after year 6. As a result, the earliest
that the terminal value can be calculated is in year 5. In
year 5, there will be two numbers, year 5's own dividend and
a terminal value using year 6 FCF, the current calculation
presented in the cash flow approach practice question is a
correct way to do terminal value. |
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However,
when you look at our terminal value calculation for the dividend
discount approach staged growth model, we start our terminal
value calculation in the year after the second stage slower
growth, which one is correct? Both are correct because they
will get the same answer. In other words, if you do your terminal
value calculation any year after the slower growth year, you
will get the same answer. The dividend discount's one year
delayed terminal value calculation is done to show the full
individual dividends to be discounted in the earlier faster
growth years while the cash flow approach FCF has no fixed
growth rate in year 1 to 6 hence there is no point to delay
terminal value calculation. |
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| March
31, 2018 |
The
final exam will be held on Saturday May 2 from 2 to 5pm at
T5 Room 307. |
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Back to top || Updates || Course Outline and Lecture Notes || Lecture
Review || Course Details
ASSESSMENT
Back to top || Updates || Course Outline and Lecture Notes || Lecture
Review || Course Details
Course
syllabus can be downloaded here.
Participation,
mid-term test, assignment, and final exam rubrics can be
downloaded here.
ALL in-class
quizzes, assignments, mid-term test, and final and supplementary
examinations are, unless specifically indicated, INDIVIDUAL
effort, meaning that you should work on your own material and any
unscholarly actions prohibited by the school must be avoided.
I will post ALL relevant
course materials, updated information,
correspondences, and relevant student questions in the UPDATES section
on this page. Students are responsble
to check the UPDATES
section frequently on their own to ensure that they are up-to-date.
The final grade for this course is based on the following components:
| Class
participation |
10% |
| Assignment |
20% |
| Midterm
test |
20% |
| Final
examination |
50% |
| |
100% |
Below
is a summary of the marking of each component.
Class
participation, discussion and assignment (10% of total).
Part of the evaluation is based on class attendance, class participation
and discussions, and preparation for class. The other part is based
on pop quiz, practice questions, or group work that might be provided
during class. Participantion
rubrics can be downloaded
here.
Mid-term test (20% of total). The mid-term test will cover Chapters
1 to 6 and it will be held on Saturday March 28, 2017 from 10am
to 12pm. Please see mid-term test rubrics for more details on the
grading. Mid-term
test rubrics can be downloaded
here.
Assignment
(20% of total). The
assignment consist of an interim report submission due on April
23, 2018 and a final group project due on the last day of class
on May 28, 2018. Assignment rubrics can be downloaded
here.
The
assignment is to complete a group valuation report for a company
of your choice. The assignment is due on May 28, 2017 10 am via
a hard copy and an email to my UIC email account. The date stamp
on the email will serve as verification of submittance.
The
assignment are marked only based on the quality of analysis during
the valuation process and the resulting conclusions. The assignment
result will NOT be based on the quantity of the report.
The
assignment can be completed by a group of not more than four students
(i.e. one student up to four students per group maximum). Due to
scheduling or personal reasons, the assignment can be completed
by one student only and this one student will be considered as a
group. For each group, the information required for me WITHIN THE
FIRST TWO WEEKS would be a group name, each group member's name
and student number and UIC contact email, and the subject firm of
the valuation report. For any communications to me regarding the
assignment, please use your group name as identifier so I know which
group the communication is from.
The
interim report due on April 23, 2018 will consist of a strategic,
financial, and accounting analysis of your selected companies. Strategic
analysis will include evaluation of the company's strategic position
using Porter's Five Forces and numerous other strategic analysis
techniques. Financial analysis will include the use of leverage,
profitability, liquidity, turnover, and market ratios to evaluate
the financial position of your companies. Accounting analysis will
include the analysis of the financial information of your companies
to determine the adjustments required to determine the free cash
flow to use as input to our valuation approaches. The main part
of the interim report (i.e. excluding cover page, table of content,
and all appendices) should be no more than 10 pages.
The
final group project report due on May 28, 2018 will consist of the
analysis performed in the interim report on your selected companies
plus a valuation of the companies based using the dividends, free
cash flow, and multiples approaches. Information from the interim
report and your view of the future of the companies and the market
conditions will be used to arrive at a valuation of your selected
companies. The main part of the final group project (i.e. excluding
cover page, table of content, and all appendices) should be no more
than 15 pages. Software copy of the report in pdf format, the excel,
and supporting documents and references should be emailed to myself
or submitted via iSpace, plus a hard copy of the report itself should
be submitted during class on May 28, 2018.
