FINANCE 5033
Spring 2008
Instructor:
Office:
Keith Wm. Fairchild
BB 4.02.54
TTh 4:30 - 5:30pm
W
6:00 – 7:00pm
and by appointment
phone: 458-5307
e-mail: keith.fairchild@utsa.edu
website: faculty.business.utsa.edu/kfairchild
Objectives:
The course focuses on a wide variety of corporate activities and the various
complex problems that financial decision-makers face. The application of
theoretical as well as practical concepts to problems requiring analyses of a
strategic nature, both quantitative and qualitative, is explored, as well as the ability
to communicate the rationale underlying the ultimate recommendation in both an
oral and written manner. While the class will largely be taught from the vantage
point of a financial manager, the broader policy and strategic considerations of an
entire organization will provide the central theme of the course.
Prerequisites: FIN 5023
Text:
No text is required for this course. Instead, a selection of cases and readings will
be used, most of which will be available from the Harvard Business Online
publications website. In addition, there will be supplemental postings on my course
website (http://faculty.business.utsa.edu/kfairchild/classes/5033/5033.htm). The
textbook used in FIN 5023 provides an excellent reference source for students.
The Harvard Business publications are available via the following link:
http://harvardbusinessonline.hbsp.harvard.edu/relay.jhtml?name=cp&c=c69054
The price is $3.95 per item which you can download directly. Do NOT pay more
than this amount.
COURSE STRUCTURE:
Grades for Finance 5033 will be determined on the basis of a maximum 100 point scale.
The components and weights of the factors contributing to this total are as follows:
Case Presentation #1
Case Presentation #2
Final Case Analysis
Peer Evaluation
Instructor Evaluation
25%
25%
30%
10%
10%
Total
100%
The grading of case presentations will be partly determined by fellow classmates who will rate
each group's relative performance of oral presentations in terms of the quality of the presentation
and decision, with the other portion of the grade being the instructor's evaluation of each group's
accompanying written report. Finally, because each student will be working in a group where only
the composite effort is evaluated, each member in each group will rate the other members and
him(her)self as to their relative contribution to the group effort, contribution and participation,
quality of work, difficulty of assignments, etc.
FINANCE 5033 (CASES IN FINANCIAL MANAGEMENT)
COURSE SYLLABUS
AND
TABLE OF CONTENTS
January
16
Initial Meeting
Readings:
23
Real Options
Readings:
30
The Ralston Company
The Balboa Company
Copeland and Keenan, “How Much is Flexibility Worth?”
Copeland and Keenan, “Making Real Options Real”
Mauboussin, “Get Real: Using Real Options in Security
Analysis”
Theory versus Practice
Case:
The Case of the Unidentified Industries: 2006
Readings:
Shulz, “What’s Wrong with Modern Capital Budgeting?”
Copeland, “What Do Practitioners Want?”
February
6
Theory versus Practice
Readings:
13
Graham and Harvey, “The Theory and Practice of
Corporate Finance: Evidence from the Field”
Analyzing Businesses
Readings:
Hamermesh, Marshall and Pirmohamed, "Note on
Business Model Analysis for the Entrepreneur” (9-802048)
Sahlman, “Some Thoughts on Business Plans” (9-897101)
20
27
Business Ethics and Objectives
Case:
Group 1, Costco Wholesale
Statement Analysis (A) (A-186A)
Corporation
Readings:
Paine, “Ethics: A Basic Framework” (9-307-059)
Financial
Cost of Capital
Case:
Group 4, Accounting Fraud at Worldcom (9-104-071)
Readings:
Bruner, Eades, Harris and Higgins, “Best Practices in
Estimating Cost of Capital” (website - Estimating Cost of
Capital)
Asquith and Mullins, “Leveraged Betas and the Cost of
Equity” (9-288-036)
March
5
12
Capital Structure
Case:
Group 2, Star River Electronics, Ltd. (UV0014)
Readings:
Donaldson, “New Framework for Corporate Debt Policy”
(78504)
Financing
Case:
17
Spring Break
26
Valuation
Group 3, Bed, Bath & Beyond (KEL082)
Readings:
Fairchild, “Price-Earnings Ratios and the Valuation of the
Firm”
Guest Speaker:
Mr. Jim Kahan
April
2
Valuation (continued)
9
Mergers & Acquisitions
Readings:
16
Harvesting
Readings:
Lerner, “A Note on the Initial Public Offering Process” (9200-018)
Cases:
Group 1, First Caribbean (906N04)
Group 4, Spyder Active Sports (9-206-027)
23
Cases:
Group 2, Linear Technology (9-204-066)
Group 3, Arch Wireless, Inc. (9-205-024)
30
Course Summary
May
7
FINAL CASE DUE
Dollar General Going Private (9-108-015)