FIN205 Business Valuation

This subject provides students with a working knowledge of the issues involved in the valuation of a business and its equity. Fundamental to any valuation is an understanding of the activities of the business and the reasons for undertaking the valuation. These issues are explored before the various valuation methodologies are outlined and demonstrated. The technical and practical issues involved in valuation are discussed as are the limitations of the various methodologies. However, purely looking at the numbers calculated is not enough and this subject provides an appreciation of the qualitative issues that may affect a valuation.

This is a compulsory subject for the corporate finance major.

For more information, please refer to the subject outline.

  • Learning outcomes
    • At the completion of this subject students should be able to:

      1. Evaluate the qualitative factors that impact a business and its industry.
      2. Apply earnings capitalisation multiples and other common valuation methodologies to value businesses and securities.
      3. Analyse the results of a valuation of a business or equity securities.
      4. Evaluate advanced business valuation issues such as tax implications, real options and intangibles.
      5. Assess the valuation of businesses based on level of control and tradeability.
      6. Assess the use of value-based techniques in valuing a business.
  • Subject content
    • Topic Title
      Topic 1 Introduction to business valuation
      Topic 2 DCF: issues in valuation
      Topic 3 Earnings capitalisation and other valuation methods
      Topic 4 Accounting and taxation issues
      Topic 5 Valuing portfolio and controlling interests
      Topic 6 Real options
      Topic 7 Valuation of intangible assets
      Topic 8 Valuation of small private companies
      Topic 9 Value-based analysis

  • Assessment
  • Prerequisites
    • Students enrolling in this subject are assumed to have the prerequisite knowledge in the three core subjects (FIN101, FIN102, and FIN103).

      Kaplan Professional recommends that you complete FIN202 Fundamentals of Asset Valuation subject or have an understanding of fundamental valuation concepts such as the time value of money, cost of capital and discounted cash flow (DCF) valuations prior to enrolling in this unit.

  • Course transition subject equivalence
    • Students are not required to complete this subject if they have transitioned from a SIA/Finsia/Kaplan Professional course and have completed the following subjects within the course completion timeframe:

      • FIN224 Applied Valuation
      • E102 Applied Valuation
  • Reading list
    • There are no prescribed texts for this subject.

      Details of any required and further readings for this subject are provided in the subject room.  Purchase of any text other than a prescribed text is not required.