The
final group report should have the following components:
-
Cover
page (should include company name, group name, group member information,
and other relevant information)
-
-
-
-
-
-
Financial
projections and valuation
-
Summary
of valuation and recommendation
-
GROUPS
INFO FOR PROJECT AND COMPANIES |
Class
1 |
|
Class
2 |
Anonymous
= Pixar Animation Studios = Yongye 2007, Xiping 2110, Chunpeng
2115, Tao 2014 |
|
3+1
= Naomi 2076, Ginny 2032, Veronica 2180, Lewick 2160 |
Bad
girl = Huawei = Nancy 2002, Anja 2141, Alice 2120, Emily 2024
|
|
Amigo
= Ray 2138, Tiffany 2074, Jennifer 4046, Kevin 2199 |
| Cowboy
On The Run = Inner Mongolia Yili Industrial Group = Annie
2143, Cindy 2152, Vivian 2105 |
|
BP
P.L.C. = Daisy 2147, Emily 2018, Kaycee 2027, Shirley 2007 |
| Forward
= China Eastern Airlines = Rebecca 2185, Carol 2164, Lavander
2090, Jo 2193 |
|
Fruit
family = McDonald's = Ann 1099, Saffy 2005, Janet 2092 |
Four-ever
= Sun Hung Kai Properties = Xyza 2079, Ashley 2148, Chelsea
1004, Anna 2061 |
|
Inception
= Walmart = Emma 2094, Bond 2028, Early 3018, Camille 0013 |
| Huawei
= Katrina 2187, Evelyn 2194, Joyce 2066 |
|
LiNing
= William 2042, Doris 2071, Peter 5067, Crystal 2135 |
MIRB
= Coco-Cola = Britt 2106, Miranda 2183 |
|
Net
Group = China Southern Airline = Felicity 7014, Ekko 2104,
Alan 2093, August 2096 |
| Sky
= First Automobile Work Shop (FAW) = Miko 4008, Adora 0072,
Clover 2162, Bella 7013 |
|
Sexy
Koala = NetEase = Cynthia 2067, Sherry 2197, Christina 7003,
Catherine 2150 |
Tesla
= 2099, 2016, 2049, 2063 |
|
Sophia
= SF Express = Shaller 2011, Kristy 2045, Setia 2145 |
| Tiffany
= Eleanor 2130, Andy 2032, Tinner 2012, Jacki 2140 |
|
UNO
= Unilever = Carolin 4033, Sylvia 2081, Claire 2126, Maria
2019 |
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|
Venus
= Inditex = Viola 2153, Elaine 2178, Justine 2091 |
| |
|
Wonder
Ladies = Starbucks = Angel 2071, Ivy 9023, Fiona 2028, Cheryl
2026 |
Final examination (50% of total).
The
final exam will cover all Chapters but more focus will be placed on
the Chapters not covered in the mid-term test (i.e. Chapter 7 to 12).
Final examination rubrics can be downloaded
here. The
final examination is to be held in the afternoon of Saturday June
2, 2018 from 2 to 5pm at T5 room 307.
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Review || Course Details
LECTURE
REVIEW Back to top
|| Updates || Course Outline
and Lecture Notes || Lecture Review ||
Course Details
A
summary of our discussion during the lecture is provided here for
your reivew
| March
5, 2018 |
We
went through the following topics today: |
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| March
12, 2018 |
We
went through the following topics today: |
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- the
capital market and its intermediaries,
- the
determinants of information quality,
- business
analysis,
- PESTEL
and SWOT for maco environmental analysis,
- industry
analysis using Porter's Five Forces model,
- firm
analysis using value chain analysis, product life cycle,
BCG matrix, ansoff matrix for organic growth, and
- Porter's
generic strategies of cost leadership and differentiation.
