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AF315 Applied Valuation and Securities Analysis

Session: Two

Prerequisites: Introductory accounting (including basic financial analysis) and finance.

Dr Pascal Frantz
Dr Vasiliki Athanasakou

This applied equity research course adopts a case-study approach to value stocks and companies using financial statements. Special attention will be dedicated to initial public offerings (IPO) and mergers and acquisitions (M&A). It introduces fundamental analysis and provides empirical evidence on returns to investment strategies based on stocks’ fundamentals.

The focus of this course is very much applied. It is led by case-studies. Students are invited to work in small groups and value stocks using valuation software. The course includes a valuation-based M&A game in which students working in small groups are competing to take over some target firm. Students also get the opportunity to enter a “stock picking” tournament. This course would complement AF215: Business Analysis and Valuation, though the latter course is not a prerequisite.

Topics covered in this course include the following ones:

  • Applied valuation with special emphasis on key events such as initial public offerings and mergers and acquisitions:
    • Performance analysis, accounting quality, and implications for valuation;
    • Valuation methods;
    • Valuation and accounting strategies.
  • Implications of valuation for price multiples in efficient markets.
  • Fundamental analysis:
    • Accounting, financial statement analysis, and trading strategies;
    • Empirical returns to investment strategies based on:
      • price multiples;
      • the quality of accounting;
      • financial statement analysis.

This course should hence appeal to students interested in equity research, asset management, corporate finance and strategy consulting.


Text

Valuation and Security Analysis, by Beccalli and Frantz, Palgrave Macmillan (forthcoming, 2014).

This course relies on case-studies and financial data.

Lectures : 36 hours    Classes: 12 hours
Assessment: Final written examination and project work

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