SECURITY ANALYSIS

& BUSINESS VALUATION

FIN306

Unit Guide

Trimester 2 2021
 FIN306 SECURITY ANALYSIS & BUSINESS VALUATION

TRIMESTER 2 2021

About Security Analysis & Business Valuation

(FIN306)
CONTACTS
Prof. Vo Hong Duc
Unit Controller &
[email protected]
Lecturer

Lecturer:
Dr. Nguyen Thi Kim
Case Studies
[email protected]
Couching
Ms. Vu Phuong Linh
Associate Lecturer
[email protected]
An Nguyen
Program 17 Pham Ngoc Thach Street, District 3, HCM City
Administrator
Phone: 08 54465555 (Ex: 124) Email: [email protected]

UNIT OVERVIEW
This unit analyses companies from a fundamental perspective in order to derive an intrinsic
value for securities. The focus is on the attempt by active investors to identify mispriced
securities using publicly available information, company reports and financial market
information. The analytical techniques of financial statement analysis (e.g. fundamental
analysis, free cash flow analysis and pro-forma analysis) and the issue of the “reliability” and
“quality” of publicly available information are discussed and explored. Those contemplating
careers in investment banking, financial consulting, trust funds, superannuation funds, hedge
funds, and brokerage firms will find this applied unit both useful and interesting.

PRE-REQUISITES

Corporate Finance
MAN-101

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Assessment Information

UNIT LEARNING OUTCOMES

The table below outlines the unit learning outcomes (ULOs) for this unit. Upon completion of
this unit, students will be able to:

1. Show an in-depth understanding of a practical problem in valuation

Choose and apply knowledge they have gained from different units to examine a particular
2.
problem in relation to valuation.

3. Select and evaluate practical solutions in valuation in light of industry or community needs.
Develop teamwork skills to achieve team goals and coproduce outcomes in a professional or
4.
enterprise context
Evaluate professional or enterprise practice in relation to culture and diversity in discipline-
5.
appropriate contexts (including first peoples/global) and make recommendations.

PROGRAM LEARNING OUTCOMES

In line with its focus on assuring students’ skills in unit learning outcomes 1-5 above, this unit is
also responsible for introducing/developing/assuring the following program-level learning
outcomes (PLOs):

Knowledge & Application

1. Solid understanding and competency of appropriate application of business discipline-specific
knowledge.
Communication
2. Competency in professional written and oral communication suited to multiple audiences and
contexts.
Teamwork
3.
Effective collaboration in teamwork or other tasks in organizational settings.
Critical thinking
4.
Critical thinking through appropriate observing, analyzing and reasoning.
Problem solving
5.
Effective and constructive problem solving.
Ethics
6. An ethical perspective, including an understanding of the ethical responsibilities of
organizations.
Cultural Diversity
A global mindset, including an understanding of the different business settings, the ability to
7.
identify foreign market potentials, to diagnose cross-cultural communication problems and
propose appropriate solutions.

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ASSESSMENT SUMMARY

Weights
Items Due Dates Learning Outcomes
(%)
Class attendance, participation and discussion LO1; LO2; LO3;
1. All lectures 10%
in each session (Individual) LO5
A report of company analysis and valuation
2. Session 12 30% LO1; LO2; LO4
(Group of 4-5 students) (3,000 words)
3. Video clips of a topic (Group) (5-8 minutes) Session 12 10% LO1-LO5
4. Final exam (Individual) (90 minutes) Session 14 50% LO1-LO4

Final marks and grades are subject to confirmation by the School Assessment Committees
which may scale, modify or otherwise amend the marks and grades for the unit, as may be
required by University policies.

 Note: To successfully complete this unit, students must:

▪ Achieve a minimum of 50 marks;
▪ Complete all assessment items. It is recommended that students complete all available
assessment elements in order to maximize marks. An automatic Fail Non — Submission
(FNS) grade will be awarded if any assessment task is not submitted/completed as per
the details specified;
▪ Attend 80 per cent of class time. See attendance requirements in the section of class
policies and rules below.

Assessment 1: Class attendance, participation & discussion

(Individual) (10%)
Due: Ongoing throughout the duration of the course
▪ In every class, students will be assigned to work in groups to read, solve exercises and
discuss a topic of case studies.
▪ Class attendance, participation and discussion includes coming to class prepared and
on time, taking part in class discussions, asking questions, contributing your knowledge
and insights in any form which is appropriate, and striving to make all your contributions
excellent.

