College of Business and Economics
Department of Finance
Spring 2023
Fin 523 (12612)
Seminar in Corporate Financial Management
Instructor: Prof. Mehmet Akbulut
E-mail: makbulut@fullerton.edu
Phone: 657-278-8259
Course Website: On Canvas. Click on the Canvas icon
on your portal. As a registered
student you are enrolled in Canvas. You may access Canvas for all your classes by clicking on your
student portal, found on the CSUF website. There is a short video explaining Canvas access.
Class Time and Location: Monday 7:00pm-9:45pm, in person at SGMH-1506.
Office Hours: Monday and Wednesday 11:30am-1:00pm, at SGMH-5194, or by appointment.
Course Prerequisites:
The prerequisites for this class are Finance 517 or equivalent and classified CBE status. If you have
not successfully completed the prerequisites or are not of appropriate status, you are unqualified for
this class. If you are unqualified, you must drop this class immediately, following the usual procedure.
This will allow a qualified student to enroll. All classes are subject to administrative audit at any time
during the semester. Any student found to be unqualified will be administratively dropped from this
class.
Required Materials:
1. Case Studies in Finance: Managing for Corporate Value Creation, Eight Edition,
(McGrawHill Irwin, by Robert F. Bruner (www.mhhe.com/bruner8e) ISBN
9781259277191
2. Selected cases from Harvard Business School Publishing and the Asia Case Research
Center (purchase from http://hbsp.harvard.edu/product/cases)
3. MS Excel : You can install it from this link.
Suggested Reading List For Valuation:
1. The Intelligent Investor, by Benjamin Graham
2. Valuation: Measuring and Managing the Value of Companies, by Tim Koller, Marc Goedart
and David Wessels
3. Damodaran on Valuation: Security Analysis for Investment and Corporate Finance, by
Aswath Damodaran
Page 1 of 9
GRADING POLICY
Negotiation exercise with valuation report (group work)
20%
Group case presentation with write-up (group work)
30%
Class Participation and class work (individual work)
20%
Final examination case (individual work)
30%
TOTAL
100%
DELIVERABLES:
Negotiation exercise with valuation report: Each group will be assigned either the buyer or seller
role in a case that involves the negotiated sale of a public firm. The negotiations will be conducted
during a class period. The grade will be based on a formal valuation of the business and the
outcome of the negotiations. Each group shall submit a four-page (maximum) valuation report
(single spaced, type 12 font) by 5 pm on the negotiation date. Group information is posted on
Canvas. Valuation report should talk about your assumptions and the methods you used for your
valuation, as well as your opening price and reservation price.
Group case presentation with write-up (see Appendix A): Each group will present and prepare
a written analysis of an assigned case. The presentation will consist of an oral presentation (30 mins)
and a question-and-answer period (15 mins). Each group shall submit a twelve-page (maximum) case
report (including exhibits, single spaced, type 12 font), and the presentation slides by 5 pm on the
presentation date. The case report should clearly identify the problem in the case, list your
assumptions, summarize your analysis, and recommend a course of action for management. Case
reports with very similar analyses and write-up will be penalized with a lower score. The depth and
quality of the analysis and the professionalism demonstrated by the presentation will be used to
determine the grade for the group.
Class participation and class work (See Appendix B): Class participation grades will be
determined based on 1) individual contributions to class discussions of cases and 2) within-group
peer evaluations. Come prepared, participate in classroom discussion, answer questions posed by the
professor, and ask clear, constructive questions about the topic under discussion. Generally, if your
classmates value your contributions to class discussions you are likely doing well.
Final Examination Case (see Appendix A): The final examination will consist of a written case
analysis. For this assignment, students will work individually. Each student will select a final case
from the list of cases posted on Canvas. The written report should not be more than 12 pages
(including exhibits, single spaced, type 12 font). The final examination case report should clearly
identify the problem in the case, list your assumptions, summarize your analysis, and recommend a
course of action for management. More than one student can choose the same case, but you should
work individually. Case reports with very similar analyses and write-up will be penalized with a lower
score.
Page 2 of 9
Course Objectives:
The primary objective of the course is to train students in analyzing and solving real life financial
problems that they are likely to encounter as corporate managers, decision-makers, and investors. The
focus will be to teach the students how they can use the financial analysis techniques that they have
acquired in prior finance classes in evaluating a firm's investment and financing decisions. This will be
done through the analysis and discussion of real-life financial cases. At the end of the course, the students
will be able to identify the value-creating strategies available to a firm and suggest an appropriate
course of action to maximize firm value.
