University of Wisconsin-Whitewater
Curriculum Proposal Form #3
New Course
Effective Term:
2137 (Fall 2013)
Subject Area - Course Number: FNBSLW 735
Cross-listing:
(See Note #1 below)
Course Title: (Limited to 65 characters)
Business Valuation using Financial Statements
25-Character Abbreviation:
Sponsor(s):
Hamid Moini
Department(s):
Finance & Business Law
College(s):
Business and Economics
Consultation took place:
NA
Programs Affected:
Yes (list departments and attach consultation sheet)
Departments:
MBA
Is paperwork complete for those programs? (Use "Form 2" for Catalog & Academic Report updates)
NA
Yes
Prerequisites:
will be at future meeting
FNBSLW 718
Grade Basis:
Conventional Letter
S/NC or Pass/Fail
Course will be offered:
Part of Load
On Campus
Above Load
Off Campus - Location
College:
Business and Economics
Instructor:
Hamid Moini
Dept/Area(s): Finance & Business Law
Note: If the course is dual-listed, instructor must be a member of Grad Faculty.
Check if the Course is to Meet Any of the Following:
Technological Literacy Requirement
Diversity
Writing Requirement
General Education Option: Select one:
Note: For the Gen Ed option, the proposal should address how this course relates to specific core courses, meets the goals of General Education
in providing breadth, and incorporates scholarship in the appropriate field relating to women and gender.
Credit/Contact Hours: (per semester)
Total lab hours:
Number of credits:
Total lecture hours:
Total contact hours:
Can course be taken more than once for credit? (Repeatability)
No
Yes
If "Yes", answer the following questions:
No of times in major:
No of times in degree:
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0
1
No of credits in major: 0
No of credits in degree: 3
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Proposal Information: (Procedures for form #3)
Course justification:
As the economy and the markets are rebounding, merger and acquisition activities are on the upswing
again. There are great interests from students as well as industry for talents in the mergers and
acquisitions area. Many leading business programs in the nature offer courses related to mergers and
acquisitions. No courses currently offered by the FNBSLW department provide training in this venue.
The valuation of a firm depends critically on the understanding and analysis of companies’ financial
statements, as well as growth potential. Ability to analyze financial statements is one of the several
essential skills for MBA students, as indicated by CoBE Advisory Board. This course is developed in
response to both the ever changing financial markets and feedbacks from our Advisory Board.
Relationship to program assessment objectives:
Students are expected to develop critical thinking skills and able to make sound business decisions. This
course introduces firm valuation models and allows students to develop skills which are necessary in
valuing projects, divisions, and corporations in a cross-border setting. This course requires students to
work on, write up, present, and submit a substantive valuation project based on a recent real-life example
involving an acquisition of a ‘target firm’ by an ‘acquiring firm.’ As part of the core MBA curriculum,
this course will assess students’ critical thinking skills.
Budgetary impact:
There is no direct budgetary impact. Once approved, this course will be offered every semester as part of
the core curriculum for MBA students. Teaching load will be shifted among existing faculty members to
cover graduate level courses. The department will develop a rotation table for course offering – some of
the elective courses will offered less frequently.
Course description: (50 word limit)
The objective of this course is to advance students understanding of how to use financial
information in order to value and analyze firms. There is no major corporate investment decision
that can be made without first asking and answering the question, ‘what is it worth?'. The goal of
this course is to build students skills and confidence in answering that question.
The focus of firm valuation is on making investment decisions in real – as opposed to financial –
assets. Firm valuation will acquaint students with the widely-used, yet rigorous, ideas that have
revolutionized the practice of valuation of projects, divisions, and companies during the past few
decades.
If dual listed, list graduate level requirements for the following:
1. Content (e.g., What are additional presentation/project requirements?)
2. Intensity (e.g., How are the processes and standards of evaluation different for graduates and
undergraduates? )
3. Self-Directed (e.g., How are research expectations differ for graduates and undergraduates?)
Course objectives and tentative course syllabus:
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Bibliography: (Key or essential references only. Normally the bibliography should be no more than one or two
pages in length.)
The University of Wisconsin-Whitewater is dedicated to a safe, supportive and non-discriminatory learning
environment. It is the responsibility of all undergraduate and graduate students to familiarize themselves with
University policies regarding Special Accommodations, Academic Misconduct, Religious Beliefs Accommodation,
Discrimination and Absence for University Sponsored Events (for details please refer to the Schedule of Classes; the
“Rights and Responsibilities” section of the Undergraduate Catalog; the Academic Requirements and Policies and
the Facilities and Services sections of the Graduate Catalog; and the “Student Academic Disciplinary Procedures
(UWS Chapter 14); and the “Student Nonacademic Disciplinary Procedures" (UWS Chapter 17).
Course Objectives and tentative course syllabus with mandatory information (paste syllabus below):
Course Proposal
Business Valuation using Financial Statements
By
Hamid Moini
Department of Finance and Business Law
Course Objectives:
The objective of this course is to advance students understanding of how to use financial
information in order to value and analyze firms. There is no major corporate investment decision
that can be made without first asking and answering the question, ‘what is it worth?'. The goal of
this course is to build students skills and confidence in answering that question.
The focus of firm valuation is on making investment decisions in real – as opposed to financial –
assets. Firm valuation will acquaint students with the widely-used, yet rigorous, ideas that have
revolutionized the practice of valuation of projects, divisions, and companies during the past few
decades. Firm valuation has three goals. They are:
1.
to develop tools which are necessary in valuing projects, divisions, and corporations,
including in the cross-border setting;
2.
to present the interaction of the firm with financial (including foreign exchange) markets
and institutions, and how equilibrium pricing relations in these markets matter for
investment decisions;
3.
to familiarize students with making corporate valuation, investment, and risk
management decisions in the mergers and acquisitions (M&A) context.
Simply put, by the end of the course, I expect students in this course to be comfortable with the
tools and frameworks to answer the question: What is a real asset worth?
Course Synopsis:
This course will be divided into five parts.
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Part 1 is a quick recap and reinforcement of the ideas that drive all valuations: free cash flow,
cost of equity and weighted average cost of capital, discounted cash flows valuation
tools, other valuation tools and calculation of terminal values.
Part 2 applies these ideas to typical valuation situations: project/divisional valuation, initial
public offering (IPO) valuation, private equity and leverage-by-out (LBO) valuation,
valuation in high-growth settings and mature cash flow settings. We also explore the
links between valuation tools and the insights these tools offer us to understand
“profitable growth.”
Part 3 explores real options, focusing on how to identify, conceptualize, and value them.
Part 4 gets into cross-border valuation, with particular emphasis on understanding the roles of
exchange rates and country risk. We also look at valuation in (and from the point of view
of) emerging market settings.
Part 5 consists of group report presentations.
Required Textbook:
Damodaran, Aswath, Investment Valuation: Tools and Techniques for Determining the Value of
any Asset, University Edition, 3rd Edition, Wiley Publishing, 2012, ISBN: 978-1-1181-3073-5.
Additional Reading:
Koller, Goedhart, and Wessels, Valuation: Measuring and Managing the Value of Companies,
John Wiley & Sons, 5th Edition, 2010.
Requirements:
The most important requirement of firm valuation is the preparation for discussion in class, the
assigned reading material, problem sets, or cases. It means that students and their group will
work on the numbers/spreadsheets. Class may sometimes start with someone being called upon
to lead off the discussion (or a study group to present the results of their case analysis, if
appropriate).
It is strongly recommended that students prepare for every class, whether or not there is a group
assignment. Not doing so may constrain student’s ability to follow all of the issues we cover in a
typical session.
Group Project on Valuation and Accounting Analysis:
Students in the class are divided into groups (Group size should not exceed five). The course
requires students and their group to work on, write up, present, and submit a substantive
valuation project based on a recent real-life example involving an acquisition of a ‘target firm’
(or a portion of it) by an ‘acquiring firm.’ While I would be happy to make suggestions, I
encourage students to find one that makes sense for them, given their particular industry or
career interests. As the economy and the markets are rebounding, merger and acquisition
activities are on the upswing again. Students should have little difficulty in finding an interesting
one to work on.
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Guidelines for company picks:

