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FIN 4414

Financial Management

Course Syllabus
Fall 2010 Term

INSTRUCTOR:

Dr. T. Craig Tapley, DBA


Graham-Buffett Master Lecturer of Finance

Section: 2761 – Monday and Wednesday, Periods 3-4 ( 9:35 a.m. – 11:30 a.m.)
Section: 2762 – Monday and Wednesday, Periods 5-6 (11:45 a.m. – 1:40 p.m.)
Room: 102 Stuzin Hall

Office Hours: Mondays and Wednesdays (2:00 p.m. - 3:00 p.m.)

CONTACT INFORMATION:

Office: 329 David Stuzin Hall


Phone: (352) 392-6654
Fax: (352) 392-5237
E-Mail: ctapley@ufl.edu

Class Webpage: http://vista.courses.ufl.edu/

COURSE MATERIALS:

TEXTBOOK

1. Financial Management: Theory and Practice (12th Edition), Eugene F. Brigham and Michael C.
Ehrhardt, Thompson/South-Western, 2008, ISBN: 0-324-42269-5.

The official textbook for the class will be an excellent reference book as you start your career, as you
may easily find that there will be times, on the job, when you need to reference prior material, or
formulas, covered in your corporate finance classes at UF.

However, books have become somewhat expensive, so you may, instead, purchase the 11th or 10th
Edition of the book, typically at a cheaper price, through various online booksellers. However, there
are minor differences between the 10th, 11th, and 12th editions; mainly in the order of the chapter.
These differences should not impact your ability to perform well in this class, but you may need to
map the chapters in the 10th or 11th Edition to those assigned in the 12th Edition. This is your
responsibility, not mine.

You may also use the textbook used in FIN 3403: Fundamentals of Financial Management (12
Edition), Eugene F. Brigham and Joel F. Houston, Thompson/South-Western, 2010. Like above,
you may also purchase the 11th or 10th edition of this book. Although not as detailed in places as the

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 1 of 30 Pages
Theory and Practice textbook, you may find that this book will meet most of your needs when
reviewing the material we will cover in class.

CASES / NOTES (Packet Available at Target Copy Center)

1. “A Note on Team Process”, Maria T. Farkas and Linda A. Hill, Harvard Business School Note #9-
402-032, Harvard College, 10/4/01, 17 Pages.

2. “Body Shop International Plc 2001: An Introduction to Financial Modeling”, Robert M. Conroy and
Robert F. Bruner, Darden Graduate School of Business Administration Case #UVA-F-1349,
University of Virginia, Revised 10/8/2001, 18 Pages.

3. “Panera Bread Company”, Marc Lipson, Darden Graduate School of Business Administration Case
#UVA-F-1575, University of Virginia, 2008, 8 Pages.

4. “Warren E. Buffett, 1995”, Robert F. Bruner, Darden Graduate School of Business Administration
Case #UVA-F-1160, University of Virginia, Revised 12/2001, 19 Pages.

5. “Value Creation, Net Present Value and Economic Profit”, Robert S. Harris, Darden Graduate
School of Business Note #UVA-F-1164, University of Virginia, 1/10/1997, 16 Pages.

6. “Valmont Industries, Inc.”, Jay Caver, Jennifer Hill, Kenneth Eades, Darden Graduate School of
Business Administration Case #UVA-F-1191, Revised 2/2004, 21 Pages.

7. “Clarkson Lumber Company, Harvard Business School Case 9-297-028, Harvard College, Revised
10/96, 6 Pages.

8. "The O.M. Scott & Sons Company", Harvard Business School Case #9-209-102, Harvard College,
Revised 02/84, 11 Pages.

9. “Texaco Aviation Transport Services (A)”, Susan Bowen and Mark E. Haskins, Darden Graduate
School of Business Administration Case #UVA-G-0539, University of Virginia, Revised 11/12/1998,
9 Pages.

10. “Boeing 777”, Dena Gollish and Robert F. Bruner, Darden Graduate School of Business
Administration Case #UVA-F-1017, University of Virginia, Revised 11/97, 26 Pages.

11. “Euroland Foods S.A.”, Robert F. Bruner and Casey S. Opitz, Darden Graduate School of Business
Administration Case #UVA-F-1356, University of Virginia, 11/27/2001, 12 Pages.

12. “Glaxo Italia S.p.A:The Zinnat Marketing Decision”, Robert F. Bruner, Darden Graduate School of
Business Administration Case #UVA-F-1014, University of Virginia, Revised 01/98, 22 Pages.

13. “Kota Fibres, Ltd.”, Robert F. Bruner and Thien T. Pham, Darden Graduate School of Business
Administration Case #UVA-F-1359, University of Virginia, 2001, 18 Pages.

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 2 of 30 Pages
14. “Project Financing: An Economic Overview”, Robert F. Bruner, Herwig Langohr, and Anne
Campbell, Darden Graduate School of Business Administration Note #UVA-F-1035, University of
Virginia, Published 2/8/1995, 12 Pages.

15. “Euro Disneyland S.C.A.: The Project Financing”, Robert F. Bruner, Herwig Langohr, and Anne
Campbell, Darden Graduate School of Business Administration Case #UVA-F-1034, University of
Virginia, Revised 4/98, 17 Pages.

