Common-stock valuation

Common-stock valuation

Bachelor of Business Studies (BBS) — Second Year

Subject: Fundamentals of Financial Management (MGT 215)

Unit 5: Financial Assets Valuation

Academic Year: 2083/84

Topic Objectives

After studying this topic, students should be able to:

• Explain the scope and key elements of common-stock valuation.
• Apply the relevant financial model, calculation or analytical approach and explain its assumptions and decision implications.

Curriculum Scope

• Dividend-discount model
• Zero growth
• Normal growth
• Supernormal growth
• Single-period and multi-period valuation

Detailed Microsyllabus

1. Dividend-discount models

   1. Zero-growth and constant-growth stock values.
   2. Required return and sustainable growth assumptions.
   3. Conditions for using the constant-growth relationship.

2. Multiple periods

   1. Supernormal growth followed by an assumed stable phase.
   2. Single-period and multi-period valuation.
   3. Discount dividends and a consistently calculated terminal value.

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Curriculum reference: Tribhuvan University, Faculty of Management, revised four-year BBS curriculum, PDF pages 41-43.

Source note: The curriculum scope above is retained from the existing TU syllabus breakdown. The numbered study subtopics are editorial elaborations for teaching and study, rather than a separately issued TU syllabus. Unit or component allocations apply at their stated level; no separate topic hours or marks are assigned here.