Corporate Valuation is a course that draws on core corporate finance principles, theories and methods previously studied. Students will work in teams to value an existing company, present their analysis and investment recommendation. The techniques covered include discounted cash flow, multiple-based and asset-based valuations. Because of the richness of the approach, most of the focus will be on discounted cash flow analysis. While this entails more work and requires significant student initiative, this type of ‘learning by doing’ should provide a lasting framework.

Learning Outcomes

Upon successful completion, students will have the knowledge and skills to:

1. Apply appropriate techniques for company valuation;
2. Apply theories and concepts learned in other finance courses; and
3. Effectively work in groups and discuss results of the activities undertaken in a team.

Research-Led Teaching

Students undertaking this course will be imparted with the necessary skills for industry-based research. This will include involving students in critical analysis of industry-based problems such as valuation, capital budgeting and risk assessment.

Examination Material or equipment

Final exam: Dictionary, non-programmable calculator and one A4 page with notes on both sides (can be typed).

Required Resources

Students are expected to have access to a copy of the prescribed book for the duration of the semester. The book can be purchased from the on campus bookshop, with a small number of copies also available for 2 hour loan in the reserve loan section of the Chifley Library.

Koller, T., Goedhart, M. and Wessels, D., Valuation: Measuring and Managing the Value of Companies, 6th Edition, University Edition, Mc Kinsey & Co (John Wiley and Sons), 2015. [denoted ‘KGW’]

Library ebook link: Valuation, Mc Kinsey & Co, 6th Edition, University Edition

Hard copies are available in the library for standard and short loans.

Harry Hartog on campus stocks this title.

 

CFA Institute Code of Ethics and Standards of Professional Conduct

http://www.cfapubs.org/doi/pdf/10.2469/ccb.v2014.n6.1

 

CFA Institute Standards of Practice Handbook (Standard V)

http://www.cfapubs.org/doi/pdf/10.2469/ccb.v2014.n4.1

Recommended Resources

Damodaran A., Investment Valuation, 3rd Edition, University Edition (John Wiley and Sons), 2012. [denoted ‘Damodaran’]

Library ebook link: Damodaran, Investment Valuation, 3rd Edition, University Edition

Harry Hartog on campus stocks this title.

Additional materials will be made available on Wattle, including supplementary course notes, selected analyst reports, CFA readings, example worksheets, and other relevant items.

Staff Feedback

Students will be given feedback in the following forms in this course:

• Written comments
• Verbal comments
• Feedback to the whole class
• Feedback to groups

Continuous improvement                                    

We use feedback from students, professional bodies and staff to make regular improvements to the course. In response to this feedback, design improvements from the previous version of the course include:

• Weekly tutorials throughout the semester
• A reduction in the number of assignments
• Additional practice questions for the final examination

Student Feedback

ANU is committed to the demonstration of educational excellence and regularly seeks feedback from students. Students are encouraged to offer feedback directly to their Course Convener or through their College and Course representatives (if applicable). The feedback given in these surveys is anonymous and provides the Colleges, University Education Committee and Academic Board with opportunities to recognise excellent teaching, and opportunities for improvement. The Surveys and Evaluation website provides more information on student surveys at ANU and reports on the feedback provided on ANU courses.

Class Schedule

Week/Session	Summary of Activities	Assessment
1	Topic: Course overview & Valuation in context Activity: Lecture 1 (No workshop) (Teaching format is 2h lecture +1h workshop in general) Required student preparation: KGW Ch 1; Ch 2; Ch 3
2	Topic: DCF valuation Activity: Lecture 2, Workshop Required student preparation: KGW Ch 8; Ch 12; Ch 14
3	Topic: Building a company model & Reorganising the financial statements Activity: Lecture 3, Workshop Required student preparation: KGW Ch 9
4	Topic: Forecasting and model integrity Activity: Lecture 4, Workshop Required student preparation: KGW Ch 6, Ch 10, Ch 11
5	Topic: Cost of capital Activity: Lecture 5, Workshop Required student preparation: KGW Ch 13, Course Note 1	Quiz
6	Topic: Incorporating growth potential Activity: Lecture 6, Workshop Required student preparation: KGW Ch 7; Ch 27
7	Topic: Multiple-based valuations: Price/Earnings ratios Enterprise value Others: cash flow multiples, dividend yield, price/sales. Activity: Lecture 7, Workshop Required student preparation: KGW Ch 16, Course Note 2 (pp 1-6)	Assignment 1 due
8	Topic: Asset-based valuations: Price/Book Sum-of-the-Parts Takeover valuation Activity: Lecture 8, Workshop Required student preparation: Damodaran Ch 19; Ch 25, KGW Ch 17, Course Note 2 (pp 7-10)
9	Topic: Sensitivity and scenario analysis Activity: Lecture 9, Workshop Required student preparation: KGW Ch 15, Damodaran Ch 33,
10	Topic: Forming a recommendation Activity: Lecture 10, Workshop Required student preparation: KGW Ch 4; Ch 5
11	Topic: Special issues: Cross-border valuation Valuing high growth firms Evaluating management WACC as a value-driver Activity: Lecture 11, Workshop Required student preparation: KGW Ch 23; Ch 29; Ch 32, CFA Code of Ethics; Standard of Practice Handbook - Part V (pp 127-147)	Assignment 2 due
12	Topic: Review Activity: Lecture 12, Workshop