Assessment 2: Project report (Group) (30%)

Due: The end of the week (Session 12). Submission is via the unit’s LMS site. The file can
be a Word or PDF document
▪ This assessment is a group work and relates to the analysis and valuation of a
Vietnamese firm at your choice. It is strongly recommended that you discuss the
selected firm with your lecturer(s) to ensure that you receive early feedbacks. Each

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report will be evaluated against the assessment matrix discussed in the consultation
period with the unit coordinator and against the tasks at hand, as well as against the
professional standards in place in the consulting and community sector respectively.
Marking criteria and standards

Criteria Details Marks

Executive summary (presentation of main technique(s)
Executive summary and used and findings)
5
introduction Introduction (overview of objectives, and outline of main
points)

Discussion of the methods for data collection, source of

Methodology and findings data, and techniques to analyse data and the findings 10
from the study

Discussion of the results and their significance, team

Discussion of results 10
recommendation to community partner

Content (justification, main findings, recommendations),

Results presentation 5
Slides and style (visual clarity, fluidity and coherence).

Assessment 3: Video clip of a topic (5-8 minutes) (10%)

Due: The end of the week (Session 12). Submission is via the unit’s LMS site. The group
can share the internet link to the video clip hosting.

Length: 5-8 minutes

▪ This assessment is group work and relates to the topic of analysis and valuation of a
Vietnamese firm. Each team is expected to design a 5-8 minutes video clip based on
the findings from their analysis and recommendations. The video clip will be evaluated
against the assessment rubric discussed in the consultation period with the unit
coordinator and against the tasks at hand, as well as against the professional standards
in place in the consulting and community sector respectively.
Marking criteria and standards
1-Needs
4-Excellent 3-Good 2-Fair
Criteria/Ratings improvement
(85-100) (70-84) (55-69)
(Below 55)
It covers all the topics in
It includes basic It includes essential The content includes
depth with details and
knowledge about the information, but it minor details and it
Content examples. The
topic. The content has 1-2 mistakes in has several mistakes
knowledge of the topic
seems to be good. the facts. in the facts.
is excellent.
The product uses
The product shows
The product shows ideas from other
certain originality. It He/ She uses ideas
great originality. The people (quoting
Originality shows the use of new from other people
ideas are creative and them) but there is
ideas and of without quoting them.
witty. little evidence of
shrewdness.
original ideas.

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There are not any Three or fewer More than four
Four spelling or
Use of language mistakes in spelling or spelling mistakes or spelling or grammar
grammar mistakes.
grammar. punctuation mistakes. mistakes.
Several (3-4) and One or two different
A lot of different shots,
different shots camera shots, camera
camera angles, sound
angles, sound effects angels, sound Little effort has been
Videography effects and an adequate
and/or and adequate effects and/or an made to provide
interest use of zooming
use of zooming adequate use of variety to the video.
providing variety in the
providing variety in the zooming providing
video.
video. variety in the video.
The quality of the
The overall quality of Most of the quality of The quality of the
Videography video is not very
the video and the focus the video and the video and the focus
clarity good, but the overall
were excellent. focus were excellent. are not very good.
focus was excellent.

Assessment 4: Final examination for advanced level

(Individual) (50%)
Due: Session 15
Length: 90 minutes
▪ This is a 90-minute examination and consists of multiple choices, exercises and short
answer questions.
▪ The exam is a 90-minute closed-book examination held during the formal examination
period. It is a written examination which may contain exercises and multiple parts. The
question will be designed to require students to show their understand for the topics from
the entire unit.
Marking criteria and standards
Marks will be awarded based on the correct answers. However, detailed working will attract a
lot of marks.

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 FIN301 INVESTMENT MANAGEMENT
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Teaching Activities
LEARNING RESOURCES
▪ Titman, S. and J. Martin (2014). Valuation – The Art and Science of Corporate
Investment Decision, 3rd Edition.
Textbook
▪ James M. Wahlen, Stephen P. Baginski, Mark Bradshaw (2014). Financial Reporting,
Financial Statement Analysis

ONLINE LEARNING RESOURCES

E-library http://search.proquest.com/login
Username: UEHCMC2010
Password: thuvien0810

E-learning http://elearning.isb.edu.vn/

SCHEDULE OF ACTIVITIES

Dr. Vo Hong Duc Ds. Nguyen Thi Kim & Ms. Linh Vu
SESSION (Lectures): (Tutoring & Case study coaching):
7 sessions 8 sessions
Linh (1 hours):
Recap learned knowledge for students (exercises & problems) + Quiz
Topic 1:
Introduction to Valuation and
Dr. Kim (2 hours):
Estimating a Firm’s Cost of Capital
Case study coaching.
Estimating Required Rates of Return
- Problem: Pearson Electronics - Projected WACC using Corporate
1&2 for Projects
Financing (Chap 5 –Valuation, Titman)
- Problem: Lampkin Manufacturing Company - Projected WACC using
Chapters 1; 4 and 5 from Titman and
Corporate Financing (Chap 5 –Valuation, Titman)
Martin (2014)
Chap 11 from Wahlen et al. (2014)
Exercises and problems from Titman and Martin.
Cases selected from Wahlen et al. (2014).

