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  3. Essentials of Corporate Valuation

Essentials of Corporate Valuation (FNCE30011)

Undergraduate level 3Points: 12.5On Campus (Parkville)

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Overview

Year of offer2019
Subject levelUndergraduate Level 3
Subject codeFNCE30011
Campus
Parkville
Availability
Semester 2
FeesSubject EFTSL, Level, Discipline & Census Date

This subject examines the key concepts and methodologies used in the valuation of corporations and other business interests including stand‐alone projects, joint ventures and private equity. Topics include: cashflow‐based approaches, multiples‐based approaches, forecasting cashflows and earnings, estimating discount rates, adjustments for leverage, adjustments for imputation, the valuation of franking credits, adjustments for flexibility, valuation by replication, valuation in the digital economy. There will be an extensive use of real‐world examples and cases throughout the course.

Intended learning outcomes

  • Identify and explain the role of valuation in the economy
  • Understand and apply cashflow-based valuation methods
  • Understand and apply multiples-based valuation methods
  • Analyse and interpret discount rates and earnings multiples
  • Demonstrate and explain how to properly account for leverage and flexibility
  • Examine the impact of imputation on alternative valuation methods
  • Apply the principle of replication to value complex financial securities
  • Critically evaluate the use of alternative valuation methods in the digital economy

Generic skills

  • High level of development: written communication; problem solving; application of theory to practice; critical thinking; interpretation and analysis; evaluation of data and other information
  • Moderate level of development: collaborative learning; statistical reasoning and analysis; synthesis of data and other information; use of computer software; accessing data and other information from a range of sources

Last updated: 3 April 2019