Masters of Business Administration
Finance 7311
Corporate Financial Planning
Spring 2000
Text: Chew, The New Corporate Finance, 2nd Edition, and Higgins, Analysis for Financial Management. ; I will provide copies of the cases to each group.
Office hours: T, Th 4:00 - 6:00, or by appointment; ph 569-8872 , or E-Mail
E-Mail: haterry@ualr.edu; (or go to my homepage under UALR's homepage)
The purpose of this course is twofold. One is to introduce students of finance to the skill of managerial decision making - in essence to teach them how to apply financial theory and tools to real life business situations. After defining the problem, gathering data, and analyzing the data, financial managers must then convincingly communicate their recommendations to others, some of whom may know nothing about finance. The second purpose is to expose students to more advanced finance issues or topics which are not covered in the introductory course.
This course will involve a mixture of lectures, readings and case study. A major difference from other finance courses and source of frustration to students is the apparent lack of guidance and structure. This is because real world problems seldom come with guidance or structure. The only way to learn how to analyze cases is by actually doing them.
Course Design:
A major feature of the course is group presentations of cases. Groups will also present the readings to the class. There will be a mid-term and final exam. Most group presentation cases will be preceded by either a lecture on the relevant financial theory, or by working through a related case. Students will be expected to have worked through the related cases and be prepared to discuss them in class It is essential that you actively participate in class.
More specifically:
i) each group will work through every group presentation case; one (or more) group(s) will present the case to the class. The presenting group should prepare transparencies or use a PowerPoint presentation.
ii) each group will hand in a write-up of its analysis; limit it to 4 pages, double spaced, excluding numerical analysis. English composition counts!
Grading: (tentative)
Class participation: 10%
Group presentations (cases & readings) 30%
Mid term exam 30%
Final exam 30%
Tentative course outline
(Case - handout; HG - Higgins text; G - Class as a group; C - Chew text)
1. Introduction (Review of Fin. 7310) HG 5,7
Introduction, C pgs: xv-xxiv
Time Value of Money
Interest rates, risk and return
Efficient markets C-4, C-5
Model of the corporation
2. Financial Statements & Ratio Analysis HG 1,2
Sample Apparel Case G
3. Pro-Forma Financial Statements & Cash Budgeting HG 3, 4
Higgins Chapter 4, Problems 5 & 6
Sample Apparel Case G
Case 1
4. Capital Structure, Cost of Capital & L-T Financing HG 5,6,8
C - 14, 15, 16, 21, 23
Sample Capital Structure Case - G
Case 2
Case 3 - Hamaker Water Co.
Mid-Term Exam March 16
5. Valuation I - Capital Budgeting HG 7,8
C - 8, 9, 11, 13
Sample Capital Budgeting problem G
Case 4
6. Valuation II - The Business HG 9
Sample Business Valuation case G
Case 5
Case 6
7. Market for Corporate Control and Other Topics
C - 44, 45, 46, 47, 48, 49, 52, 53, 33, 38, 40, 43
Review & Final Exam - May 4, 6:00 - 8:00 PM
Topics Covered
Although the course involves primarily the case method, as mentioned above there will be lecture and discussion of many more topics than are found in the cases alone. These are more advanced finance issues than those presented in the introductory finance course. A successful student in this class should come away with a good understanding of the following topics or issues:
• Basic financial tools (review)
Statement of Cash flows
Ratio Analysis
Pro Forma's
Cash Budgets
• Capital Structure and cost of capital
Theory
Practical Considerations (rating agencies, mkt. conditions, etc.)
• Initial Public Offerings (IPO's)
• Dilution Issues
• Agency Theory
• Dividend Policy
• Capital Budgeting
• Valuation & Acquisitions
Theory
Practical Considerations and evidence
• LBO's
• Restructuring
• International considerations
• Risk Management
Students with Disabilities. It is the policy of UALR to accommodate students with disabilities, pursuant to federal and state law. Any student with a disability who needs accommodation, for example in seating placement or in arrangements for examinations, should inform the instructor at the beginning of the course. The chair of the department offering this course is also available to assist with accommodations. Students with disabilities are also encouraged to contact the Office of Disability Support Services, which is located in the Donaghey Student Center, Room 103, telephone 569-3143.
'Attendance Policy: Attendance is highly recommended.
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