Linh (1 hours):
Recap learned knowledge for students (exercises & problems) + Quiz
Topic 2:
Dr. Kim (2 hours):
Relative Valuation using Market
Case study coaching.
Comparables &
3&4 Enterprise Valuation
- Mini-case: Valuing ConocoPhillips’ Acquisition of Burlington
Resources (Chap 8 –Valuation, Titman)
Chapters 8 & 9 from Titman and Martin
(2014)
Exercises and problems from Titman and Martin.
Cases selected from Wahlen et al. (2014).

Linh (1 hours):
Topic 3: Recap learned knowledge for students (exercises & problems) + Quiz
5&6 The Dividends Valuation Approach
Dr. Kim (2 hours):
Chap 11 from Wahlen et al. (2014) Case study coaching + Introduction to real estate valuation

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Dr. Vo Hong Duc Ds. Nguyen Thi Kim & Ms. Linh Vu
SESSION (Lectures): (Tutoring & Case study coaching):
7 sessions 8 sessions

- Case Study: Dividends-Based Valuation of Starbucks’ Common

Equity

Exercises and problems from Titman and Martin.

Cases selected from Wahlen et al. (2014).

Linh (1 hours):
Recap learned knowledge for students (exercises & problems) + Quiz

Dr. Kim (2 hours):

Topic 4:
Case study + Dr. Pham Anh Khoi sharing about Project overview &
Valuation:
necessary information provided.
Cash-Flow-based Approach
7&8
- Case Study: Free Cash Flows Valuation of Starbucks’ Common
Chap 12 from Wahlen et al. (2014)
Equity

Exercises and problems from Titman and Martin.

Cases selected from Wahlen et al. (2014).

Linh (1 hours):
Recap learned knowledge for students (exercises & problems) + Quiz

Dr. Kim (2 hours):

Topic 5:
Case study + Coach the real estate project
Valuation:
9 & 10 Earnings-based Approach
- Case Study: Residual Income Valuation of Starbucks’ Common
Equity
Chap 13 from Wahlen et al. (2014)
Exercises and problems from Titman and Martin.
Cases selected from Wahlen et al. (2014).

Linh (1 hours):
Recap learned knowledge for students (exercises & problems) + Quiz

Topic 6: Dr. Kim (2 hours):

Valuation: Case study + Coach the real estate project
Market-based Approaches
11 & 12
- Case Study: Valuation of Starbucks’ Common Equity Using Market
Chap 14 from Wahlen et al. (2014) Multiples

Exercises and problems from Titman and Martin.

Cases selected from Wahlen et al. (2014).

Linh (1 hours):
Recap learned knowledge for students (exercises & problems) + Quiz

Dr. Kim (2 hours):

Topic 7: Case study + Coach the real estate project
Valuation in a Private Equity Setting
13 & 14 - Problem: VC Valuation and Deal Structuring (Chap 10 –Valuation,
Chapter 10 from Titman and Martin Titman)
(2014) - Problem: LBO Valuation (Chap 10 –Valuation, Titman)

Exercises and problems from Titman and Martin.

Cases selected from Wahlen et al. (2014).

Final Revision & Final Report submission

15

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Tutorials
Tutorials following the lecture in each session provide students the opportunity to apply and
share knowledge by doing a variety of in-class activities individually or in group such as
exercises, discussion, and presentation. These activities focus on demonstrating your skills
and help you build your ability to achieve the learning outcomes for this unit.

Tutorial questions/exercises will be provided in class. You will be expected to have completed
specific reading and exercises from the textbook and other required materials prior to
attending each lecture and tutorial class. If you have not prepared adequately, you will not
get the full benefit from this learning opportunity.

General Information & Policy

Referencing
Plagiarism
Student assignments are to contain original content created by the students. Assignments
will be rejected if they include plagiarized content or contain excessive amounts of
quoted/cited material and minimal original content. Students will receive a grade of ZERO
(0%) for any assignments rejected for this reason. Written assignments WILL BE checked
by the lecturer with Turnitin.com, an online plagiarism-checking tool.
Sources
Furthermore, your reference to support your statements must be from a reliable source, such
as textbooks, additional reading materials, and reference books. However, many websites
are not reliable sources. Examples are Wikipedia.org, about.com, and ask.com. If you are
not sure if a reference is acceptable or not, please contact the lecturer.
Referencing & Citation
The Publication Manual of the American Psychological Association (APA) 6th ed., will
serve as the primary reference materials for all students. Therefore, all papers must be
submitted in APA format. The mechanics of student papers and work will be evaluated, as
well as the content.

