Dr Pascal Frantz OLD 3.07 and Mr Jose Carabias Palmeiro OLD 2.13

This course is available on the MSc in Accounting and Finance, MSc in Accounting, Organisations and Institutions, MSc in Law and Accounting, MSc in Management and Regulation of Risk, MSc in Management and Strategy and MSc in Risk and Finance. This course is available with permission as an outside option to students on other programmes where regulations permit.

Other students may be admitted to the course if they have a reasonable knowledge of financial accounting or finance acquired at undergraduate or equivalent level, and only with the agreement, in writing, of the MSc (Accounting) Course Tutor.

It is advantageous for students to have knowledge of financial accounting and finance (asset pricing).

The aim of this course is to introduce students to security analysis and valuation from both theoretical and empirical perspectives. Students are furthermore provided with an opportunity to apply their skills by valuing, in small groups, from the point of view of a "sell-side analyst", a firm's equity of their choice using technologies based on the present values of free cash flows and economic value added. The course should appeal to students interested in investment analysis and fund management.

The course is presented in three parts. The first part, financial analysis, focuses on past and present performance evaluation, which is used by financial analysts to generate expectations about future performance (prospective analysis). The second part, security valuation, focuses on the determination of intrinsic security prices, which, in efficient markets, reflect prospective performance. The third part, returns to fundamental and technical analysis, provides empirical evidence on returns to trading strategies based on either financial analysis or past stock returns.

20 hours of lectures, 9 hours of seminars and 3 hours of workshops in the LT.

Students will present their corporate valuation projects during the LT workshops.

There will be a reading week in week 6 of LT.

Lectures are based on Beccalli E and  Frantz, P, Valuation and Securities Analysis, 2012. Other books recommended include Penman S, Financial Statement Analysis and Security Valuation, McGraw-Hill, 2012,  as well as Palepu K, Healy B &  Bernard V, Business Analysis and Valuation, South-Western College Publishing, 2012. For background reading for the corporate valuation project: Koller T, Goedhart M & Wessels D, Valuation: Measuring and Managing the Value of Companies, Wiley, 2010, The course also relies on journal articles published in the financial analysis and financial markets literatures.

Exam (70%, duration: 2 hours) in the main exam period.
Project (30%) in the lent term.