|
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| March
17, 2018 |
We
went through the following topics today: |
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- some
basic issues when selecting firm for the group project
assignment,
- some
basic issues when reviewing information available for
the selected firm,
- the
basic perspective and objectives of the report preparer,
- the
essence of the criteria that determine the quality of
the group report,
- using
UIC as an example of a college under business strategic
analysis using PESTEL, cost leadership vs differentiation
and high margin, etc
- 3
questions to ask regarding the quality of the accounting
information provided by management,
- management
objectives that might incentize them to exercise their
accounting discretion,
- potential
red flags that might indicate potential biases in the
recording of the firms' financial and accounting information,
- Conservative
accounting is not good accounting, and
- Not
all unusual accounting is questionable.
|
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| March
26, 2018 |
We
went through the following topics today: |
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- conservative
accounting is not good accounting,
- not
all unusual accounting is questionable,
- accounting
definition of assets and liabilities,
- why
and how to overstate assets,
- journal
entries to adjust for asset overstatement,
- why
and how to understate assets,
- journal
entries to adjust for asset understatement,
- why
and how to understate liabilities,
- journal
entries to adjust for liabilities understatement, and
- why
and how to misstate equty.
|
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| April
9, 2018 |
We
went through the following topics today: |
| |
- brief
summary of chapters 1 to 4,
- brief
review of how chapters 1 to 5 should be incorporated into
group project,
- financial
ratios introduction,
- profitability
ratios,
- leverage
ratios,
- liquidity
ratios,
- activity
ratios,
- market
ratios, and
- cash
flow preparation.
|
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|
| April
16, 2018 |
We
went through the following topics today: |
| |
- brief
summary of chapter 5,
- using
industry sales and growth as starting point for expected
future sales growth of your firm,
- your
firm's strategies and competitive positive are also input
to your firm's future sales growth level,
- sales
growth of firms mean-reverts to industry growth level
over time as firms competes,
- net
income or earnings can fluctuates short term,
- return
on assets of firms in industry should mean-reverts to
industry ROA,
- Dupont
analysis of breaking down ROA into operating margin and
asset turnover can help determine strategy being used
by firm,
- other
ratios on working capital level, long term asset size,
and capital structure can be used to provide a parameter
for your projections, and
- scenario
analysis should be performed for outcome of potential
best or worst case scenario.
|
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| April
23, 2018 |
We
went through the following topics today: |
| |
- midterm
test logistic details,
- midterm
test review of topics,
- discussion
of interim group report received,
- introduction
to valuation approaches,
- introduction
to multiples approach, and
- introduction
to dividend discount approach.
|
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|
| April
30, 2018 |
We
went through the following topics today: |
| |
- interim
group report feedback,
- time
value of money,
- WACC
calculation,
- cost
of equity,
- cost
of debt after tax,
- dividend
discount model,
- no
growth dividend valuation,
- constant
growth dividend valuation,
- staged
growth dividend valuation, and
- multiples
approach using PE, PB, PS multiples.
|
|
|
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|
| May
7, 2018 |
We
went through the following topics today: |
| |
- midterm
test feedback,
- practice
questions on dividend discount approach,
- no
growth dividend valuation using Ford,
- constant
growth dividend valuation example using Ford,
- staged
growth dividend valuation example using Ford,
- how
to determine firm value using dividend valuation in project,
- multiples
approach example using Ford,
- cash
flow approach to valuation introduction,
- FCFF
cash flow approach to value firm value,
- FCFE
cash flow approach to value equity value,
- FCFF
and FCFE differences,
- WACC
and cost of equity as discount rates, and
- relationship
between firm and equity value.
|
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|
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|
| May
14, 2018 |
We
went through the following topics today: |
| |
- project
numbers to estimate - sales forecast,
- project
numbers to estimate - working capital, depreciation, and
capex,
- "Others"
in Assets and Liabilities in excel
- "Gain/Loss
from sales" in excel,
- Forward
P/E ratio,
- equity
valuation in chapter 9,
- credit
analysis in chapter 10,
- review
and comparison of FCF approach to multiples and dividends
approaches,
- abnormal
return concept,
- equity
valuation using abnormal return concept, and
- firm
valuation using abnormal return concept.
|
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| May
21, 2018 |
We
went through the following topics today: |
| |
- what
the final group report should look like,
- steps
to get to what the final group report should look like,
- step
by step description of cash flow approach,
- step
by step description of abnormal earnings approach,
- treatment
of large cash balances, and
- see
Updates above on how to get the cost of equity and WACC
for your excel input.