Course Structure and Classroom Procedures:
This is a case course, meaning that we will examine, analyze, and discuss real-life cases in class. It is
an interactive learning experience based on class discussion, DO NOT expect to sit silently and listen
to a lecture for the entire class duration without contributing to the discussion. In fact, to discourage
such behavior, I will be randomly asking different students each class to provide a brief overview of
the case and to start the discussion. To receive the maximum benefits from this class, you will have to
come prepared to every class by reading the case and thinking about the questions posed in the case.
The instructor’s role in this class is mostly laying the foundation for the case and managing the
discussion and then summarizing the conclusions. The class is organized around basic topics and at
the beginning of each topic I will be providing a briefing on the techniques and concepts that will be
used in that topic. After that we will start discussing the cases.
Keep in mind that there is no one correct answer to the problems posed by the cases; each case is
complex (as things usually are in the real world) and there are never clear-cut answers. What you
expect to be able to do however is to clearly identify different courses of action and be able to
analyze the pros and cons of each alternative.
At certain points during this class, you will work in groups. To ensure each group member
contributes equitably to the group project, there will be strong penalties to deter free riding off the
efforts of your fellow group members. There will be confidential peer evaluations which will play a
significant role in determining your grade for the group projects (I will be distributing an evaluation
form later in the semester). You must complete all essential requirements of the course (see
course assessment) before I will assign a grade.
Course Policies and Expectations of Student Performance
1. Every student is expected to attend every class, prepare every case and be ready to
discuss the case in class. Class attendance is very important to successful completion
of this course. If you know that you are unable to attend more than two of the
classes,
you should probably not register for this course (see course assessment
below). Students
may be called on randomly to lead the class discussion and/or
present the material they
have prepared for the class. If you cannot attend a class for
whatever reason, please notify me in advance. Frequent absences from the class will affect
your class participation grade adversely.
2. Group work: For group assignments, each group will receive one grade and every group
member will receive the same grade. This policy assumes that every group member
contributes more or less equally to the group assignment. However, should a member
of a group NOT CONTRIBUTE ANYTHING to the case presentation or team project,
this member’s name SHOULD NOT BE INCLUDED in the group case/project. Should
Page 3 of 9
this happen (which I sincerely hope will not), the de-listed member will receive a ZERO
SCORE for the case/project unless he/she presents and writes up an individual case report
to replace the group case/project. I hope that this policy will discourage free-riding and
rewards those members who have done their part for the group assignments.
3. The final class grade will be based on a relative frequency distribution (percentile ranking) of
the total points accumulated over the entire semester. This approach implies that your final
grade will be determined by the relative performance of the students in the class, as well as the
overall performance of the entire class I. will use the plus/minus grading system for this
class. Under this system, a C is required for “passing” a course and “C-” counts as failing. A
"C-" or lower grade is unusual but possible.
Honor Principle:
Some of the cases assigned this semester may have been used before in other semesters. It is of utmost
importance that students do not consult with prior students or refer to their written cases. Doing so
clearly defeats the purpose of taking this class, as it would prevent one from learning to use his/her
knowledge and analytical skills in case analysis. Even more importantly, I will consider any such
infractions as a violation of the honor principle and scholastically dishonest. For information about
CSUF policies on academic integrity please see UPS 300.021.
Academic Integrity Policy
Academic dishonesty occurs whenever a student attempts to take credit for work that is not his/her
own or violates test-taking rules. Examples of academic dishonesty when taking tests are: looking at
the work of other students, passing answers among students or using unauthorized notes or crib sheets
for exams. Examples of academic dishonesty on out-of-class projects include submitting the work of
others or quoting directly from published material without referencing the source or failure to put
material copied from another source in quotes to indicate that it is quoted material. The latter is called
plagiarism. If your project is found to contain materials copied from other sources such as
from a firm’s financial reports that are not your words and not appropriately referenced, this
is plagiarism and will be considered an incidence of academic dishonestly resulting in a “F”
for the course. The instructor will also send a report of the incident and the names of those
involved to the Student Affairs office for further action. If you have any questions about the proper
use of outside sources, please consult with your instructor.
CBE Assessment Statement
The programs offered in College of Business and Economics (CBE) at Cal State Fullerton are
designed to provide every student with the knowledge and skills essential for a successful career in
business. Since assessment plays a vital role in College’s drive to offer the best, several assessment
tools are implemented to constantly evaluate our program as well as our students’ progress.
Students, faculty, and staff should expect to participate in CBE assessment activities. In doing so,
College is able to measure its strengths and weaknesses, and continue to cultivate a climate of
excellence in its students and programs.