Submission
Assignment cover sheet
▪ All assignments are required to be submitted with an Assignment Cover Sheet.
▪ Group assignments are to be submitted with a Group Assignment Cover Sheet as well
as a Peer Evaluation Form depending on the request of unit instructor.
Non-contributing team members can sometimes be an issue with group-work structured
assessment. Individual student group work scores may be adjusted as a result of peer

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dissatisfaction with a particular student’s contribution to group work assignments, as reflected

in submissions of the evaluation form.
Note:
▪ Assignment cover sheets and the evaluation form can be located on MyISB system
▪ Students are advised to keep a copy of all assignments submitted for marking.

Submission style
Assignments are expected to achieve a professional standard:
▪ Be typed, one and a half spaced, on A4 paper
▪ Use a simple clear format, suitable for a report to senior management in a commercial
organization.

Submission method
Soft copy: submitted electronically via E-learning system by 11:55 PM on the due date
(Suggested title: Student name_Unitname_Name of Assignment).
Hard copy: submitted to ISB Submission Box at the Reception Area (17 Pham Ngoc Thach)
by the due date.

Late assignment and make-up policy

No late assignments will be accepted unless prior authorization granted by the Academic
Department based on a Special Consideration Application for assessment task extension.
Students must complete all assessments on the assigned dates including quizzes, mid-term
test, and final exam. If there are extenuating or unforeseen circumstances, students must
follow the school’s policies and procedures accordingly.

Attendance
Students are required to attend a minimum of 80% of all classes (which normally 12/15
sessions).
Other cases equating to an absence:
▪ Arriving to class late by 15 minutes at the beginning,
▪ Arriving late by 5 minutes after the break
▪ Leaving prior to the scheduled end time without the permission of the lecturer
If you are unable to attend any session, please let your lecturer know AND submit a request
for absence form to program administrator prior to the session.

 IMPORTANT: Students will not be allowed to sit in the final examination if violating the
above absence rule.

Electronic device use

▪ Cell phones will be turned off or switched to vibrate mode before class starts.
▪ No phone calls or text messaging are allowed inside classroom during class time.

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▪ Portable listening and/or music devices may not be operated in the classroom.
▪ Headphones and/or ear buds of any type may not be worn while in the classroom
whether operating or not.
▪ Laptop and other electronic devices are not permitted unless specifically
authorized by the lecturer exclusively for note taking and doing class work.

 IMPORTANT: If you are in violation of these policies you will be excused from class and
an absence will be assessed.

Email etiquette
Your lecturers receive many emails each day. In order to enable them to respond to your
emails appropriately and in a timely fashion, students are asked to follow basic requirements
of professional communication.
Your emails should:
▪ Have a concise and descriptive title, including the class and name of the unit you are
enquiring about
▪ Be clear about the intention of their emails
▪ Use appropriate tone and language, proof-read what is written in the email before
sending it.
Students should also allow 3-4 working days for a response before following up. If the matter
is legitimately urgent, you may indicate “URGENT” in the email subject header.
Make an appointment: If your email request is complex and requires a lengthy response it
may be probably best to make an appointment with your lecturer/instructor to meet in person.

Student behaviour guidelines

Everyone must behave professionally. Students are expected to demonstrate respect for
teacher and fellow students at all times. Behaviour that is disruptive to a positive learning
environment reported to the teacher will result in a warning on the first instance; the second
instance might result in a failing grade along with expulsion from the school.
Unacceptable behaviors can be:
▪ Cheating on an exam
▪ Collaborating with others on work to be presented, if contrary to the stated rules of
the course
▪ Submitting, if contrary to the rules of the course, work previously submitted in another
course
▪ Knowingly and intentionally assisting another student in any of the above actions,
including assistance in an arrangement whereby work, classroom performance,
examination, or other activity is submitted or performed by a person other than the
student under whose name the work is submitted or performed
▪ Plagiarising

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 IMPORTANT:
▪ First violation will result in a grade ZERO (0%) for that assignment.
▪ Second violation will result in a failing course grade.

Disability support services

Students with disabilities are advised that accommodations and services are available at
UEH-ISB. It is the student's responsibility to contact UEH-ISB office and submit appropriate
documentation prior to receiving such services.

Additional information
This unit guide may be revised at the discretion of the Academic Department with approval
from Program Academic Director and School Academic Committee where appropriate

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