I recommend that students avoid analyzing a bank, insurance company, or any other type
of financial institution.

I suggest students pick a company that has at least 5 years of historical financial
statements and stock market information (returns).

Foreign companies are welcome, but they are often more challenging to analyze. But,
students are welcome to go for it!
The main requirement of the project will be a detailed valuation of a target firm or division,
but students’ analysis must also contain discussion and evaluation of:
1. the acquiring firm: its business and recent financial performance;
2. the target firm: its business and recent financial performance;
3. the acquiring firm’s stated strategic and business logic for the acquisition;
4. the price paid and medium of exchange used;
5. the impact of any major, additional outcome-determining factors–for example, regulatory
issues; contingent payment commitments; caps or floors in pricing; real options;
exchange rate effects; country risk effects; potentially interesting corporate governance
issues; government-to-government or cross-cultural issues;
6. relevant multiples and premiums paid in precedent transactions;
7. detailed spreadsheet valuation of the target firm, with clearly articulated assumptions on
valuation methodology, cash flows, cost of capital;
8. assessment of the acquisition from the standpoint of all the above, most especially the
price paid and the medium of exchange used; and
9. specifically, at the end of study of the transaction, the primary question students should
answer is: “at the time of the acquisition announcement, given the facts known then,
would they have recommended that the acquisition take place at the price offered. Why,
or why not?”
The final report should not exceed 15 pages long including exhibits. Text should be
double-spaced, with font size of at least 12. A hard copy of the report should be
submitted for grading. The due date for the report and the date of class presentations will
be announced on the first day of the class.
Grading:
There will be four group write-ups required, and I will inform students of the details sufficiently
in advance of the sessions. There will be a take-home exam approximately two-thirds way
through the course. If a group write-up assignment is not turned in, that will necessarily count for
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a zero grade. The exam is take-home, open book, open notes, and should reflect solely student’s
individual efforts. More details will be given in the class, well in advance of the deadline. The
grading system is:




Class Participation
Written Assignments
Exam
Group project write-up and presentation
20%
20%
30%
30%
Please note that class participation is an earned grade in this course. (Students do get five out of
the 20 points for just showing up!). The metric I use to judge the quality of contributions in the
classroom is very simple: At the end of every class, I ask, “by dint of his/her contributions to the
class that day, did the person, to the best of my judgment, have a positive effect on advancing the
learning of the others in the classroom?”
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