|
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| May
28, 2018 |
We
went through the following topics today: |
| |
- introduction
to mergers and acquisitions,
- advantages
of mergers and acquisitions,
- potential
problems of mergers and acquisitions,
- special
considerations on financing and payment forms for buyers
in an acquisition,
- effects
for payment forms for target shareholders,
- considerations
for potential outcome of an acquisition,
- final
exam review,
- dividend
discount approach for equity valuation practice questions,
- cash
flow approach for equity and firm valuation practice questions,
and
- abnormal
earnings approach for equity and firm valuation practice
questions.
|
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|
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|
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See
Updates above for when terminal value for dividend discount
staged growth and cash flow approach can be used. |
| |
|
Back to top || Updates || Course Outline and Lecture Notes || Lecture
Review || Course Details
COURSE
OUTLINE AND LECTURE NOTES Back to top || Updates || Course Outline and Lecture Notes || Lecture
Review || Course Details
This course outline is tentative and subject to change based on our progress. Please check the UPDATES section and table below for latest information.
Course
syllabus can be downloaded here.
| Lecture
1 |
Introduction
and Business models and strategy analysis, Reading: Chapter 1 and 2 |
| March
5, 2018 |
|
| |
Recommended
HW assign: Ch 1 Q5 |
| |
|
| Lecture
2 |
Business
models and strategy analysis, Reading: Chapter 2 |
| March
12, 2018 |
|
| |
Recommended
HW assign: Ch 2 Q6, Q8, Q9 |
| |
Group
project group name, members, subject company due. |
| |
|
| Lecture
3 |
Overview
and implementing of accounting analysis, Reading: Chapter 3 and 4 |
| March
17, 2018 (Sat) |
|
| |
Recommended
HW assign: Ch 3 Q5, Q6, Q8 |
| |
Make
up class for our holiday on April 2, 2018, class will be held
at T6-201 from 9 am to 12 pm noon. |
| |
|
| Lecture
4 |
Overview
and implementing of accounting analysis, Reading: Chapter 3 and 4 |
| March
26, 2018 |
|
| |
Recommended
HW assign: Ch 4 Q6, Q7 |
| |
|
| Lecture
5 |
Business
and financial forecasting,
Reading: Chapter 5 and 6 |
| April
9, 2018 |
|
| |
Recommended
HW assign: Ch 5 Q4. Q6, Q8 |
| |
|
| Lecture
6 |
Business
and financial forecasting,
Reading: Chapter 5 and 6 |
| April
16, 2018 |
|
| |
Recommended
HW assign: Ch 6 Q4, Q5 |
| |
|
| Lecture
7 |
Valuation
theory and concepts, Reading:
Chapter 7 |
| April
23, 2018 |
|
| |
Recommended
HW assign: Ch 7 Q3, Q4 |
| |
Group
project interim write up due. |
| |
|
| April
28, 2018 |
Mid-term
test Saturday April 28 from 10am to 12pm at T6 Room 305. |
| |
Chapters
1 to 6. |
| |
|
| |
|
| Lecture
8 |
Valuation
theory and concepts, Reading:
Chapter 7 |
| April
30, 2018 |
|
| |
Recommended
HW assign: Ch 7 Q3, Q4 |
| |
|
| Lecture
9 |
Valuation
implementation, Reading:
Chapter 8 |
| May
7, 2018 |
|
| |
Recommended
HW assign: Ch 8 Q10 |
| |
|
| Lecture
10 |
Equity
security analysis,
Reading: Chapter 9 |
| May
14, 2018 |
|
| |
Recommended
HW assign: Ch 9 Q6, Q10 |
| |
Credit
analysis and distress prediction,
Reading: Chapter 10 |
| |
|
| |
Recommended
HW assign: Ch 10 Q7, Q10 |
| |
|
| Lecture
11 |
Mergers
and acquisitions,
Reading: Chapter 11 |
| May
21, 2018 |
|
| |
|
| May
28, 2018 |
Assignment
due Monday May 28 before 10am |
| |
|
| |
|
| Lecture
12 |
Special
topics,
Reading: Chapter 12 |
| May
28, 2018 |
|
| |
Recommended
HW assign: Ch
12 Q9 |
| |
Final
examination review |
| |
|
| |
|
| June
2, 2018 |
Final Examination, T5-307 2 to 5pm |
Back to top || Updates || Course Outline and Lecture Notes || Lecture
Review || Course Details
COURSE DETAILS Back to top || Updates || Course Outline and Lecture Notes || Lecture
Review || Course Details
| Course |
Business
Valuation (FIN4043), Semester II (2017-2018) |
| |
|
| |
|
| Prerequisites |
FIN2003
Financial Management |
| |
|
| Time
and Location |
Mondays
Class 1: 10am to 1pm; Class 2: 3pm to 6pm; both classes at
T6-401 |
| |
|
| Instructor |
Dr.