Tutorial Registration

Tutorial signup for this course will be done via Wattle. Detailed information about signup times will be provided on Wattle or during your first lecture. When tutorials are available for enrolment, follow these steps:

1.   Log on to Wattle, and go to the course site

2.   Click on the link “Tutorial enrolment”

3.   On the right of the screen, click on the tab “Become Member of…..” for the tutorial class you wish to enter

4.   Confirm your choice

If you need to change your enrolment, you will be able to do so by clicking on the tab “Leave group….” and then re-enrol in another group. You will not be able to enrol in groups that have reached their maximum number. Please note that enrolment in ISIS must be finalised for you to have access to Wattle.

Assessment Summary

Assessment task	Value	Due Date	Return of assessment	Learning Outcomes
Quiz - 15 mins duration	5 %	28/08/2020	31/08/2020	1
Assignment 1: Company model and DCF valuation	20 %	21/09/2020	05/10/2020	1-3
Assignment #2 The complete package: company model, DCF valuation, multiple and/or asset-based valuation and analyst report	25 %	23/10/2020	20/11/2020	1-3
Final Exam	50 %	05/11/2020	03/12/2020	1-3

* If the Due Date and Return of Assessment date are blank, see the Assessment Tab for specific Assessment Task details

Policies

ANU has educational policies, procedures and guidelines, which are designed to ensure that staff and students are aware of the University’s academic standards, and implement them. Students are expected to have read the Academic Misconduct Rule before the commencement of their course. Other key policies and guidelines include:

• Student Assessment (Coursework) Policy and Procedure
• Special Assessment Consideration Policy and General Information 
• Student Surveys and Evaluations
• Deferred Examinations
• Student Complaint Resolution Policy and Procedure

Assessment Requirements

The ANU is using Turnitin to enhance student citation and referencing techniques, and to assess assignment submissions as a component of the University's approach to managing Academic Integrity. For additional information regarding Turnitin please visit the Academic Integrity . In rare cases where online submission using Turnitin software is not technically possible; or where not using Turnitin software has been justified by the Course Convener and approved by the Associate Dean (Education) on the basis of the teaching model being employed; students shall submit assessment online via ‘Wattle’ outside of Turnitin, or failing that in hard copy, or through a combination of submission methods as approved by the Associate Dean (Education). The submission method is detailed below.

Moderation of Assessment

Marks that are allocated during Semester are to be considered provisional until formalised by the College examiners meeting at the end of each Semester. If appropriate, some moderation of marks might be applied prior to final results being released.

Assessment Task 1

Quiz - 15 mins duration

Date: 28 August 2020 (Online via Wattle)

Value or weighting: 5% (or 0% if the quiz is not attempted or redeemed)

This will be an online quiz conducted via Wattle, consisting of multiple choice questions only. The purpose of the quiz is to provide students with feedback on their understanding of the material. The questions will be of practical (numerical) and/or theory in nature and students will need to review and revise all material covered in lectures 1 to 4, inclusive, as well as the corresponding tutorial material. The quiz is optional and redeemable, and will be held during the scheduled Workshop time for Week 5. Results for the quiz will be available on Wattle, by Monday 31 August, 2020.