16. “Methods of Valuation for Mergers and Acquisitions”, Susan Chaplinsky, Michael J. Schill, and Paul
Doherty, Darden Graduate School of Business Note #UVA-F-1274, University of Virginia, Revised
7/04, 19 Pages.

17. “Crocs, Inc.” Marc Lipson and Gaurav Gupta, Darden Graduate School of Business Case #UVA-F-
1589, University of Virginia, 8/20/2009, 17 Pages.

18. “General Mills’ Acquisition of Pillsbury from Diageo PLC”, Robert F. Bruner, Darden Graduate
School of Business Administration Case # UVA-F-1326, University of Virginia, 2001, 14 Pages.

19. “JetBlue Airways IPO Valuation”, Michael Schill, Darden Graduate School of Business
Administration Case #UVA-F-1415, University of Virginia, 8/04, 20 Pages.

20. “Polaroid Corporation, 1996”, Robert F. Bruner and Susan Chaplinsky, Darden Graduate School of
Business Administration Case #UVA-F-1181, University of Virginia, Revised 06/98, 20 Pages.

COURSE OVERVIEW:

I have taught this course in the past as an applied case course with a review of introductory material, as well
as a discussion of additional finance theory not covered in the introductory course. I will continue to follow
this format. The great strength of the case method is that it confronts you with a realistic problem that may
be ill-structured, important data may be missing and/or unobtainable, and you may not even be able to see
what the problem is without extensive analysis. Imparting structure to the problem and learning how to get
around missing data are important things to know, so this course should be a learning, although at times a
frustrating, experience for you. Equally important though, I intend for you to go beyond finding "the answer"
to the case problem: I expect you to analyze the implications of "the solution" for the long-run health of the
company, determine what could happen if your analysis is wrong and how to position the company to
minimize possible disruptions if this occurs. This is STRATEGIC FINANCIAL MANAGEMENT, and I will
expect you to spend considerable time looking at this dimension: you will find very early on that without
using a spreadsheet program, like Excel, it will not be possible to do a thorough analysis in a reasonable
amount of time.

Because the primary focus of the case analyses will not be on getting "the answer," per se, there will be less
emphasis on what you say in your case presentations, analyses, and during-class write-ups and more on
how you say it. It is possible that several cases to be analyzed in this course have been used by other
instructors, so "answers" may be available from informal sources. I ask you not to utilize these shortcuts
because (a) knowing "the answer" will not increase your grade on the case, and (b) taking shortcuts could
hurt you significantly in terms of what you obtain from this course. That is, if you have not agonized through
the case and used all of your mental reasoning to try to come to grips with the situation, you will not discover

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 3 of 30 Pages
all of the traps and blind alleys that can lead you astray. It would be a very expensive lesson if you were
forced to learn these in the "real world", where "the answer" is a bit more important and where you will not
be able to find it through someone else's prior work.

TEAM ASSIGNMENTS:

In an attempt to ease the workload, to create synergy through small group interactions, and to create a
multi-tasking environment, each student will be randomly assigned to three separate team groups: (1) Case
Evaluation and Current Topic Teams 1-8, (2) Case Evaluation Teams 9-16, and (3) Company Analysis
Teams 17-24. Therefore, each class will have three groups of eight teams, with 3-4 students on each team.
Responsibilities of the teams include:

1. Case Evaluation Teams (you will be a member of 2 Team Groups: 1-8 and 9-16): Each case team
must present a case in class (see Page 20 for details). These presentations will be videotaped and
all members of the team must take part in the presentation.

2. Case Evaluation Teams (you will be a member of 2 Team Groups: 1-8 and 9-16): Each case team
must review the videotapes of the team's presentations and provide written critiques within 1 week of
the presentations.

2. Case Evaluation Teams (you will be a member of 2 Team Groups: 1-8 and 9-16): Each case team
must provide the instructor with a written, full case analysis, at the start of class, of the cases the
team is to present (see Page 22 for format).

3. Case Evaluation Teams (you will be a member of 2 Team Groups: 1-8 and 9-16): Each case team
must provide the instructor with written case summaries for all cases so marked (see Page 25 for
format).

4. Current Topic Teams (you will be a member of 1 Team Group: 1-8): During the week of October
25th, pairs of teams will get a chance to research, present, and lead a discussion on a current
financial topic of interest to the members of the team.

5. Company Analysis Team (you will be a member of 1 Team Group: 17-24): Each company analysis
team must perform a strategic corporate analysis of an S&P 500 company, create a “Pitch Book”,
and then pitch their buy/sell recommendation (see Page 21 for details of this assignment).

INDIVIDUAL ASSIGNMENTS:

Three things will also be required individually of each student:

1. Each student will be required to attend all classes and actively participate in case discussions
(regardless of whether your team is presenting that day), lectures, and other activities that may be
assigned by the instructor. There will be a seating chart and attendance will be taken. Please note,
however, that, in terms of participation, I prefer quality to quantity. In fact, high quantity without
corresponding quality will lead to a negative response on my part when it comes time to assign
grades. Also note that I realize that, as graduating seniors, many of you will have other

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 4 of 30 Pages
commitments that may arise during the term (job interviews, etc.) --- I will allow students to miss 1 or
2 classes as long as they can provide me with documentation of a valid reason for missing.

