Attila Odabasi
AD 469 Valuation
2014-15_2
AD 469 Security Analysis
Boğaziçi University
Instructor:
Office:
Phone:
E-mail:
Web:
Meetings:
Office Hours:
Attila Odabaşı
IB 403;
212-359 6806
odabasi@boun.edu.tr
http://odabasi.boun.edu.tr
ThThTh 678;
Local: IB 201
Tuesday and Wednesday 14:00-15:00, or by appointment
Course Description:
Security Analysis exposes students to applied equity valuat ion techniques
employed by finance professionals.
Valuing a firm’s stock is a difficult task that requires a variety of
macroeconomic, industry, and company-specific forecasts. The valuation process is
rarely black and white. Two individuals may reach completely different conclusions
from the same information. While there is no such thing as a “good” or “bad”
assumption, some are clearly more supported than others.
You will not become an expert in one semester. Our primary goal for the course
is to cultivate a solid understanding of basic valuation techniques and develop an aptitude
for analyzing the primary drivers of a company’s value.
Course Objective:
You should leave the course with the knowledge of how to apply several
valuation models, and an ability to comprehend investment recommendations.
Required Material:
The lecture presentations will follow the material in the following book:
Aswath Damadoran, Investment Valuation: Tools and Techniques for Determining the
Value of Any Asset, 3nd Ed., 2012, John Wiley.
Damodaran’s web page: http://pages.stern.nyu.edu/~adamodar/
The syllabus, lecture notes, etc., will be posted on the course web page. You are
expected to visit the web page regularly: http://odabasi.boun.edu.tr.
Term Project:
The term project is basically about company valuation. Each student will
prepare a valuation report of one company from Borsa Istanbul (BIST). Your valuation
report for the company will include a section about the industry that the company
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Attila Odabasi
AD 469 Valuation
2014-15_2
operates in as well. The format for the valuation report will be discussed in class. A
hard copy of the report will be submitted to the instructor at the end of the term. The
suggested length for the report is 10-15 pages, excluding exhibits.
You will present your analyses and recommendations to the rest of the class at
the end of the semester.
Once you select a stock, you are expected to monitor that company and its
industry in the media, and should be prepared each week to report to the class (verbally)
any major development that might affect the company’s stock.
Grading Basis and Course Policies (Tentative):
Midterm:
Final Exam:
Term Project:
Class Participation and Attendance:
30%
30%
30%
10%
You are expected to attend class regularly and be an active team player in class.
Read any material assigned for the lectures in advance. Lecture slides will be made
available on the website but they can sometimes be posted after the class. Late
assignments will be punished with discounted grades. No make-up exam will be given
for the midterm unless there is a force-majeure. Then you should inform me
before the exam. NO early final exam will be given in any case.
Project Ethics:
With regard to ethical conduct, it is my sincere hope that no student in this class
submits a work which is not his or her own. If I determine that any assignment is not
written solely by the student whose name appears on the project, a grade of zero will
be assigned for the project. In all likelihood, receiving a “0” on the project will
result in an “F” for the course.
The project required for this course involves extensive economic,
industry, and company research. It is unlikely that one could write a quality
research report without extensively utilizing a vast array of research materials.
Therefore, students are free to use any available research source provided they
properly cite their sources in the research document. Ignorance of source citation
rules is no excuse for plagiarism. Students caught plagiarizing will be harshly
penalized.
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Attila Odabasi
AD 469 Valuation
2014-15_2
Course Outline (Tentative):
Topic
Week Topics
Introduction
1
DCF Valuation:
Estimating Parameters
2-5
DCF Valuation:
Valuation Examples
6
Relative Valuation
Valuing Private Firms
7-8
9-10
Value Enhancement Strategies
11
Review
12
Syllabus for class
Project Description
Introduction to Valuation
DCF Valuation:Estimating Parameters,
Estimating a risk free rate
Equity risk premiums
Country risk
Market risk – Beta
Earnings and cash flows
The process of converting
operating lease
commitments to debt
The process of converting
R&D expenses to capital
expenses
Growth rates
Terminal Value
Chapters in
Investment Val,
3/e.
1–2
7 – 12
DCF Valuation Valuation Examples:
DDM, FCFF, FCFE
models
Relative Valuation
Valuing Financial, Startup, Private Firms, etc.
13- 16, 21 – 23
Value Enhancement
Strategies
Review
31 – 32
17 – 20
21 - 24
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