Postgraduate Course: Equity Valuation (CMSE11664)
Course Outline
| School | Business School |
College | College of Arts, Humanities and Social Sciences |
| Credit level (Normal year taken) | SCQF Level 11 (Postgraduate) |
Availability | Available to all students |
| SCQF Credits | 20 |
ECTS Credits | 10 |
| Summary | The course aims to prepare students to analyse the financial performance of firms, to assess their prospects and to estimate their valuation. The course is structured primarily from the point of view of investors and analysts, rather than from a company perspective. |
| Course description |
The course will prepare participants to analyse the financial performance of corporations from around the world, and to show the links between accounting statements, valuation methods and investment analysis. Participants will be comfortable reading financial statements, calculating and understanding accounting ratios, extracting accounting information to make forecasts and valuations. Participants will also gain an understanding of the limitations of financial statements and methods for evaluating the quality of these statements.
Outline content
The primary valuation approaches discussed in this course are intrinsic valuation and relative valuation. The course develops student understanding of models to analyse corporate risk and the link with the cost of capital. The course also looks at how we use financial statement disclosures to forecast firm and equity cash flows. This forecasting requires us to think about financial statement adjustment (e.g. the capitalisation of operating leases and R&D expenditure). We also analyse how both industry and lifecycle considerations are important valuation components. We look at key valuation multiples and critically assess evaluate the power of multiple style valuation.
Student learning experience
Learning will be through developing an intellectual understanding of value creation and the practical skills required to evaluate that. Students will be required to study theoretical models and evidence. The course will try to develop students' interest in the subject and accustom them to monitoring current developments in order to facilitate continued learning after the course.
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Information for Visiting Students
| Pre-requisites | None |
| High Demand Course? |
Yes |
Course Delivery Information
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| Academic year 2025/26, Available to all students (SV1)
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Quota: None |
| Course Start |
Block 5 (Sem 2) and beyond |
Timetable |
Timetable |
| Learning and Teaching activities (Further Info) |
Total Hours:
200
(
Lecture Hours 16,
Seminar/Tutorial Hours 8,
Programme Level Learning and Teaching Hours 4,
Directed Learning and Independent Learning Hours
172 )
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| Assessment (Further Info) |
Written Exam
0 %,
Coursework
100 %,
Practical Exam
0 %
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| Additional Information (Assessment) |
100% Coursework (Individual) - 4,000 words - Assesses all course Learning Outcomes |
| Feedback |
Formative: There will be 8 hours of tutorials during the course. Students will be asked to prepare a problem set in advance of each tutorial. Each problem set focusses on a particular aspect of valuation practice and combines both conceptual and computational aspects of valuation. In the tutorial we discuss the problems set and feedback on the approaches followed by students to answer the questions. This feedback helps students refine the skill set necessary to complete the final assessment for the course ¿ an individual company valuation. In the tutorial setting feedback will be provided, both from group discussion and directly from the instructor.
Summative: Detailed feedback on each individual valuation report will be provided to students at the end of the course. |
| No Exam Information |
Learning Outcomes
On completion of this course, the student will be able to:
- Understand and critically discuss concepts of: corporate risk estimation; earnings quality assessment; financial statement adjustment and cash flow forecasting.
- Understand and apply skills in practical financial analysis to: value companies both using intrinsic and multiple based valuation approaches; critically assess the sensitivity of valuations to input parameters.
- Understand and apply financial analysis to advanced topics relating to capital restructuring; corporate governance and dilutive securities in the capital structure.
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Reading List
Investment Valuation (3rd Edition) by Aswath Damodaran
ISBN 978-1118130735 |
Additional Information
| Graduate Attributes and Skills |
Communication, ICT, and Numeracy Skills
After completing this course, students should be able to:
Convey meaning and message through a wide range of communication tools, including digital technology and social media; to understand how to use these tools to communicate in ways that sustain positive and responsible relationships.
Knowledge and Understanding
After completing this course, students should be able to:
Demonstrate a thorough knowledge and understanding of contemporary organisational disciplines; comprehend the role of business within the contemporary world; and critically evaluate and synthesise primary and secondary research and sources of evidence in order to make, and present, well informed and transparent organisation-related decisions, which have a positive global impact.
Identify, define and analyse theoretical and applied business and management problems, and develop approaches, informed by an understanding of appropriate quantitative and/or qualitative techniques, to explore and solve them responsibly. |
| Keywords | Equity,Stock,Share,Risk,Corporate,Valuation |
Contacts
| Course organiser | Dr Ronan Gallagher
Tel: (0131 6)50 8075
Email: Ronan.Gallagher@ed.ac.uk |
Course secretary | |
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