2. In addition to regular class participation, students may be required, on a random basis, to complete
short, in-class write-ups or presentations of the chapters, cases, or readings assigned for the day
(grading weights, see below, will be changed to accommodate this if it occurs). Although I do not
intend at this time to set a page limit on the write-ups, they should be concise. Again, please note
that I prefer quality to quantity.

3. Each student will be required to complete two midterm exams to be held, in class, on October 20th
and December 1st. There will be no excused absences from these exams. Your best exam will
count for 25 percent of your grade, while your worst exam will count for 15 percent of your grade.

For extra credit, students may read and review one of the books listed at the end of this syllabus (see Page
25 for a partial list), or get my approval for an alternative selection. Book reviews will be due at the start of
class on Monday, November 29th. Bonus points (up to 3 points) will be awarded based on the quality of the
write-up.

GRADING:

Course grades will be calculated using the following weights:

Case Teams (1-8): Case Presentations/Written Analyses/Critiques 10%


Case Teams (9-16): Case Presentations/Written Analyses/Critiques 10%
Case Teams (1-16): Case Summaries 15%
Current Topic Teams (1-8): Current Topic Discussion 5%
Company Teams (17-24): Company Analysis & Pitch Book 10%
Individual: Class Participation 10%
Individual: Midterm Exams (25% and 15%) 40%
100%

Individual: Extra Credit Book Review 3%

You should note that a large portion of your course grade (50%) will be a function of the performance of your
team. It may bother you that you will not have direct control over this portion of your grade, but it may also
induce you to see that the team performs well. At the least, it is realistic, as you are usually faced with this
problem in business: your performance is in part a function of other people. As a check, and to discourage
a person from letting the other members of the team do all of the work, there will be a confidential peer
evaluation at the end of the course (see Page 30 for a sample evaluation). I assure you that if you do not
contribute your fair share your fellow team members will let it be known. Please note, I reserve the right to
lower (or raise) an individual's course grade (by any amount) based on these evaluations. This is only fair: if
you do not work as hard as other members of the team, then you should not expect to share fully in the
team's grade.

You should also note that the Finance department has specified a grading range for all upper-level finance
courses. The range for FIN 4414 is 3.1 to 3.5, with an expected grade point average for the class of 3.30.

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 5 of 30 Pages
Final course grades will be adjusted at the end of the term so that the average grade point average for the
class falls within this range and the grade assigned will be based on your class rank.

ACADEMIC HONESTY GUIDELINES:

The following is from the University of Florida Code of Student Conduct:

The academic community of students and faculty at the University of Florida strives to
develop, sustain and protect an environment of honesty, trust and respect. Students are
expected to pursue knowledge with integrity. Exhibiting honesty in academic pursuits and
reporting violations of the Academic Honesty Guidelines will encourage others to act with
integrity. Violations of the Academic Honesty Guidelines shall result in judicial action and
a student being subject to the sanctions in paragraph XI of the Student Conduct Code.
The conduct set forth hereinafter constitutes a violation of the Academic Honesty
Guidelines (University of Florida Rule 6C1-4.017).

Cheating. The improper taking or tendering of any information or material which shall be
used to determine academic credit. Taking of information includes, but is not limited to,
copying graded homework assignments from another student; working together with another
individual(s) on a take-home test or homework when not specifically permitted by the
teacher; looking or attempting to look at another student's paper during an examination;
looking or attempting to look at text or notes during an examination when not permitted. The
tendering of information includes, but is not limited to, giving of your work to another student
to be used or copied; giving someone answers to exam questions either when the exam is
being given or after taking an exam; giving or selling a term paper or other written materials
to another student; sharing information on a graded assignment.

Plagiarism. The attempt to represent the work of another as the product of one's own
thought, whether the work is published or unpublished, or simply the work of a fellow student.
Plagiarism includes, but is not limited to, quoting oral or written materials without citation on
an exam, term paper, homework, or other written materials or oral presentations for an
academic requirement; submitting a paper which was purchased from a term paper service
as your own work; submitting anyone else's paper as your own work.

So that there is no confusion, here are my expectations:

1. Students are strongly encouraged to work with their classmates to study, work problems and cases,
and prepare for classes and exams. The goal here is to maximize your understanding of the
material.

2. Students are expected to include only their own work on the two midterm exams, book reviews, and
on any individual, in-class write-ups. Cheating, as defined above, will not be tolerated.

3. Students are expected to contribute fully to each and every team assignment.

4. Plagiarism, as defined above, is not acceptable.

TENTATIVE SCHEDULE AND READING / CASE / ASSIGNMENT LIST

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 6 of 30 Pages
WEEK 1

Monday – August 23

Topics: Introduction and Overview of Course


__________

Video: Warren Buffet Talks Business


__________

Note: “A Note on Team Process”, Maria T. Farkas and Linda A. Hill, Harvard Business School Note
#9-402-032, Harvard College, 10/4/01, 17 Pages.

Assignment: Read the note above on Team Process. After teams have been finalized on August 30th,
meet with your Case Teams (1-8 and 9-16) and Company Analysis Teams (17-24). Each
team should then write up a 1-page summary of how you hope to structure your team,
interact, complete assignments, and your goals for the semester. Write-ups are due at the
start of class on September 15th.

