Learning outcomes

The purpose of this course is that students will become knowledgeable users of company valuation models, knowledgeable users and producers of company valuations reports, and to be able to successfully apply the acquired skills in the capital market community.

After successful completion of the course the student will be able to:

- value companies using several alternative fundamental valuation models.

- show that all the fundamental valuation models yields the same end-result.

- apply valuation models in such a manner that is consistent with underlying theoretical conjectures.

- make consistent forecasts of financial statements.

- critically scrutinise and evaluate others' forecasts of financial statements and others' valuation of firms.

- write equity research reports.

Content

The course is designed so that the major part of the work is performed as a term paper project in which the students make comprehensive fundamental valuations of companies.

In the process of performing their valuations of companies special evaluation problems arise and are discussed. Another important part of the valuation process is the making of forecasts. The forecasts are made based on historical time-series and cross-sectional financial analysis infused with strategic analysis.

Based on the forecasts, the companies' values are estimated using several different valuation models such as the dividend valuation model, the free cash flow valuation model, and the residual income valuation model. The students are required to show that the estimated value for each firm is independent of the valuation models.

A press release is issued at the end of the course. It is based on the results of the company valuation reports and makes sell and buy recommendations

Instruction

The course is taught in English. The in-class teaching consists of lectures, seminars, and tutoring.

Assessment

Grades will be given in accordance with the Swedish grading system and, for international students, the ECTS grading system. The following grades will be used: Pass with Distinction (VG corresponds to A or B), Pass (G corresponds to C, D or E), Fail (U corresponds to F).

The students will get one single grade, equivalent to 7.5 ECTS credits. To pass the course the students have to take active part in the seminars and successfully complete the term project. The student's grade depends on the participation in the seminars and on the term paper's grade.

In addition, any remaining assignments or supplements must be completed and handed in at least within two weeks after the end of the course otherwise the course (all assignments included) has to be redone the following semester, provided there is space in the course.

Attention Swedish students: Only completed courses can be recognised in your degree.