Assurance of Learning (AoL) is an integral part of both our AACSB and WASC accreditation. For
more information on our College-based assurance of learning efforts, please visit the Assessment
and Instructional Support website.
Page 4 of 9
Important University Information and Student Policy Website
Topics on the website above include: Students with Special Needs, Academic Dishonesty
Policy, Library Support, Final Exams Schedule, University Learning Goals, Degree Program
Learning Outcomes and Emergency Preparedness
TECHNICAL COMPETENCIES EXPECTED OF STUDENTS:
The following technical computer skills are required of students during this online timeframe:
•
•
•
•
•
•
Use of Zoom (tutorial may be accessed here: https://youtu.be/gWEPFFx9PfI)
Use of word processing (i.e., Microsoft Word)
Use of Adobe Reader and converting formats to .PDF
Use of a Web Browser (i.e., Mozilla Firefox, Google Chrome, Microsoft Internet Explorer,
or Safari)
Handling e-mail communications and inserting attachments; your CSUF e-mail account
should be checked daily – as this is the instructor’s communication method for an
online class.
Downloading and uploading files from the internet
What to do when technical problems develop:
If students are having problems using the features implemented in the course site, they should call
the Help Desk at (657) 278-8888 or e-mail helpdesk@fullerton.edu.
Netiquette (appropriate on-line behavior):
Navigating the internet dictates that you adhere to a certain unspoken code of conduct. This on-line
set of rules, called netiquette, ensures that you are not misunderstood (and that you do not offend
anyone) when communicating on-line.
Zoom Etiquette:
•
•
•
•
•
•
•
Use your webcam and put your microphone on mute during Zoom class sessions (unless
instructed otherwise). If you are unable to turn on your video, add a profile picture. Test
your camera position before each class begins to ensure you are centered in the camera.
Make sure to limit distractions as much as possible during class (i.e., find a quiet space, do
not browse other apps, put your phone away, etc.) to be more engaged.
Do not use inappropriate Zoom backgrounds or nicknames; this course is centered around
professionalism and it is expected that you act as such.
Keep professional behavior during the Zoom session (e.g., dress appropriately for class,
consider your body language, don’t participate in non-course related activities)
Keep irrelevant chat to a minimum (remember to answer discussion questions and not chat
with your classmates about something not relevant to the course during in-class discussion
time)
Do not offend or enrage a classmate (be sensitive and use appropriate language); no
shouting (using all capital letters); if you do not have anything nice to say, do not say it
Do not personally record the class meeting on your device. This is a policy from campus to
protect individual privacy and violating this rule can result in campus disciplinary action.
More Core Rules of Netiquette can be found at: http://www.albion.com/netiquette/corerules.html
Page 5 of 9
Lecture Date
Course Schedule
Topic
Cases and Reading
How to Study and Discuss Cases (pp. XXV-XXXI)
Course Overview
Ethics In Finance (pp. XXXiii-XLIII)
Setting Some Themes
Warren E. Buffett, 2015 (#1)
1
1/23 M
2
1/30 M
Value Creation and
Economic Profit
The Battle for Value, 2016: FedEx Corp. vs. United
Parcel Service, Inc. (#2)
2/6 M
Market Efficiency
Larry Puglia and the T. Rowe Price Blue Chip Growth
Fund (#3)
3
4
5
6
Financial Analysis and
Forecasting
2/13 M
Cost of Capital
2/27
M
Valuing the Enterprise:
Acquisitions and Buyouts
M
Valuing the Enterprise:
Acquisitions and Buyouts
3/6
7
3/13 M
Briefing on Negotiation
Techniques
8
3/20 M
Negotiation Exercise
9
4/3 M
Capital Budgeting and
Resource Allocation
4/10 M
Capital Budgeting and
Resource Allocation
10
11
12
13
14
Approaches for Thoughtful Forecasting (#5)
4/17
4/24
5/1
5/8
M
M
M
M
5/15 M
The Financial Detective (#6)
Whole Foods Market: The Deutsche Bank Report (#7)
"Best Practices" in Estimating the Cost of Capital (#10)
H.J. Heinz: Estimating the Cost of Capital in Uncertain
Times (#12)
Chestnut Foods (#14)
Methods of Valuation for Mergers and Acquisitions
(#43)
Carter International (#49)
Sun Microsystems (#48)
OutReach Networks: First Venture Round (#51)
“When to Walk Away from a Deal” (HBR, April 2004)
“Two Psychological Traps in Negotiation” (HBS 9-897036) (P)
Exercises in Negotiation Analysis (HBS) (P)
Recommended Reading: 'Secrets of Power Negotiating',
by Roger Dawson
To be assigned
The Investment Detective (#16)
The Procter & Gamble Company:Invetment in Crest
Whitestrips (#22)
Star River Electronics (#25)
Group Case Presentations
IPO Valuation
Liquidity Management
To be assigned
Ferrari: The 2015 Initial Public Offering (#46)
J.C. Penney (#36)
Open study session for the final project
Final Cases are due by
5:00pm
Page 6 of 9
Appendix A
Instructions for Preparing a Written Case Analysis
1. Read the first few paragraphs, then go through the case quickly, asking yourself, "What
broadly is the case about and what types of information am I being given to analyze?"