Wednesday – August 25

Textbook: Chapter 14 - Financial Planning and Forecasting Financial Statements


• Web Extension: Financing Feedbacks
• Web Extension: Advanced Techniques for Forecasting Statements Accounts
__________

Case: “Body Shop International Plc 2001: An Introduction to Financial Modeling”, Robert M. Conroy
and Robert F. Bruner, Darden Graduate School of Business Administration Case #UVA-F-
1349, University of Virginia, Revised 10/8/2001, 18 Pages.

Case File: Case - New Body Shop.xls

Assignment: Work through the exercises in this case, first using pencil and paper and then using your
personal computer. Then follow the directions on the last page of the case to make the
three-year forecast, and think about what your responses to the questions posed on the last
page of the case should be. Bring an electronic copy of your model (disk, zip, memory stick,
etc.) to class and be prepared to present it to the class.
__________

Video: Warren Buffett and Bill Gates

WEEK 2

Monday – August 30

Pictures: Team Pictures at Start of Class

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 7 of 30 Pages
__________

Case: “Panera Bread Company”, Marc Lipson, Darden Graduate School of Business Administration
Case #UVA-F-1575, University of Virginia, 2008, 8 Pages.

Case File: Case - Panera Bread.xls

Questions: Complete the financing portion of Panera Bread Company’s 2007 forecast financial
statements, and provide a forecast for the next five years (note in Exhibit 3 that the amount
of debt, equity, and interest expense is missing; you may assume that taxes will remain at
31,500 for 2007). As an initial (base case) analysis, assume all borrowings are some form of
debt. You may also assume the share repurchase occurs in 2008 and that interest expense
is equal to 6% of outstanding debt. Assume sales growth of 25% for the first two years after
2007 and 5% thereafter. Note that you need not provide a detailed forecast of the current
asset and current liability accounts.

Given the need for external sources of capital, please contrast the desirability of external
equity, a long-term note payable, and a short-term revolving line of credit.

Assignment: Individuals should prepare the “Panera Bread Company” case for in-class discussion. Bring
an electronic copy of your model (disk, zip, memory stick, etc.) to class and be prepared to
present it to the class.

Wednesday – September 1

Case: “Clarkson Lumber Company”, Harvard Business School Case 9-297-028, Harvard College,
Revised 10/96, 6 Pages.

Questions: Why has Clarkson Lumber borrowed increasing amounts despite its consistent profitability?

How has Mr. Clarkson met the financing needs of the company during the period 1993
through 1995? Has the financial strength of Clarkson Lumber improved or deteriorated?

How attractive is it to take the trade discount?

Do you agree with Mr. Clarkson’s estimate of the company’s loan requirements? How much
will he need to finance the expected expansion of sales to $5.5 million in 1996 and to take all
trade discounts?

As Mr. Clarkson’s financial advisor, would you urge him to go ahead with, or to reconsider,
his anticipated expansion and his plans for additional debt financing? As the banker, would
you approve Mr. Clarkson’s loan request, and, if so, what conditions would you put on the
loan?

Assignment: Teams 1-8 should prepare the “Clarkson Lumber Company” case for in-class discussion.

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 8 of 30 Pages
WEEK 3

Monday – September 6

No Class: Labor Day Holiday

Wednesday – September 8

Textbook: Chapter 3 - Financial Statements, Cash Flows, and Taxes


Chapter 4 - Analysis of Financial Statements
__________

Note: “Value Creation, Net Present Value and Economic Profit”, Robert S. Harris, Darden
Graduate School of Business Note #UVA-F-1164, University of Virginia, 1997, 16 Pages.
__________

Case: “Valmont Industries, Inc.”, Jay Caver, Jennifer Hill, Kenneth Eades, Darden Graduate School
of Business Administration Case #UVA-F-1191, Revised 2/2004, 21 Pages.

Case File: Case - Valmont Industries.xls

Questions: Why do you think Valmont’s stock has “fallen out of favor” with Wall Street analysts? Do you
think EVA can solve Valmont’s stock price problem?

Using the financial data in Exhibit 5 and assuming 10% as the WACC and 35% as the tax
rate, compute EVA for Valmont’s business segment for years 1990-1993. What conclusions
can you draw? For example, should Valmont expand or contract Irrigation? Cab you use
EVA to help formulate the strategic direction of Valmont?

How do you interpret the EVAs for the “Corporate” segment of the business? Does it appear
that Valmont allocates corporate overhead expenses to its operating units? Should these
costs be allocated for purposes of computing EVA?

Should Terry McClain recommend that EVA be implemented at Valmont? If so, should he
also recommend that managerial compensation be linked to EVA? Which employees in the
company should be compensated based on EVA?

How would you design the incentive compensation formula for management? For example,
would the formula use EVA or change in EVA as the principle variable? How much of total
compensation should be subject to EVA performance?

Assignment: Teams 1-8 should prepare the “Valmont Industries, Inc.” case for in-class discussion.

WEEK 4

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 9 of 30 Pages
Monday – September 13

Textbook: Chapter 10 - The Cost of Capital


• Web Extension: Estimating Growth Rates
• Web Extension: The Cost of Equity in the Nonconstant Dividend Growth Model
__________

Case: “Warren E. Buffett, 1995”, Robert F. Bruner, Darden Graduate School of Business
Administration Case #UVA-F-1160, University of Virginia, Revised 12/01, 19 Pages.

