This course introduces students to different financial markets and their role in the economy and offers an exploration of current developments in the world’s financial markets and institutions, including innovation, globalization, with a focus on the actual practices of financial institutions, investors, and financial instruments. The course also explores alternative investments techniques available in the global financial markets including the underlying rationale for such investment types as well as providing an understanding of the construction and management of relevant strategies. The course will provide students a general grounding in the stock valuation and real estate valuation (focus on commercial and residential property, and on Cambodia real estate market) approaches such as discounted cash flow models, market multiple models as well as valuation of a private company. The course emphasizes practical and realworld applications of valuation methodologies and is targeted towards students interested in careers in corporate finance, investment banking, security analysis, consulting, and private equity. The course will also introduce students to the CFA Institute Code of Ethics and Standards of Professional Conduct and learn to describe the sustainability landscape and analyze sustainable technologies, strategies, and business models from the perspective of managers, entrepreneurs, and investors.
The course teaches the students to be able to pull apart the financial statements to get at the relevant information for valuation; to identify “red flags” that indicate an impending liquidity crisis; to see clearly how industry fundamentals and competitive forces directly affect financial results and, in the process, drive stock valuation; to determine the valuation for any public or private company whether for purchase or sale, investment of a minority interest, going public in an IPO, or restructuring; to assess whether a company is creating value for its shareholders; learning to evaluate real estate investment opportunities; Identify the core drivers of market value and market performance in the property market; to evaluate the reports of business valuation experts and to be able to ask the “right” questions of these experts.
Students will understand what determines the value of a firm and a real estate asset and how to estimate that value is a prerequisite for making rational business decisions.
Credit: 5
Lecture Hours: 75
SelfStudy Hours:
Total Study Hours: 225
Prerequisites
Students must have completed Finance 1 before attempting this course.
Upon successful completion of this course students should be able to:
1 Knowledge
Level of Learning  PLO  CLO  Learning Outcome 

Understand  PC1  CK1  Explain the fundamental principles of investment, with a focus on financial markets and institutions, alternative investments techniques available in the global financial markets and formulation of relevant strategies given the investor’s objective. 
Understand  PC1  CK2  Explain the appropriate techniques for valuation and management of equity investments (for a listed and private company) and real estate investment and considerations that may impact the assets value. 
Understand  PIP2  CK3  Explain the CFA Code of Ethics and Standards of Conduct and the overview of common impact investment strategies across asset classes, including venture capital, private credit, public equities, and real assets. 
2 Cognitive Skills
Level of Learning  PLO  CLO  Learning Outcome 

Evaluate  PC1  CC1  Evaluate the different approaches to estimating equity investment risk and return and cost of capital from a company’s perspective. 
Create  PC1  CC2  Apply different models for stock valuation of a listed company and a private company in the context of realworld evidence. 
Evaluate  PC1  CC3  Evaluate different models for real estate valuation of a commercial and residential property considering issues that impact on the valuation. 
3 Communication, Information Technology, and Numerical Skills
Level of Learning  PLO  CLO  Learning Outcome 

Apply  PCIT2  CCIT1  Use Microsoft Excel software and other packages useful for forecasting and analysing financial information. 
4 Interpersonal Skills and Responsibilities
Level of Learning  PLO  CLO  Learning Outcome 

Create  PIP2  CIP1  Develop teamwork skills 
Remember  PIP3  CIP2  Behave ethically as a finance analyst in accordance with the CFA Code of Ethics 
The course targets the study plan below but its implementation may vary somewhat depending on the progress and needs of students. Some topics may be allocated more or less than 1.5 hours.
No  Lesson Learning Outcomes  Teaching and Learning Activities, Assessment 

1 
Introduction to the Investment Setting

Lecture Reading: 
2 
Portfolio Risk and Return

Lecture Reading: 
3 
Introduction to the Investment Setting

Lecture Reading: 
4 
Introduction to the Investment Setting

Lecture Reading: 
5 
Introduction to Alternative Investments

Lecture Discussion Reading: CFA Material, Introduction to Alternative Investments (p. 574) 
6 
Introduction to Alternative Investments

