FIN 4320 - Financial Valuation

Credits: 4

This course focuses on how financial assets and firms are valued in financial markets. The course serves as background for other finance elective courses and builds skills in key valuation principles such as firm valuation. Students emphasize the economic underpinning and application of valuation techniques. The goal of this course is to help the student’s ability to use financial statement information and related disclosures to evaluate the underlying economics of a corporation. Course participants examine the company’s past and current performance, and its competitive environment by collecting, analyzing, and interpreting data from the firm’s using financial database. Students develop a financial model of the firm, in the form of pro forma financial statements, in order to forecast the firms’ future performance. These projections in turn become the inputs to the valuation techniques, which include discounted cash flow models, residual income (or abnormal earnings) models, and market multiple (or relative valuation) methods. The course emphasizes the discounted cash flow method of valuation and we use this approach to estimate the intrinsic value of the firm.
Prerequisite(s): FIN 3315