Thomas Wu |
| Office |
T1-302-R3 |
| Office
hours |
By
appointment only Monday 1pm to 3pm |
| Email |
thomaswu@uic.edu.hk |
| Website |
|
| |
|
| Teaching
Assistant |
Ms.
Jenny Chen |
Office |
T1-301-R5 |
Email |
jennywxchen@uic.edu.hk |
| |
|
| Aims
and Objectives |
The
objective of this course is to introduce essential business
valuation concepts, and applications techniques for students
to analyse dynamic business environments of a company, interpret
companiesˇ¦ business models and financial statements, translate
business logics and assumptions into financial forecast, and
select appropriate valuation methods to ascertain corporate
value. This course aims at helping students to be equipped
with the essential techniques required by financial analysts.
|
| |
|
| Notes
to Students |
1.
Students are advised to pre-read the assigned chapter before
each lecture. |
| |
2.
Students are expected to participate actively in class discussions,
ask relevant questions, and share their views. |
| |
3.
The use of the Chinese version and/or the photocopied version
of the textbook in class is disallowed. |
| |
4.
It is absolutely essential for students to complete the homework
assignments according to schedule. Students are required to
complete the assignments in teams of two and submit to the
TAs hard copies of their work for marking. Suggested solutions
for homework and self-practice exercises/problems will be
available from iSpace. |
| |
5.
It is the studentsˇ¦ responsibility to seek help from their
respective instructors and teaching assistants. To ensure
that your instructor is available for consultation during
your desired date and time, please make an appointment with
the instructor in advance via email or whilst in class. Teaching
assistants are available to help students during their office
hours on a first-come, first-served basis. It is advisable
that you make an appointment with the TA in advance. Please
donˇ¦t wait till the last minute to obtain clarification on
what you do not understand. |
| |
|
| Suggested
Textbook |
Palepu,
K.G., Healy,M. (2013). Business Analysis and Valuation Using
Financial Statements, 5th Edition. South-Western, Cengage
Learning.
|
| |
|
| Reference |
Koller,T.,
Goedhart,M. & Wessels D. (2015) Valuation: Measuring and
Managing the value of companies. 6th Edition. John Wiley &
Sons. |
| |
|
| Teaching
Method |
The
course consists of class lectures and tutorials. Students
should attend all lectures and tutorials. Attendence
will be taken and there is a required minimum attendence
level. Students should have read and be familiar with assigned
readings and related materials before class. Students should
also work through practice questions and be familiar with
the use of a financial calculator. |
| |
|
| Grading
Policy |
All
university policies concerning acceptable student behavior
apply for this course. In particular, unscholarly actions
prohibited by the university should be avoided to prevent
regretable results from these actions. |
| |
|
| Calculator
Policy |
For
this course, a general purpose non-financial calcuator
can be used. Students who do not have ready access to a
financial calculator should be able to perform all the required
analysis and calculations using a general purpose non-financial
calculator for the tutorials, assignments, mid-term test,
and final examination.
You
can also use a non-programmable financial calculator for
the tutorials, assignment, mid-term test, and final examination.
Common financial calculators are HP12c and TI BAII PLUS. User manual in simplified chinese and a tutorial for the HP12c can be found here and a simple tutorial for the HP12c can be found here. User manual for the TI BAII can be found here.
Regardless
of the types of calculators used for this course, students
are responsible for their own equipment and they cannot
be shared in a quiz, test, or examination situation. As
a result, students MUST bring their own calculators to each
class. In addition, each student must be proficient in the
use of their own equipment.
Electronic
translators CANNOT be used for quiz, test, or examination
situations, but they can be used during class (only with
volume off) and your own study time.
|
| |
|
| Financial
Terms |
There
are specific terms that apply to accounting and finance,
and there are various online sources that can help students
understand these terms.
Download
and print for reference:
Online
finance dictionaries:
Other
unverified sources of financial references:
|
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Review || Course Details
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