Questions: What is the possible meaning of the changes in stock price for GEICO and Berkshire
Hathaway on the day of the acquisition announcement? Specifically, what does the $718
million gain in Berkshire’s market value of equity imply about the intrinsic value of GEICO?
(Note that Berkshire owned 33.25 million shares before the acquisitions was announced.)

Based on Value Line’s forecast information, what is the range of possible intrinsic values for
GEICO? What questions might you have about this estimated range?

How well has Berkshire Hathaway performed? In the aggregate? In its investment in Scott
& Fetzer? In its investments in earlier purchases of GEICO stock? In its investment in
convertible preferred securities?

What is the “intrinsic value” in Warren Buffett’s perspective, and why is it accorded such
importance? How is it estimated? What are the alternatives to intrinsic value, and why does
Buffett reject them?

Critically assess Buffett’s investment philosophy, and prepare to identify points where you
agree and disagree with him.

Should Berkshire shareholders endorse the acquisition of GEICO?

Assignment: Teams 9-16 should prepare the “Warren E. Buffett, 1995” case for in-class discussion.

Wednesday – September 15

Case: "The O.M. Scott & Sons Company", Harvard Business School Case #9-209-102, Harvard
College, Revised 02/84, 11 Pages.

Questions: How was Scott able to achieve its rapid growth from a local to a national company? What
are the key factors in its success.

How have the prices of Scott shares moved in the market? Why are they selling so high
relative to earnings and dividends?

Analyze the company's financial condition at the end of 1961. What are its prospects for
future years?

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 10 of 30 Pages
Project specific sales and profit figures for Scott for 1962 and 1963.

What action, if any, should Scott take in relation to its internal operations? to its creditors?

Assignment: Teams 9-16 should prepare the “O.M. Scott & Sons Company” case for in-class discussion.

WEEK 5

Monday – September 20

Textbook: Chapter 11 - The Basics of Capital Budgeting: Evaluating Cash Flows


• Web Extension: The Accounting Rate of Return
• Web Extension: The Marginal Cost of Capital and the Optimal Capital Budget
Chapter 12 - Cash Flow Estimation and Risk Analysis
• Web Extension: Replacement Project Analysis
• Web Extension: Certainty Equivalents and Risk-Adjusted Discount Rates
Chapter 15 - Corporate Valuation, Value-Based Management, and Corporate Governance
__________

Case: “Texaco Aviation Transport Services (A)”, Susan Bowen and Mark E. Haskins, Darden
Graduate School of Business Administration Case #UVA-G-0539, University of Virginia,
Revised 11/12/1998, 9 Pages.

Questions: What makes fractional ownership attractive for Texaco?

How will purchasing a new plane impact deadhead time? What about fractional ownership?
Charter?

Which option provides the best net present value (NPV)? What does a negative NPV
signal?

What are some reasons for not using NetJets’ option? In what ways might you lessen or
monitor the negatives you just listed?

You may use the following base case assumptions when constructing your base case
forecast:

Hours flown per year 400 (round-trip hours)


Flight miles expected yearly 160,000 (round-trip mileage)
Fraction that is deadhead 38%
Fraction desired 37.5%
Monthly fee, FO $28,800
Flight cost per hour, FO $1,576
Excise tax on flight costs FO 10%
Cost premium for over-hours, FO 75%
Additional insurance, FO (yearly) $8,000
Cash outlay for plane, FO $4,005,000
Estimated value of plane at end of 5 years, FO $1,201,500
Depreciation, FO $801,000
Chargeback rate per mile $0.59

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 11 of 30 Pages
Cost per hour, corporate $1,100 (variable costs)
Pilot and maintenance, Purchase (yearly) $229,900
Hangar Costs, Purchase (yearly) $43,800
Administrative costs, Purchase (yearly) $97,100
Insurance, Purchase (yearly) $42,900
Cash outlay for plane, Purchase $10,680,000
Estimated value of plane an end of 5 years, Purchase $3,204,000
Depreciation $2,136,000
Corporate discount rate 14%
Corporate tax rate 40%
Sales tax rate 4%
Inflation rate 2%

Assignment: Teams 1-8 should prepare the Texaco Aviation Transport Services (A) case for in-class
discussion.

Wednesday – September 22

Case: “Boeing 777”, Dena Gollish and Robert F. Bruner, Darden Graduate School of Business
Administration Case #UVA-F-1017, University of Virginia, Revised 11/97, 26 Pages.

Questions: What is the appropriate required rate of return against which to evaluate the prospective
IRRs from the Boeing 777?

• Which beta did you use? Why?


• When you used the capital-asset pricing model (CAPM), which risk premium and risk-
free rate did you use? Why?
• Which capital-structure weights did you use? Why?

Judged against your WACC, how attractive is the Boeing 777 project?

• Under what circumstances is this project economically attractive?


• What does a sensitivity analysis (either the analysis presented in the case or another that
you have done on your own) reveal about the nature of Boeing's gamble on the 777?

Should Boeing have launched the 777 in October 1990?

Assignment: Teams 1-8 should prepare the “Boeing 777” case for presentation and in-class discussion.
Presentation by Case Teams 1 and 2. Case write-ups are due at the start of class. Full case
write-ups by Case Teams 1 and 2. Case summary write-ups by all other teams (1-8).

