Management 231E William M. Cockrum Monday 1:00 - 4:00 p.m., 4:00 - 7:00 p.m.

, Room A301 Managing Finance and Financing the Emerging Enterprise BACKGROUND:

Fall 2009

This course has the objective of reviewing the financial, control, and investment opportunities faced by rapidly growing companies in entrepreneurial settings. The main objective of study is to consider and select financing vehicles which are appropriate to securing the organizations' money requirements and to understand and analyze the issues in the institutional framework in which those decisions take place. TEXTS: 1. 2. Academic Publishing Services (APS) reader - Techniques of Financial Analysis, Helfert, 11th edition, Irwin, 2003. Academic Publishing Services (APS) binder - available at Lu Valle Commons.

SUPPLEMENTARY MATERIAL: 1. 2. The Art of Case Analysis, Robert Ronstadt, is a suggested reading. Corporate Financial Analysis, 7th edition, Diana Harrington, Irwin, 2004.

3. Prospectus from and articles about current financings will also be used as supplementary case assignments. ORGANIZATION: The classroom work will be based upon case materials. Initial classes will consider cases emphasizing various sources of financing, including short and long-term debt, subordinated capital, and equity. Public and private financing, on and off balance sheet capital, and tax oriented financing will also be included. Later and final cases will emphasize the selection and trade-offs of financing vehicles with company progress and market conditions. Analysis of different institutional regimes and the reasons for particular anomalies in pricing and availability in the financing of small and growing enterprises will be considered against views of markets and corporate finance. REQUIREMENTS: Students will be expected to analyze cases for classroom presentation and discussion. Each class will consider the assigned materials with four questions in mind: 1. 2. 3. 4. How can the company be financed? What is the attractiveness of the financing or investment to the investor? Can improvements be made in the enterprise which could enhance or facilitate its financing? What planning for alternative forms of financing can be assumed as market environments change?

231E\syllabus-Fall09

Management 231E Fall 2009 Page 2

Students should come to class prepared to present their conclusions about the assigned materials from each of the viewpoints outlined above. Adequate preparation is assumed. Students are strongly encouraged to work with classmates in developing solutions to these exercises. Students can expect attendance to be taken. ASSESSMENT: Grading is based on the following proportions: Basis Class participation and attendance Examination Relative performance in the class will be a criterion for grading. COURSE ASSISTANT: Students are encouraged to meet the course assistant who will meet with students as required in Suite D304C. OFFICE HOURS: An appointment with the course assistant or me can be made by calling 794-5978 to arrange for a time to see us on Mondays between 11:00 a.m. - 1:00 p.m. FIRST CLASS: The first class will meet and have classroom preparation expected on Monday, September 28, 2009. FINAL: Final for this class will be at 1-4 PM and 4-7 PM on December 4, 2009. ATTENDANCE: This course requires 10 class sessions. Anyone enrolling should note that the first class is September 28th. The Final will be on Friday, December 4, 2009. Amount 67% 33% 100%

Management 231E Fall 2009 Page 3

231E\syllabus-Fall09

DATE 9/28

SESSION 1

TOPIC A Systems Context for Financial Management - Assessing Financial Health of the Firm (9-201-077) Supplements section Managing Operating Funds - Note on Bank Loans Trade vs. Bank Debt Case: Clarkson Lumber Company Bank Financing Case: Toy World, Inc. - Relations with capital suppliers - Note on the Financial Perspective: What Should Entrepreneurs Know? (9-293-045) Assessment of Business Performance Projection of Financial Requirements Short Term vs. Long Term Debt Case: SureCut Shears, Inc. Capital Structure Theory Case: Hampton Machine Tool Company Capital Structure Choices: Debt/Equity Case: Barr A

ASSIGNMENT HELFERT 1-44 APS - Readings APS HELFERT 45-105 APS - Readings APS APS APS - Readings APS - Readings HELFERT 107-169 HELFERT 171-208 APS APS APS HELFERT 355-387 APS APS APS APS APS

10/5

10/12

10/19

Analysis of Financing Choices Cash Budgeting Case: Science Technology Company (1985) Debt, Financing Stock, Issuance Debt, Convertible Case: Crown Corporation Lease vs. Debt Case: Midwest Communications, Inc. Debt Policy/Financing Case: Automobiles - Automotive News: Forecast 84 First half class summary

10/26

Management 231E Fall 2009 Page 4

231E\syllabus-Fall09

11/2

Trade Credit/Financing Case: Carrefour Expansion,Trade Payable/Financing Expansion Case: OM Scott - The Financial Perspective: What Should Entrepreneurs Know? Cost of Capital and Business Decisions - Valuation and Discounted Cash Flows - Diversification, Capital Asset Pricing Model - Leveraged Betas and the Cost of Equity Long Term Debt vs. Equity Case: Systems Engineering Laboratories, Inc. Financing in Crisis Case: Transcon International (1981, 1982) Financing an Acquisition Case: Management Buyout at Helmets, Inc. L.T. Financing Alternatives Case: Vail Cable Communications, Inc. - Note on Financial Contracting: Deals - Whats It Worth? A General Managers Guide to Valuation Venture Capital vs. Private Equity Case: Apax Partners and Dialog Semiconductor Case: How Venture Capitalists Evaluate Potential Venture Opportunities Comprehensive Case Case: Winco Distribution Co. Public Offering Case: Oakley MFB Summary and Review - A Note on the Initial Public Offering Process - Sahlman - Class Session #31 - The Value-Adding CFO: An Interview with Disneys Gary Wilson - How Entrepreneurs Craft

APS APS APS - Readings HELFERT 325-354 APS - Readings APS Readings APS Readings APS APS APS APS APS - Readings APS - Readings

11/9

11/16

11/23

APS APS APS APS APS - Readings APS - Readings APS - Readings APS - Readings

11/30

10

12/4 11 FINAL EXAM *All assignments should be completed prior to class meetings.

231E\syllabus-Fall09

Management 231E Reading List

1. 2. 3. 4. 5. 6.

"Corporate Finance", Ross, Westerfield, Jaffe, 7th edition, 2005, Irwin. "Fundamentals of Financial Management", Van Horne, Wachowicz, 12th edition, 2005, Prentice Hall "High Tech Start Up", Nesheim, 2000, Simon & Schuster Inc. "Intermediate Accounting", Kieso, Weygandt, 11th edition, 2003, John Wiley & Sons "Principles of Corporate Finance", Brealey & Myers, 7th edition, 2003, McGraw Hill "Security Analysis", Graham & Dodd, classic 1934 edition, 1997, McGraw Hill

231E\syllabus-Fall09