Villanova University
Villanova School of Business
MSF 8620 – Applied Corporate Finance
Fall 2010
Instructor: Dr. Shelly Howton
Phone: (610) 519-6111
Office Hours: MW 12:00-1:15
Office: 3012 Bartley
email: shelly.howton@villanova.edu
www.homepage.villanova.edu/shelly.howton
Required Materials:
1. Investment Banking. Rosenbaum and Pearl.
2. custom published selected chapters of Valuation for Mergers, Buyouts, and Restructuring. Arzac.
3. Harvard Business Cases and Simulations
Course Prerequisites: This course is open only to students currently enrolled in the Master of Science in
Finance program who have successfully completed all prior classes in the program. If at any time during the
semester it is determined that a student has not completed the prerequisites, the student can be
administratively dropped from the course without credit or tuition refund.
Course Description: A survey course in corporate finance with applications to investment banking. It
develops an understanding of fundamental concepts and theories in finance and applies them to a wide range
of practical business problems including those related to the financial services industry. Topics addressed in
the course include free cash flow and valuation, cost of capital, capital structure, acquisition financing,
mergers, leverage buyouts, recapitalizations, and asset restructuring. The applications of these concepts
occurs through case analysis and problem sets prepared in some cases by groups and at times by individual
students.
Teaching Methodology: In this course there will be an emphasis on applying concepts presented in both this course
and previous courses to practical business situations. Students are expected to complete all assignments and readings
prior to class. The course will combine lecture with problem-solving in which students are regularly asked to present
cases, review academic articles, and participate in applied problem-solving discussions.
Academic Integrity Policy: The code of Academic Integrity of Villanova University addresses cheating,
fabrication of submitted work, plagiarism, handing in work completed for another course without the
instructor’s approval, and other forms of dishonesty. For the first offense, a student who violates the Code of
Villanova University will receive 0 points for the assignment. The violation will be reported by the
instructor to the Dean’s Office and recorded in the student’s file. In addition, the student will be expected to
complete an education program. For the second offense, the student will be dismissed from the University
and the reason noted on the student’s official transcript.
Disability Policy: It is the policy of Villanova to make reasonable academic accommodations for qualified
individuals with disabilities. If you are a person with a disability, please contact me after class or during
office hours and make arrangements to register with the Learning Support Office by contacting 610-5195636 or nancy.mott@villanova.edu as soon as possible. Registration is needed in order to receive
accommodations.
Grading Policy and Course Requirements: The final course grade will be based on exams,
homework/cases, and class participation. The grades will be weighted as follows:
Exam 1
Exam 2
Homework/Cases
Participation
30%
30%
30%
10%
If class is missed for any reason, it is the student’s responsibility to ask about any missed work and
assignments. All material needs to be prepared prior to when it is scheduled to be covered. All assignments
are due at the beginning of the class period for which they are assigned and will not be accepted late. Except
for a documented medical emergency, missed exams will result in a grade of zero and makeup exams will
not be given. In the case of a documented emergency, the student will be given a different exam than the one
taken by the class.
Homework/Cases: Some homework and assigned cases are to be completed in groups and some will need to
be done individually. Students will be given advance notice of which homework must be done individually,
and they are expected to adhere to this notice. Students completing homework with others in the class when
the homework is assigned for individual completion are in violation of the University Academic Integrity
Policy.
Speakers: Several times during the semester an outside speaker will be presenting in class. The material
presented during these sessions will be included as potential exam material unless otherwise noted.
DATE: Week of
8/23
8/30
9/6
9/13
9/20
9/27
10/4
10/11
10/18
10/25
11/1
11/8
11/15
11/22
11/29
12/6
TOPIC
M&A Sale Process (Rosenbaum, Ch.6 pp. 251-268)
Jensen (1986) “Agency Costs of Free Cash Flow, Corporate Finance, and
Takeovers.”
Comparable Companies (Rosenbaum, Ch.1)
Forecasting and Valuation of Free Cash Flows (Arzac, Ch.2.1-2.5)
Assignment: Teaser.
No Class on 9/6
Forecasting and Valuation of Free Cash Flows (Arzac, Ch. 2.1-2.5)
HW Problems: 1,2,5, 8, 9.
Discounted Cash Flow Analysis (Rosenbaum, Ch. 3)
Equity Premium and the Cost of Capital (Arzac, Ch. 3)
HW Problems: 2, 3, 7, 8, 9
Valuation with Changing Capital Structure (Arzac, Ch. 6.1-6.6)
HW Problems: 1, 3, 4
Valuation with Changing Capital Structure (Arzac, Ch. 6.1-6.6)
HW Problems: 1, 3, 4
Debt Capacity for Acquisition Financing (Arzac, Ch. 7)
HW Problems: 1, 2, 4, 5
No Class this week – Fall Break
Mergers and Acquisitions (Arzac, Ch. 9.1-9.2 and 9.5-9.12)
HW Problems: 1, 2, 3, 6, 8, 9
Exam #1 on 10/20
Mergers and Acquisitions (Arzac, Ch. 9.1-9.2 and 9.5-9.12)
HW Problems: 1, 2, 3, 6, 8, 9
Conrail A&B Cases
Leveraged Buyouts (Rosenbaum, Ch. 4)
Leveraged Buyouts (Arzac, Ch. 13)
HW Problems: 1,4
Wine Country Simulation assigned
LBO Analysis (Rosenbaum, Ch. 5)
Wine Country Simulation
Hertz A Case (LBO)
Exam #2 on 12/1
Hertz B Case
Final project/case assigned (12/8) – Ducati and Texas Pacific LBO
The dates above are tentative and may be changed at the instructor’s discretion. The date of coverage may differ from that
shown above depending on the availability of speakers. Topics related to a speaker’s discussion may require that some
chapters are covered earlier in the semester and others later than scheduled. Students will be notified of any changes in
material covered prior to the due date. Homework problems will be assigned for each chapter throughout the semester to
be prepared and handed in on dates given in class. They will not be accepted late.