Lecture Discussion Reading: CFA Material, Introduction to Alternative Investments (p. 574) 
7 
Investment risk and return

Lecture Reading: 
8 
Investment risk and return

Lecture Reading: 
9 
Investment risk and return

Lecture Reading: 
10 
Investment risk and return

Lecture Reading: 
11 
Investment risk and return

Lecture Reading: 
12 
Introduction to Valuation

Lecture Khan Academy: Interest & Debt (Videos 58) 
13 
Introduction to Valuation

Lecture Discussion Reading: CFA Material, Intro to Valuation: S.2.1 (p.24); S.2.2 (p.56) Khan Academy: Interest & Debt (Videos 58) 
14 
Discounted Dividend Valuation

Lecture Discussion Reading: CFA Material, DD Valuation: S.3 (p.1013); S.4.1 (p.1416); S.5.15.3 (p.2935); S.6.16.2 (p.4448) Khan Academy: Stocks and bonds (Videos 12, 712) 
15 
Discounted Dividend Valuation

Lecture Khan Academy: Stocks and bonds (Videos 12, 712) 
16 
Discounted Dividend Valuation

Lecture Khan Academy: Stocks and bonds (Videos 12, 712) 
17 
Free Cash Flow Valuation

Lecture Discussion Reading: CFA Material, FCF Valuation: S.2.2.12.3.2 (p.46); S.3.1 (p.7); S.3.2 (p.1011); S.3.4 (p.1819); S.4.3 (p.3940); S.5 (p.47) Khan Academy: Stocks and bonds (Videos 1617) 
18 
Free Cash Flow Valuation

Lecture Khan Academy: Stocks and bonds (Videos 1617) 
19 
Free Cash Flow Valuation

Lecture Khan Academy: Stocks and bonds (Videos 1617) 
20 
Multiples Valuation

Lecture Discussion Reading: CFA Material, Multiples Valuation: S.2.1 (p.34); S.3.1 (p.67); S.3.2 (p.3738); S.3.4 (p.5253); S.4.1 (p.6061); S.4.3 (p.67) 
21 
Multiples Valuation

Lecture Discussion Reading: CFA Material, Multiples Valuation: S.2.1 (p.34); S.3.1 (p.67); S.3.2 (p.3738); S.3.4 (p.5253); S.4.1 (p.6061); S.4.3 (p.67) 
22 
Multiples Valuation

Lecture Discussion Reading: CFA Material, Multiples Valuation: S.2.1 (p.34); S.3.1 (p.67); S.3.2 (p.3738); S.3.4 (p.5253); S.4.1 (p.6061); S.4.3 (p.67) 
23 
Valuing private company

Lecture Khan Academy: Stocks and bonds (Videos 1617) 
24 
Valuing private company

Lecture Khan Academy: Stocks and bonds (Videos 1617) 
25 
Valuing private company

Lecture Khan Academy: Stocks and bonds (Videos 1617) 
26 
IPO Valuation

Lecture Khan Academy: Stocks and bonds (Videos 1617) 
27 
IPO Valuation

Lecture Khan Academy: Stocks and bonds (Videos 1617) 
28 
Real Estate Valuation

Lecture Discussion Reading: CFA Material, Private Real Estate Investments (p. 544) 
29 
Real Estate Valuation

Lecture Discussion Reading: CFA Material, Private Real Estate Investments (p. 544) 
30 
Real Estate Valuation

Lecture Discussion Reading: CFA Material, Private Real Estate Investments (p. 544) 
31 
Team Exercise: Multiples Valuation

Brief lecture Examples of multiples valuation Minipresentation and discussion 
32 
Team Exercise: Multiples Valuation

Brief lecture Examples of multiples valuation Minipresentation and discussion 
33 
Team Exercise: Multiples Valuation

Brief lecture Examples of multiples valuation Minipresentation and discussion 
34 
Team Exercise: Forecasting Performance

Brief lecture Examples of performance forecasting Minipresentation and discussion 
35 
Team Exercise: Forecasting Performance

Brief lecture Examples of performance forecasting Minipresentation and discussion 
36 
Team Exercise: Forecasting Performance