WEEK 6

Monday – September 27

Case: “Euroland Foods S.A.”, Robert F. Bruner and Casey S. Opitz, Darden Graduate School of
Business Administration Case #UVA-F-1356, University of Virginia, 11/27/2001, 12 Pages.

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 12 of 30 Pages
Questions: Prepare to discuss the strengths and weaknesses of the various measures of investment
attractiveness as used by Euroland Foods. Will all of the measures rank the projects
identically? Why or why not?

Rank the 11 proposals on the basis of purely economic considerations. Then rank them a
second time based on any considerations you believe to be important. Are the rankings
identical? Why or why not?

Which set of projects should Wilhelmina Verdin recommend to the board of Euroland as the
capital budget for 2001?

Assignment: Role-play discussion of case given position assignments below.

Positions Team 1 - Wilhelmina Verdin - President Director-General


For In-Class Team 2 - Trudi Lauf - Finance Director
Discussion: Team 3 - Heinz Klink - Managing Director for Distribution
Team 4 - Maarten Leyden - Managing Director for Production and Purchasing
Team 5 - Marco Ponti - Managing Director for Sales
Team 6 - Fabienne Morin - Managing Director for Marketing
Team 7 - Nigel Humbolt - Managing Director for Strategic Planning
Team 8 - Independent Consultants

Wednesday – September 29

Case: “Glaxo Italia S.p.A.: The Zinnat Marketing Decision”, Robert F. Bruner, Darden Graduate
School of Business Administration Case #UVA-F-1014, University of Virginia, Revised 01/98,
22 Pages.

Case File: Case - Glaxo Italia.xls

Questions: What are the relative advantages and disadvantages of co-marketing arrangements versus
direct sales? Why is Glaxo considering co-marketing for its new Zinnat antibiotic?

Evaluate Glaxo Italia’s criteria for evaluating decisions about sales strategies (i.e., payback
and internal rate of return). What are the strengths and weaknesses of these criteria as
opposed to net resent value? On which criteria would you base your recommendation?

Evaluate the forecast. Are all relevant cash flows present? Are the assumptions
reasonable? Should the cost of new sales recruits be included in the forecast?

If, in response to the question above, you believe the analysis should be modified, do so and
prepare to discuss the results you obtain. What assumptions are the “key drivers” of your
results?

Which marketing strategy should Rottoli recommend?

Assignment: Teams 1-8 should prepare the “Glaxo Italia S.p.A.” case for presentation and in-class
discussion. Presentation by Case Teams 3 and 4. Case write-ups are due at the start of

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 13 of 30 Pages
class. Full case write-ups by Case Teams 3 and 4. Case summary write-ups by all other
teams (1-8).

WEEK 7

Monday – October 4

Textbook: Chapter 9 - Financial Options and Applications in Corporate Finance


• Web Extension: The Binomial Approach
Chapter 13 - Real Options
• Web Extension: The Abandonment Real Option
• Web Extension: Risk-Neutral Valuation

Wednesday – October 6

Case: “Kota Fibres, Ltd.”, Robert F. Bruner and Thien T. Pham, Darden Graduate School of
Business Administration Case #UVA-F-1359, University of Virginia, 2001, 18 Pages.

Case File: Case - Kota Fibres.xls

Questions: How did Mehta construct his financial forecast? Using the financial forecast, prepare to show
the “cash cycle” of the firm (i.e., the flow of funds through the working-capital accounts of the
firm).

Examine the exhibits in the case. On the basis of Mehta’s forecast, how much debt will Kota
need to arrange for the coming year? Will Kota be able to repay the line of credit this year?

Why do Kota’s financial requirements vary across the year? What are the key determinants
of Kota’s borrowing needs? Please exercise the spreadsheet model to identify the critical
forecast assumptions.

Consider the four memos that Pundit received. Use your intuition to assess the desirability of
two of the proposals:

Pondicherry Textile’s request for credit: What will be this proposal’s effects on accounts
receivable and debt balances across the year?

The level-production proposal: If Kota undertakes level production now, at the low point of
the annual business cycle, what is the likelihood of inventory stock-outs at the peak of the
business cycle? If Kota undertakes level production just after the peak, what will happen to
inventory and debt balances at the cyclical low?

Are these proposals likely to relieve, or worsen, Kota’s ability to “clean up” its bank loan by
the end of 2001? What action should Pundit take on these two proposals?

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 14 of 30 Pages
Assess the impact of the other two proposals intuitively and then analyze them with the aid of
the computer-spreadsheet model. What action should Pundit take on these two proposals
(note that the forecasting model incorporates a circular references among the financial
statements)?

The new inventory policy proposal: (Hint: purchases will be a percentage of next month’s
sales, and wages will be a percentage of this month’s purchases.) What effect will this
scheme have on inventory and debt balances? To see whether the effect will be material,
reforecast the financial statements based on an adjustment to the purchases/sales ratio that
produces the desired reduction in the final inventory balance (in the model, purchases drive
wages and, hence, inventory).

Hibachi Chemical’s just-in-time (JIT) proposal: (Hint: assume that this proposal will reduce
35% of the firm’s inventory to about 5% of its former balance.) What will be this proposal’s
effect on inventory and debt balances? To see whether the effect is material, reforecast the
financial statements based on an adjustment to the purchases/sales ratio.

