FIN 431 – Spring 2012 Page 1
FINANCE 431 - Spring 2012
Wednesday 6:00 - 8:45 pm - - - DeSoto/Tupelo/Booneville
Dr. Lynn Phillips Kugele
Office: DeSoto Center 259
Phone: 662.342.4765 or 662.393.1654
Home Phone: 901.754.8882 email: lpkugele@olemiss.edu
Website: http://home.olemiss.edu/~lpkugele
Goals and Objectives:
The objective of this course is to develop your skills in the practical application of the tools and concepts of basic corporate finance to actual business problems. By evaluating and solving actual problems involving the use of these financial management concepts, you will enhance your understanding of these tools and your ability to apply them in the business world. The cases considered cover a range of corporate financial problems, including financial analysis and planning, capital budgeting, cost of capital, capital structure decisions, and investment alternatives.
Prerequisites:
The prerequisites for this course include a minimum grade of C in ACCY 301, FIN 331 and FIN
338. It will be assumed that you are comfortable with the following basic concepts and tools: present value, future value, means, covariances, variances, balance sheets, income statements, cash flows, investments, expenses, Excel spreadsheets, etc.
Course Materials: REQUIRED
The cases covered in this class are available as a Course Pack from Harvard Business Cases.
Follow the link below to purchase and access the required materials: http://cb.hbsp.harvard.edu/cb/access/7756894
You must have a financial calculator to get through this course. I strongly recommend the Texas
Instruments BAII Plus financial calculator. If you have another financial calculator that you are comfortable with, you may use it however, I will use the TIBAII+ for any in-class examples.
Internet Access : You must have access to the internet for this class in order to access the class webpage ( http://home.olemiss.edu/~lpkugele/WEB431/FIN431.html
), for email and to access Blackboard.
I expect that we will meet in computer lab but if you have a laptop, I recommend you bring it to class as it will make following the case discussions easier.
You will need Microsoft Office – Word, Excel and Powerpoint – in order to utilize the course materials posted on the course website or in Blackboard. The case studies from Harvard are in
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PDF format and some have Excel spreadsheet supplements. You need to be familiar with the basic functions and use of Excel to use these or to create your own to analyze the cases.
Course Pedagogy:
Lectures are designed to clarify and supplement the case studies. Unless otherwise instructed, you will be held responsible for all reading assignments (even if they are not covered in the lecture) plus all supplementary material presented in the lecture.
Complete the reading assignment even if you do not understand everything in the first pass through the material. After the class (and before the next one) you should go back and review the material covered. This is the best way to improve your understanding of finance
Learning requires active participation. Come to class prepared to participate in the discussion on the scheduled material and assigned cases and ask questions on any concept that is unclear to you
– chances are it’s not clear to someone else as well. You are encouraged to seek answers to your questions as they arise.
Method of Instruction:
•
This is a case study class with lectures designed to introduce each topic area and review relevant material before the cases are discussed.
•
We will cover quite a few case studies in this semester. Five (5) are individual homework assignments, twelve (12) are group assignments to be presented in class and three (4) are assigned to the whole class for in class discussion. All cases will be discussed in class.
•
Students are expected to have studied each scheduled case before they are covered in class and come prepared to discuss the case intelligently. I will cold-call, and if you are either absent or unprepared, it will affect your class-participation grade. Honest mistakes are never viewed negatively but, rather, they will be used as valuable learning opportunities and discussion springboards.
•
Learn to challenge the ideas of your classmates, but courteously. Ideas are challengeable, people are not.
•
The Powerpoint slides covering each general lectures will be available in Blackboard the night before a class meeting if you wish to print them. They are designed to assist you in taking notes during the class. The general lectures are basically review and primarily come from FIN
338 – following selected chapters in the 338 textbook.
School of Business Administration – Statement of Academic Integrity:
The School of Business Administration upholds honor and academic integrity in all of its teaching, research, and service activities. All business faculty, staff and students are charged with the responsibility to behave with personal and professional integrity and to refrain from dishonorable conduct.
Any student caught cheating will be assigned an F in the course. In most cases a statement will also be made to that effect in the student’s record. When you place your name on an exam or assignment you are pledging that all work is your own.
Class Attendance, Participation and Expected Performance:
Students are expected to attend each scheduled class meeting, having read the assigned material, and prepared to discuss the case(s). I will take roll in every class.
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Any student unable to attend class is responsible for obtaining the information covered during his/her absence prior to the next class meeting.
Habitual absences and tardiness are seriously frowned upon. I recognize that on occasion you will have to be absent or late to class. However, if a student establishes a pattern of nonattendance or is habitually late I will lower the student’s grade. If there is a special, legitimate circumstance which necessitates that you be late or miss classes regularly, see me in advance.
American Disabilities Act:
If you need course adaptations or accommodations because of a disability, if you have emergency medical information to share with your instructor, or if you need special arrangements in case the building must be evacuated, please make an appointment with the instructor as soon as possible.