Brief lecture Examples of multiples valuation Minipresentation and discussion 
37 
Team Exercise: Estimating WACC

Brief lecture Examples of WACC estimation Minipresentation and discussion 
38 
Team Exercise: Estimating WACC

Brief lecture Examples of WACC estimation Minipresentation and discussion 
39 
Team Exercise: Estimating WACC

Brief lecture Examples of WACC estimation Minipresentation and discussion 
40 
Team Exercise: Calculating FCFF and MVE

Brief lecture Examples of FCFF and MVE calculation Minipresentation and discussion 
41 
Team Exercise: Calculating FCFF and MVE

Brief lecture Examples of FCFF and MVE calculation Minipresentation and discussion 
42 
Team Exercise: Calculating FCFF and MVE

Brief lecture Examples of FCFF and MVE calculation Minipresentation and discussion 
43 
Team Exercise: Sensitivity Analysis

Brief lecture Examples of sensitivity analysis Minipresentation and discussion 
44 
Team Exercise: Sensitivity Analysis

Brief lecture Examples of sensitivity analysis Minipresentation and discussion 
45  Team Presentations – Complete Report (CK2, CC2, CCIT1, CIP1)  Team presentations and feedback 
46  Team Presentations – Complete Report (CK2, CC2, CCIT1, CIP1)  Team presentations and feedback 
47  Team Presentations – Complete Report (CK2, CC2, CCIT1, CIP1)  Team presentations and feedback 
48  Team Presentations – Complete Report (CK2, CC2, CCIT1, CIP1)  Team presentations and feedback 
49 
CFA Code of Ethics

Lecture
Reading: 
50 
Global Investment Performance Standards (GIPS)

Lecture Reading: 
The course will be delivered as a mix of lectures, class discussion, practice assignments and cases. Some of the questions on the midterm and final exams will be based on reallife financial statements of wellknown companies.
Class participation grade will be based both on attendance and constructive participation. You are expected to participate in class discussions and you will be graded on your contribution to the classroom learning environment. You should expect to be “cold called” to discuss assigned review problems and to offer views on the assigned material.
Grades will be determined based on a grading score, calculated using the following assessments and score allocations:
Assessment  Weight of each assessment  Learning Outcome Assessed  

CLO  PLO  
Attendance & Participation  5%  All CK, CC1, CCIT1, CIP  PCIT1, PCIT 2 
Inclass tests  10%  All CK, CC1, CCIT1, CIP1  PCIT1, PCIT 2 
Homework  10%  CK1, CK2, CK3, CC1  PCIT1, PK2, PC1 
Assignments (Stock Valuation)  30%  CK1, CK2, CK3, CIP1  PCIT1, PCIT 2 
Midterm exam  15%  CK1, CK2, CK3, CC1,CC3  PCIT1, PCIT 2 
Final exam  30%  CK1, CK2, CK3, CC1,CC3, CIP1  PCIT1, PCIT 2 
Total grading score  100% 
During the term there is one assignment.
Business Valuation Assignment
Work Group:  Group 
Output format:  Professional Valuation Report Format, Presentation 
Language:  English 
Assignment:  Each team (team of 34 students) must prepare a written research report on the subject company (The subject company can be ABC, PWSA, PPAP, PAS, GTI, PPSEZ, PEPC or NagaCorp) chosen by the team, which involves an analysis of the ordinary shares of a publicly listed company. Each team will be required to value the equity of the chosen company. Each student will be tested on their analytical, valuation, report writing, and presentation skills. 
or Real estate valuation assignment
This assignment requires each team to value a property in Cambodia. A detailed analysis of the local real estate market condition is the starting point. In addition, you need to predict the future cash flow generated from the asset and use the discount cash flow model to value the property. The quality of the report, the quality of the analysis, and the logical reasoning in developing the analysis are the key factors for the assessment.
Textbook
References
Note: A financial calculator capable of performing operations with amortizing payments and uneven cash flows (e.g., Texas Instruments BA II Pus, Hewlett Packard 12C, etc.). You could use an app on your smartphone but it will not be allowed during exams.
Please bring your calculator to each class.