2. Read the case very carefully underlining key facts as you go. Try to put yourself in the
position of the decision-maker in the case. Identify the perspectives involved, including that
from which the decision will be made. Analyze the data presented and evaluate it in light of
other information included in the case. Try to understand the present situation, as well as its
historical origin and development. Use the exhibits to help you understand and/or interpret
the text.
3. Decide what the major problems are and, if appropriate, prioritize them. Determine
whether the problems stated by individuals in the case are the real problems or whether they
are also symptoms of some larger issues that need to be solved. Identify any unstated,
hidden problems. Then go through the case again, sorting out the relevant considerations
for each problem area.
4. With the problems in mind, identify the feasible alternative courses of action. Determine
what additional information is necessary to evaluate the alternative courses of action. Obtain
that additional information.
5. Evaluate the alternatives to determine their attractiveness and decide what your specific
recommendation is to be. In doing so, use your understanding of the alternatives to frame a
solution to the problem(s), and predict and evaluate the probable consequences of your
solution.
6. Decide how you will organize the presentation of your solution to the case.
Page 7 of 9
Appendix A (continued)
Document Organization
Executive Summary (1 page)
The case write-up begins with a single-page executive summary which must be able to stand alone and
provide a busy top-level decision-maker with a complete briefing of the problem, what course of
action to follow and a succinct description of why. Identify the problem(s) concisely, using whatever
case facts are necessary to show significance and/or priority.
Analysis
Give a short list of the key assumptions you make in your analysis, the logic of your argument leading to
your conclusion and the proposed solution. Assumptions should be justified if possible, and the
sensitivity of your recommendation to your assumptions should be assessed. Note that key
assumptions are not numerical estimates -- defer numerical estimation assumptions to the tables.
Avoid generalities in your analysis. Be as specific as possible. Express your ideas clearly, supporting
them adequately with evidence, explanation, and references to appropriate exhibits. The strengths and
weaknesses of alternative courses of action should be developed. The analysis should build to support
your recommendation. Reasons for accepting or rejecting alternatives should be stated and, if
necessary, defended.
State your recommendation clearly and in detail sufficient to guide implementation. Make specific
recommendations and while your recommendations will rest on assumptions, your job as a consultant
to the decision-maker is not to give a list of contingent recommendations. Discuss both the positive
and negative results of following your recommendation. Explain why your recommendation should
be followed. Make sure that the recommendation follows logically from your analysis.
Exhibits
Tables, charts, spreadsheets, or any other supporting materials may be attached as exhibits. Be
reasonable on the number of exhibits. Include only those exhibits that are needed to support your
arguments and tell the reader in the text of the paper what exhibits to look at and why. All exhibits
should be clearly labeled so that readers know what they should learn from them. Also any
assumptions and formulas you use to derive figures in the exhibits should be obvious to the reader.
Care in preparing your tables is important. A rule of thumb is that the tables should be able to stand
alone: i.e., they could be read by someone without reading the text and the reader could discern exactly
what they should learn from the table.
Page 8 of 9
Appendix B
Class Participation
The following general guidelines will be used to grade your participation performance:
1.
Quality of ideas, analysis, and action recommendations:
This is the core demonstration of mastery. The student talks knowledgeably about ideas and
any analysis, the logic underlying them, and limitations or follow-up actions if any.
2.
Frequency of contribution: The student participates regularly in discussions and
contributes to the learning of the whole classroom community.
3.
Quality of process and argument: The student directs comments to the whole classroom
community (rather than to just the instructor) and informs other students about ideas and
analysis in a clear and intelligent manner. The student listens to others and understands
what they have said, responds appropriately, asks clear, constructive questions, avoids
rambling discourses or class domination, uses proper vocabulary pertinent to discussion,
builds on the ideas of others, etc. The student synthesizes other students’ points and makes
useful connections between this and other material.
4.
Intellectual leadership/self-confidence: The student is there at important inflection
points in the discussion, helping to deal with confusion, reframing the issues, and explaining.
Page 9 of 9