Why does the bank require a 30-day clean-up of the loan? Should the bank continue to
waive compliance with this covenant?

Identify the three most important actions or policies that Pundit should take. What should
she say to the bank? To the customers?

Assignment: Teams 1-8 should prepare the “Kota Fibres” case for presentation and in-class discussion.
Presentation by Case Teams 5 and 6. Case write-ups are due at the start of class. Full case
write-ups by Case Teams 5 and 6. Case summary write-ups by all other teams (1-8).

WEEK 8

Monday – October 11

Video: Daniel Pink: A Whole New Mind

Wednesday – October 13

Note: “Project Financing: An Economic Overview”, Robert F. Bruner, Herwig Langohr, and Anne
Campbell, Darden Graduate School of Business Administration Note #UVA-F-1035,
University of Virginia, Published 2/95, 11 Pages.
__________

Case: “Euro Disneyland S.C.A.: The Project Financing”, Robert F. Bruner, Herwig Langohr, and
Anne Campbell, Darden Graduate School of Business Administration Case #UVA-F-1034,
University of Virginia, Revised 4/98, 23 Pages.

Case File: Case - Euro Disneyland.xls

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 15 of 30 Pages
Questions: In what way will this complex set of transactions affect the Euro Disneyland project? Give
some consideration to these possible areas of change: ownership, financing, managerial
flexibility and control, and risk exposure of various participants.

What will each of the following stakeholders contribute to, and gain from, the Euro
Disneyland project: the government of France, banks, European equity investors, the Walt
Disney Company? What would motivate each of these groups to participate? What steps or
actions must each group take in order to realize the potential benefits from this project?

What might motivate the Walt Disney Company to transform the Euro Disneyland project into
a separate company?

At an offering price of (French francs) FF72 per share, is the equity in Euro Disneyland fairly
valued? Assess the valuation conducted by S.G. Warburg.

In the abstract, what kinds of corporate assets might be split off in this fashion (i.e., rather
than keeping it as a wholly internal project)? Are there other ways in which a corporate asset
like Euro Disneyland might be carved out? Be prepared to sketch these other schemes.

Assignment: Teams 1-8 should prepare the “Euro Disneyland S.C.A” case for presentation and in-class
discussion. Presentation by Case Teams 7 and 8. Case write-ups are due at the start of
class. Full case write-ups by Case Teams 7 and 8. Case summary write-ups by all other
teams (1-8).

WEEK 9

Monday – Ocotber 18

Assignment: Catch-Up Day, If Needed

Wednesday – October 20

Midterm: In-Class Exam

WEEK 10

Monday – October 25

Assignment: During the first hour of class, Teams 1 & 5 will jointly decide upon, research, present, and
lead a class discussion about a current topic/area in finance that is of interest to the
members of the team. During the second hour of class, Teams 2 & 6 will do the same thing.

Wednesday – October 27

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 16 of 30 Pages
Assignment: During the first hour of class, Teams 3 & 7 will jointly decide upon, research, present, and
lead a class discussion about a current topic/area in finance that is of interest to the
members of the team. During the second hour of class, Teams 4 & 8 will do the same thing.

WEEK 11

Monday – November 1

Textbook: Chapter 16 - Capital Structure Decisions: The Basics


• Web Extension: Degree of Leverage
Chapter 17 - Capital Structure Decisions: Extensions

Wednesday – November 3

Note: “Methods of Valuation for Mergers and Acquisitions”, Susan Chaplinsky, Michael J. Schill,
and Paul Doherty, Darden Graduate School of Business Note #UVA-F-1274, University of
Virginia, Revised 7/04, 19 Pages.
__________

Case: “Crocs, Inc.” Marc Lipson and Gaurav Gupta, Darden Graduate School of Business Case
#UVA-F-1589, University of Virginia, 8/20/2009, 17 Pages.

Case File: Case - Crocs.xls

Questions: Which of the comparable companies appear to be a good match to Crocs at the time of the
case? Which would be a good match in five years? Use these multiples to provide
additional estimates of the value of Crocs (in other words, calculate a value for Crocs using a
current multiple, and calculate a value for Crocs using Yeung’s cash flow model but a
terminal value based on the multiple).

What would you consider reasonable, “high”, and “low” growth estimates (median, 25th and
75th percentile growth estimates) for 2008 and for the long run?

Value the company under your best estimate of future growth rates and at a high and low
estimate from the prior question. What changes in the growth assumptions would
rationalize the new Crocs’ stock price?

What is your opinion of the assumed profit margins? What alternative assumptions would
you consider reasonable?

Assignment: Teams 9-16 should prepare the “Crocs, Inc.” case for presentation and in-class discussion.
Presentation by Case Teams 9 and 10. Case write-ups are due at the start of class. Full
case write-ups by Case Teams 9 and 10. Case summary write-ups by all other teams (9-
16).

WEEK 12

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 17 of 30 Pages
Monday – November 8

Textbook: Chapter 18 - Distribution to Shareholders: Dividends and Repurchases

Wednesday – November 10

Case: “General Mills’ Acquisition of Pillsbury from Diageo PLC”, Robert F. Bruner, Darden
Graduate School of Business Administration Case # UVA-F-1326, University of Virginia,
2001, 14 Pages.

Questions: What are General Mills’ motives for this deal? Estimate the present value of the expected
cost savings.