Assessment Task 2

Assignment 1: Company model and DCF valuation

Due Date: 21 September 2020

Value or weighting: 20%

Students are asked to sign up for an assignment group at Wattle by Wednesday Aug. 12th, Week 3. All groups must consist of 5 - 6 students. Any individuals not enrolled into a group and small groups of less than 5 members are to be allocated randomly by the lecturer by Friday Aug. 14th. Each group is expected to build a DCF valuation model (Assignment #1) and multiple-based (asset-based) valuations (Assignment #2) for a listed Australian company; and submit the complete valuation portfolio in week 12 with an analyst research report that includes valuation analysis and investment recommendations (Assignment #2) through Turnitin. Details on objectives, requirements, group formation, guidance and marking criteria will be outlined in the Assignment on wattle no less than 2 weeks before it is due.

The workshop commences from Week 2 with themed discussions on the assignment. The week 2 workshop introduces the “KGW model” template, and offers general advice on modelling in Microsoft Excel. From week 3, guidance will be given on how to conduct analysis for your company, including discussing methods and addressing any common problems or matters raised by students. At least one member from each team MUST attend, participate in the discussion and take notes, although all should attend with prepared questions. The workshop is used as the main forum seeking help for your assignment. The lecturer will NOT answer assignment related questions by email, unless it’s a fact-based question. A face-to-face conversation is a more effective way on this regard. You are welcome to talk to the lecturer in class, during lecture breaks or consultation time.

All questions regarding the lectures and the assignment should be directed to the lecturer. Important: before coming to the lecturer’s consultations, make sure you have reviewed all lecture/tutorial/workshop materials and recordings. If you ask an assignment question that has been discussed in workshops you will be asked to listen to the recordings. This policy is to improve the efficiency of using the lecturer’s time and give the students who do need face-to-face time with the lecturer a fair chance. The lecturer would very much appreciate your understanding and cooperation.

All questions regarding the tutorials should be directed to the tutors. All students must adhere to the required social distancing requirements,

Assessment Task 3

Assignment #2 The complete package: company model, DCF valuation, multiple and/or asset-based valuation and analyst report

Due Date: 23 October 2020

Value or weighting: 25% (or 30% if the quiz is not attempted or redeemed)

Students are asked to sign up for an assignment group at Wattle by Wednesday Aug. 12th, Week 3. All groups must consist of 5 - 6 students. Any individuals not enrolled into a group and small groups of less than 5 members are to be allocated randomly by the lecturer by Friday Aug. 14th. Each group is expected to build a DCF valuation model (Assignment #1) and multiple-based (asset-based) valuations (Assignment #2) for a listed Australian company; and submit the complete valuation portfolio in week 12 with an analyst research report that includes valuation analysis and investment recommendations (Assignment #2) through Turnitin. Details on objectives, requirements, group formation, guidance and marking criteria will be outlined in the Assignment on wattle no less than 2 weeks before it is due.

Assignment #2 completes the valuation analysis by undertaking some appropriately selected multiple- based and/or asset-based valuation techniques. Feedback for Assignment #1 are expected to be provided to students well before the submission of Assignment #2. Any errors or areas need improvement highlighted in the feedback are expected to be corrected or mitigated in the final submission of the valuation portfolio.

All questions regarding the tutorials should be directed to the tutors. All students must adhere to the required social distancing requirements,

Assessment Task 4

Final Exam

Due Date: to be centrally timetabled

Value or weighting: 50%

This is a closed book exam but students are allowed to bring one A4 sheet of paper with notes on both sides. A mixture of theoretical and practical (numerical) questions will be asked. Students will need to review all material (weeks 1-12) pertaining to the course. If the lecturer chooses to use Proctorio invigilation for the exam, students will be provided an opportunity to use practice site for Proctorio prior to exam. Students will be provided with further details regarding the exam in week 10.

Centrally scheduled examinations through Examinations, Graduations & Prizes will be timetabled prior to the examination period. Please check ANU Timetabling for further information. Further information about the examination will be provided in class and on Wattle closer to the time of the examination.

Academic Integrity

Academic integrity is a core part of the ANU culture as a community of scholars. At its heart, academic integrity is about behaving ethically, committing to honest and responsible scholarly practice and upholding these values with respect and fairness.

The ANU commits to assisting all members of our community to understand how to engage in academic work in ways that are consistent with, and actively support academic integrity. The ANU expects staff and students to be familiar with the academic integrity principle and Academic Misconduct Rule, uphold high standards of academic integrity and act ethically and honestly, to ensure the quality and value of the qualification that you will graduate with.