It is the responsibility of the student who requests a reasonable accommodation to contact the
Office of Student Disability Services (662.915.7128). SDC will then contact the instructor through the student by means of an Instructor Notification of Classroom Accommodations form.
Please complete the notification procedure within the first two weeks of class.
Grading:
We will have 2 mid-semester exams, 5 individual case studies, 12 group case assignments (each group will present 3 cases) and a required comprehensive final exam. All in-class exams will be computer based using lab computers. You will be provided with a formula sheet for each exam which will be available in advance for study. You are allowed to use a financial calculator during exams as well.
There will be no make-up exams. It is your responsibility to attend all exams at the scheduled time. If an exam is missed – whether due to an emergency, tragedy or simply because you are unprepared – the weight will be added to the final exam. There are no exceptions to this policy.
Individual Case Studies (5) 15%
Group Case studies (3/grp)
Exam I
Exam II
15%
15%
15%
Class Participation
Final Exam
10%
30%
100%
Individual case studies will be graded on a scale of 0-10. 10 is given if all work is correct, 8 for almost correct, 5 for effort, and 0 if not submitted. I will not comment directly on your work but will post solutions. I am more than willing to discuss your individual assignments with you.
I will use BlackBoard to post grades. Test grades will be posted as soon as possible after each test is given or assignment submitted. You will be notified via e-mail when grades are available. I will not email grades nor give them out over the phone.
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Case Studies:
Assigned case study write-ups (individual and group) are due BEFORE class on the date shown on the schedule. You may turn in a hardcopy or email your assignment to me at lpkugele@olemiss.edu
. Keep a hard copy for yourself for reference during the class discussion of the case.
In DeSoto we will have 3 groups of 3 each. Tupelo and Booneville together will be the fourth group. Each group will be responsible for 3 case presentations during the semester. We’ll make the group assignments during the first class meeting. The group scheduled to discuss a case in class will be responsible for both the presentation and write-up following the general outline below.
The cases designated as assigned to “ALL” mean that all groups are expected to have read and attempted to solve the case to some extent. Nothing will be turned in but you may be called on during class discussion. Whichever groups are scheduled to present on the same night as one of these “ALL” cases are NOT expected to have done more than read the case. If you check the schedule, each group is excused from an “ALL” case once during the semester.
Your case summary should be no more than 2 pages typed pages excluding exhibits, no more than
5 pages with exhibits. At the start of each individual case discussion, I will call upon you to make a presentation of your Key Observations (executive summary). After that, I will lead the discussion.
The format for the written case assignment is as follows:
Executive Summary (1 paragraph): The setting of the case, the key elements of the background situation, the single most important question, and your answer to that
question recommendation).
Details: The next few paragraphs should provide the logic supporting your recommendation and also attempt to answer other questions that I may have specifically identified for this case.
After that you should provide exhibits, references and other supporting details. A schematic of the typical case discussion is given below:
SITUATION KEY QUESTIONS
KEY
RECOMMENDATION
Background Facts
Typically identified in the case description or by me
Your answer to the questions
DETAILS
Explain why your answer makes sense
BRIEF ANSWERS
You provide specific answers
CLASS
DISCUSSION
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In addition to covering all of the boxes above, discussion of the case in class may also address the following issues:
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What are the hidden questions, if any?
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What did we really learn from this case?
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Where else can we apply this learning?
ASSIGNMENT SCHEDULE:
The schedule is tentative and subject to change. Notice of any necessary change will be given during regularly scheduled class time as well as posted on the class webpage. Students not attending class are responsible for obtaining this information.
FIN 431 Wed 6 pm Group Case Studies Individual
Date Lecture/Case ALL G Groups Case Study Due
1/25/2012
Introduction
331/338 review
Financial Analysis CH 9
2/1/2012
Financial Health
WACC Ch 10+
Regression
Financial Health (FA) Tire City (FA)
2/8/2012
2/15/2012
2/22/2012
D1
TB
D2
D3
TB
Encana (WACC)
HK Dragon (WACC)
Marriott (WACC)
Proctor & Gamble (WACC)
Pacific Grove Spice (WACC)
2/29/2012
Ameritrade (WACC) Ameritrade (WACC)
EXAM 1 Financial Analysis/WACC Midland (WACC)
3/7/2012
Shareholder Value CH 11
Capital Structure CH15
OPM Movie
3/14/2012 SPRING BREAK
3/21/2012
D1
D2
Amer Home Products (CS)
Philip Morris/Kraft (CS)
3/28/2012
Cooper (SHV) Cooper (SHV)
EXAM 2 S/H Value / Capital Structure Blaine (CS)
4/4/2012
Capital Budgeting CH12-13
Barbarians @ the Gate
4/11/2012
4/18/2012
4/25/2012
#REF!
Real Options
Investment Opp (OPT)
D3
TB
Carr Internet Café (CB)
St Clements (CB)
D1
D2
Super Project (CB)
Target (CB)
Investment Opp (OPT) D3 Option Valuation (OPT)
FINAL EXAM (Comprehensive)
Ocean Carriers (CB)
Real Opt Exercise
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