FINE7600-01 Syllabus_Fall2012

FREEMANSCHOOL OF BUSINESSFINE 7600 01ValuationFall 2012Instructor: Professor Zhi LiOffice Hours: Mondays 2:00-3:00 p.m. andWednesdays 2:00-3:00 p.m.Class Meeting Days & Times: Office Phone: (504)314-2488Blackboard Site: Class Location: Room2111, GWH–IIMW 9:30-10:45 AMCourse DescriptionThe course studies advanced the graduate student’s knowledge and comprehension corporate valuation using discounted cash flow, comparables, and option techniques. The focus first is on valuation methods that include Net Present Value/Weighted Average Cost of Capital, Adjusted Present Value, Economic Value Added Model, Relative Valuation, and Real Option Value. The valuation methods will be applied to various forms of corporate investment, including new investment decisions, IPOs, restructuring transactions including mergers and acquisitions, divestitures, and LBOs, and of projects with real option features.Course Prerequisites FINE 6050Course GoalsThis course is designed to teach students all the important elements of corporate valuationusing discounted cash flow, comparables, and option techniques. Through case studies, students will learn to apply these valuation skills under different settings, such as evaluating new investment decisions, IPOs, mergers and acquisitions, divestitures, and LBOs. Problem solving skills are emphasized throughout the course and in keeping with the Freeman School’s “learning by doing” mission, the course is structured to be an applied course where students learn to value and assess finance decision making of actual companies.Student Learning ObjectivesAs the result of this course students should be able to (i) understand and apply different validation models efficiently; (ii) value equity, the overall firm value, and other assets; (iii) understand decision making process of major corporate events, such as IPOs, merger and acquisitions, and LBOs; (iv) build valuation models using spreadsheets and write reports proficiently.Course MaterialCase book: comprised of 7 cases (sold in book store at LBC).Damodaran on Valuation (Second Edition), by AswathDamodaran, Wiley Finance.Course Lecture Notes, available from the blackboard website ().You are required to print out these lecture notes and bring them to class. I will not bring copies of the lecture notes to class. If you do not have access to or cannot download the lecture notes, please seeme so I can help you.GradingThe assessment policy for this course is specified in the following paragraphs. Please read it carefully, as in the interest of fairness to all students, no exceptions will be made.Performance will be measured by both group works and individual works. The class’s raw scores will be adjusted until the average G.P.A. is consistent with the School policy on grading guidelines.Rules of group work:Students will work in groups (I will decide on the size of the group on Aug 20th, based on size of the class). Each group will be required to work on five cases and a final group project.There will be one grade per group, no matter how the work load is distributed among the group members.• Pick your own groups. (If you have trouble getting picked, I will help).• Group assignments must be finalized by Sept 5th, 5pm. Students cannot switch group afterwards.• All group work will be self-policed.Group Work:-Warm-up case: (0%,Mandatory to ALL groups. Fail to turn in this case on time will result in a 5% reduction to all group members.)The Boeing 7E7.Due date: 9/4/2012, 5pm.Warm-up case should be no longer than three pages of text (double space, Font 11, 1 inch margin on all sides). You should also include any additional financial analysis (i.e. tables) that you would like to attach.-Lead case:(15%. Each group will be randomly assigned to one case and act as leader.) Lead case write-up should be no longer than six pages of text (double space, Font 11, 1 inch margin on all sides). You should also include any additional financial analysis (i.e. tables) that you would like to attach. The lead groups will also help with classroom discussion and answer questions.- 3 case write-ups: (15% total, 5% each. Each group can choose three other cases, beside the mandatory warm-up case and lead case, as their case assignments.)For the 3 cases, the write-ups should be no longer than three pages of text each (double space, Font 11, 1 inch margin on all sides). You should also include any additional financial analysis (i.e.tables) that you would like to attach.-Final Project and Presentation: (25% total. 15% for write-up, 10% for presentation.)The final project is a large research project.The topic will be discussed after first mid-term.Each group should prepare a detailed report, and a 15 minutes in-class presentation. The reports can vary in length but should be LESS than 20 pages including exhibits.Rules on individual work:All exams and are strictly individual work. There will be no make-up exam. If you miss mid-term for a good reason (students must provide supporting documentation), the grade will be redistributed to the final exam.Individual Work:-Mid-term: (15%. In class exam, one 8.5x11 cheat sheet allowed.)-Final: (30%.Open book, open notes, cumulative exam.)Class AttendanceStudents are expected to attend all classes. I will take attendance randomly several times during the semester. Although no points are specifically allotted for attendance, the final course grade could be lowered by half a letter grade for excessive (more than 3 classes) unexcused absences.Statement about Academic IntegrityThis class will be conducted in full accordance with Tulane’s policies about academic integrity including, but not limited to, the Code of Academic Integrity and the Code of StudentConduct. These can be found at: /code.htm and/studentaffairs/conduct/.Freeman Educational Norms and ExpectationsThis class will be conduct ed in full accordance with Freeman’s Educational Norms and Expectations. Please reread the Norms and Expectations, which can be found at/studentserv/pdf/bsmnorms.pdf.Learning DisabilitiesUnder the Americans with Disability Act and the Section 504 of the Rehabilitation Act, if you have a disability, you may have the right to an accommodation; however, the right is contingent upon you taking certain st eps. You should review the steps that you need to take, as well as Tulane’s policy concerning accommodations at /disability/index.html.Any student with a disability, in need of course or examination accommodation, should request an accommodation through the University’s Office of Disability Services (ODS) located in the Mechanical Engineering Building. At the beginning of the semester, please provide me with a copy of your approved ODS accommodation form. I am committed to working with ODS to ensure that I provide you with all approved accommodations. If you do not deliver the approved accommodation form to me, I will not know that ODS approved your accommodation and I will have no basis to provide those accommodations.PLEASE NOTE:For students with extended time accommodation, you are to take your exams within the FreemanSchool, please take your Exam Request Form to Suite 200 at least three days before the exam and the Office of Undergraduate Programs will schedule your exam. You must begin your exam when the class normally would begin. For all other accommodations, please take your form to ODS and they will schedule your exam.TENTATIVE CLASS SCHEDULE(I reserve the right to change the dates for cases and exams) Introduction and overviewClassic Discount Cash Flow Model, WACC, FCFF,FCECase1: The Boeing 7E7 9/5/2012Adjusted Present Value, Relative valuations, Merger& AcquisitionsCase2: The Timken CompanyCase3: Valuation of AirThread ConnectionsInitial Public Offering, Economic Value Added ModelCase 4: LinkedIn CorporationMid-term 10/17/2012Economic Value Added ModelCase 5: Coke vs. PepsiLeverage BuyoutCase 6: AcovaRadiateursReal OptionsCase 7: Arundel PartnersFinal Project Presentations Starting from 11/26/2012。