Seminar on Firm Valuation

Instructor

Dr. Nino Papiashvili

 

General description

The seminar on Firm Valuation is only for Bachelor students. There will be a maximum number of 21 participants. Students will form groups of two (or three in case of high demand). Students should provide their seminar preferences at this platform by January 29: 

https://www.uni-ulm.de/mawi/mawi-wiwi/forschung-und-lehre/lehrveranstaltungen/sommersemester-2017/seminar-zur-wettbewerbspolitik-bachelor/

To successfully pass the seminar you need to write a paper and give a presentation. Papers should be 15-25 pages long depending on the size of a group. For hints how to write a paper see our guidelines. You need to hand in a printed version and also a digital one (PDF). You will have to present around 45-60 minutes.

For each topic, you should provide a short literature survey (here you should consider more than your intro-paper(s)) and you will also have to work on a practical part in which you should get familiar with empirical analysis (accessing data over Datastream or Bloomberg, performing quantitative analyses). You will need to use a data analysis tool (e.g. Excel and other statistical software packages). 

Please contact the supervisor - Nino Papiashvili - to discuss the outline of your paper, your empirical part, and any questions that you may have 

Please note important dates below!

 

Language

The seminar language (seminar thesis, presentation, discussion etc.) is English.

 

Grading (per group)

- 50%: seminar thesis 

- 50%: presentation

 

 

Timetable

21.01.2017 - 29.01.2017 Submission of your seminar preferences via the online platform

30.01.2017 First round of seminar matching

06.02.2017 Second round of seminar matching 

by 28.04 - Students should meet the supervisor to discuss the outline of the paper

26.05 - Registration deadline

11.06 - Submission of the papers

16.06 - Presentations, from 12 - 4 p.m., O27/2201

 

 

Topics

1. You should apply most commonly used valuation methods (Dividend Discount, Discounted Cash Flow, Valuation Ratios/Multiples) to a representative sample of firms and discuss how accurately do they map into equity market value.
Students: Tassilo Föhr, Richard Schreple & Fatih Demir
Supervisor: Nino Papiashvili

Literature to get started:

Liu, J., Nissim, D., & Thomas, J. (2002). Equity valuation using multiples. Journal of Accounting Research, 40(1), 135-172.

Penman, S. H., & Sougiannis, T. (1998). A comparison of dividend, cash flow, and earnings approaches to equity valuation. Contemporary accounting research, 15(3), 343-383.

 

2. You should discuss whether accounting measures (revenues and earnings) are relevant for firm valuation. You should also take a representative sample of firms and evaluate how accounting measures compare to the traditional methods of valuation (like discounted cash flows). Please, follow Chandra & Ro (2008) for empirical setup.

Supervisor: Nino Papiashvili 

Literature to get started:

Chandra, U., & Ro, B. T. (2008). The role of revenue in firm valuation. Accounting Horizons, 22(2), 199-222.

 

3. You should review alternative valuation methods like Economic Value Added (EVA/CVA), apply it to a representative sample of firms and evaluate the "added value" (or lack of) of these measures to other commonly used ones. Please, take Parvaei & Farhadi (2013) as a reference for your own empirical work.

Literature to get started:

Stewart, B. (2009). EVA momentum: The one ratio that tells the whole story. Journal of Applied Corporate Finance, 21(2), 74-86.

Parvaei, A., & Farhadi, S. (2013). The ability of explaining and predicting of Economic Value Added (EVA) versus net income (NI), residual income (RI) & free cash flow (FCF) in Tehran stock exchange (TSE). International Journal of Economics and Finance, 5(2), 67.

 

4. The industry where firm functions may justify the use of one valuation method over another. You should identify a representative sample of firms from different industries and evaluate which of the common valuation methods produce more accurate results. You should start your empirical task by following Demirakos et al. (2004) in identifying relevant industries and corresponding valuation methods.
Students: Vera Lang & Florian Schumacher
Supervisor: Nino Papiashvili

Literature to get started:

Demirakos, E. G., Strong, N. C., & Walker, M. (2004). What valuation models do analysts use?. Accounting horizons, 18(4), 221-240.

 

5. You should identify a representative sample of firms and discuss and evaluate the relevance of cash holdings for firm value. You should follow Martínez-Sola et al. (2013) for more detailed empirical setup.
Students: Oguzhan Kayali, Lukas Schmid
Supervisor: Nino Papiashvili 

Literature to get started:

Martínez-Sola, C., García-Teruel, P. J., & Martínez-Solano, P. (2013). Corporate cash holding and firm value. Applied Economics, 45(2), 161-170.

 

6. You should take a representative sample of firms, discuss and evaluate the effect of Research and Development Expenditures (R&D) on firm value. You should follow Chambers et al. (2002) for more detailed empirical setup.
Students: Fabian Beuter, Mark Dorn
Supervisor: Nino Papiashvili

Literature to get started:

Chambers, D., Jennings, R. and Thompson, R. (2002), "Excess returns to R&D intensive firms", Review of Accounting Studies, Vol. 7, pp. 133‐58.

 

7. Tobin's Q has been frequently used in scientific literature as a proxy for firm value. You should overview the literature on the relevance of the measure. You should also take a representative sample of firms and test empirically if firms with better performance and/or valuations (e.g. based on the method of multiples) also exhibit higher Tobin's Q. Please, refer to Sauaia & Castro (2014) as a starting point.
Students: Benita Wagner & Jennifer Seinsch
Supervisor: Nino Papiashvili 

Literature to get started:

Sauaia, A. C. A., & Castro, F. H. F. (2014). Is Tobin's Q a Good Indicator of a Company's Performance?. Developments in Business Simulation and Experiential Learning, 29.