The Academic Misconduct Rule is in place to promote academic integrity and manage academic misconduct. Very minor breaches of the academic integrity principle may result in a reduction of marks of up to 10% of the total marks available for the assessment. The ANU offers a number of online and in person services to assist students with their assignments, examinations, and other learning activities. Visit the Academic Skills website for more information about academic integrity, your responsibilities and for assistance with your assignments, writing skills and study.

Online Submission

Assignments are submitted using Turnitin on the course Wattle site. You will be required to sign a declaration as part of the submission of your assignment. Hard copy or email submission are not acceptable. Only one submission is required from each group. Please keep a copy of the assignment for your records. Important: to correctly distribute assignment marks and the feedback files, each student must sign up for a Group on Wattle.

Hardcopy Submission

For some forms of assessment (hand written assignments, art works, laboratory notes, etc.) hard copy submission is appropriate when approved by the Associate Dean (Education). Hard copy submissions must utilise the Assignment Cover Sheet. Please keep a copy of tasks completed for your records.

Late Submission

Late submission of assessment tasks is not accepted. Late submission is not accepted for online quizzes and examinations.

Extension of the assignment is not usually considered by the lecturer as the assignment is done by a large group of students and to be completed from week 3 to week 12 progressively. Other group members are expected to complete the tasks even if one or more members were not able to due to any uncontrollable reasons. No extension or special consideration will be granted to small teams (less than 5 students due to unexpected drop out of some members).

Referencing Requirements

Accepted academic practice for referencing sources that you use in presentations can be found via the links on the Wattle site, under the file named “ANU and College Policies, Program Information, Student Support Services and Assessment”. Alternatively, you can seek help through the Students Learning Development website.

Returning Assignments

Feedback on the assignment will be returned via Wattle or email by the date as set out in the "Assessment" section.

Extensions and Penalties

Extensions and late submission of assessment pieces are covered by the Student Assessment (Coursework) Policy and Procedure. Extensions may be granted for assessment pieces that are not examinations or take-home examinations. If you need an extension, you must request an extension in writing on or before the due date. If you have documented and appropriate medical evidence that demonstrates you were not able to request an extension on or before the due date, you may be able to request it after the due date.

Resubmission of Assignments

No resubmission of assignment is accepted.

Privacy Notice

The ANU has made a number of third party, online, databases available for students to use. Use of each online database is conditional on student end users first agreeing to the database licensor’s terms of service and/or privacy policy. Students should read these carefully. In some cases student end users will be required to register an account with the database licensor and submit personal information, including their: first name; last name; ANU email address; and other information.
In cases where student end users are asked to submit ‘content’ to a database, such as an assignment or short answers, the database licensor may only use the student’s ‘content’ in accordance with the terms of service – including any (copyright) licence the student grants to the database licensor. Any personal information or content a student submits may be stored by the licensor, potentially offshore, and will be used to process the database service in accordance with the licensors terms of service and/or privacy policy.
If any student chooses not to agree to the database licensor’s terms of service or privacy policy, the student will not be able to access and use the database. In these circumstances students should contact their lecturer to enquire about alternative arrangements that are available.

Distribution of grades policy

Academic Quality Assurance Committee monitors the performance of students, including attrition, further study and employment rates and grade distribution, and College reports on quality assurance processes for assessment activities, including alignment with national and international disciplinary and interdisciplinary standards, as well as qualification type learning outcomes.

Since first semester 1994, ANU uses a grading scale for all courses. This grading scale is used by all academic areas of the University.

Support for students

The University offers students support through several different services. You may contact the services listed below directly or seek advice from your Course Convener, Student Administrators, or your College and Course representatives (if applicable).

• ANU Health, safety & wellbeing for medical services, counselling, mental health and spiritual support
• ANU Diversity and inclusion for students with a disability or ongoing or chronic illness
• ANU Dean of Students for confidential, impartial advice and help to resolve problems between students and the academic or administrative areas of the University
• ANU Academic Skills and Learning Centre supports you make your own decisions about how you learn and manage your workload.
• ANU Counselling Centre promotes, supports and enhances mental health and wellbeing within the University student community.
• ANUSA supports and represents undergraduate and ANU College students
• PARSA supports and represents postgraduate and research students