Why was the contingent payment included in this transaction? How does the clawback affect
the attractiveness of the deal from the standpoints of General Mills and Diageo?

How does the contingent payment work? Prepare a payoff diagram (i.e., hockey stick
diagram) of the clawback feature.

What is the contingent payment worth in early December 2000? Be prepared to outline your
assumptions and specific findings.

Is this deal economically attractive to General Mills shareholders? Would you recommend
that shareholders approve or reject this deal?

Assignment: Teams 9-16 should prepare the “General Mills’ Acquisition of Pillsbury from Diageo PLC”
case for presentation and in-class discussion. Presentation by Case Teams 11 and 12.
Case write-ups are due at the start of class. Full case write-ups by Case Teams 11 and 12.
Case summary write-ups by all other teams (9-16).

WEEK 13

Monday – November 15

Textbook: Chapter 22 - Working Capital Management


• Web Extension: Secured Short-term Financing
Web Chapter 27 - Providing and Obtaining Credit
Web Chapter 28 - Advanced Issues in Cash Management and Inventory Control

Wednesday – November 17

Case: “JetBlue Airways IPO Valuation”, Michael Schill, Darden Graduate School of Business
Administration Case #UVA-F-1415, University of Virginia, 8/04, 20 Pages.

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 18 of 30 Pages
Questions: What are the advantages and disadvantages of going public?
How can comparable multiples be used to estimate terminal value? Which multiples and
comparable companies are most appropriate for JetBlue’s valuation?

Do you believe the offer price range of $22 to $24 per share is too low?

Assignment: Teams 9-16 should prepare the “JetBlue Airways IPO Valuation” case for presentation and
in-class discussion. Presentation by Case Teams 13 and 14. Case write-ups are due at the
start of class. Full case write-ups by Case Teams 13 and 14. Case summary write-ups by
all other teams (9-16).

WEEK 14

Monday – November 22

Textbook: Chapter 23 - Derivatives and Risk Management

Wednesday – November 24

Case: “Polaroid Corporation, 1996”, Robert F. Bruner and Susan Chaplinsky, Darden Graduate
School of Business Administration Case #UVA-F-1181, University of Virginia, Revised 06/98,
20 Pages.

Case File: Case - Polaroid Corporation, 1996.xls

Suggested What are the main objectives of the debt policy that Ralph Norwood must
Questions: recommend to Polaroid’s board of directors?
What financing requirements do you foresee for the firm in the coming years? What are the
risks associated with Polaroid’s business and strategy? In your view, what firms are
Polaroid’s peer firms?

Drawing on the financial ratios in case Exhibit 9, how much debt could Polaroid borrow at
each rating level? What EBIT coverage ratios would result from the borrowings implied by
each rating category?

Using Hudson Guaranty’s estimates of the costs of debt and equity in case Exhibit 11, which
rating category has the lowest overall cost of funds? Do you agree with Hudson Guaranty’s
view that equity investors are indifferent to increases in financial risk across investment grade
debt categories?

Is Polaroid’s current maturity structure of debt appropriate? Why or why not?

What should Ralph Norwood recommend regarding:


• the target bond rating;
• the level of flexibility or reserves;
• the mix of debt and equity;

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 19 of 30 Pages
• the maturity structure of debt;
and any other issues you believe should be brought to the attention of the CEO and the
board?

Assignment: Teams 9-16 should prepare the “Polaroid Corporation, 1996” case for presentation and in-
class discussion. Presentation by Case Teams 15 and 16. Case write-ups are due at the
start of class. Full case write-ups by Case Teams 15 and 16. Case summary write-ups by
all other teams (9-16).

WEEK 15

Monday – November 29

Assignment: Catch-up Day, If Needed.


__________

Assignment: Book Review for Extra Credit (Due at the Start of Class).

Wednesday – December 1

Midterm: In-Class Exam

Friday – December 3

Assignment: Electronic copy of “Pitch Books” due by noon.

WEEK 16

Monday – December 6

Assignment: Hard copy of “Pitch Books” due from all teams (Company Analysis Teams 17-24) at the start
of class.

Company Analysis and Pitch-Book Presentations (Company Analysis Teams 17-20).

Wednesday – December 8

Assignment: Company Analysis & Pitch Book Presentations (Company Analysis Teams 21-24)

TEAM CASE PRESENTATIONS:

For each of the 8 formal case presentations, two case teams will make formal, professional presentations
side-by-side. The basic format is as follows. Each of the two teams will play the role of competing

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 20 of 30 Pages
consulting companies brought in to analyze the situation for the firm. The audience will play the role of the
firm’s senior managers or investors. The audience is expected to ask questions and interject their own
opinions (and I will feel free to do the same as the firm’s CEO). If it becomes necessary to spur discussion, I
reserve the right to randomly select four or five students to play the role of “informed managers/investors”
who are there to ask the consultants pointed questions about the case. At the end of the presentations, the
class will also be asked to evaluate the student presentations both for content and style (see Page 28 for the
written evaluation). The written feedback will be anonymously shared with the presenting groups.

S&P 500 COMPANY ANALYSIS & PITCH BOOKS:

One of the abilities that any graduate of a business program should have is to be able to evaluate and fully
understand the current status and financial health of a company in comparison to other firms within its
industry. The graduate should also have a clear understanding of the international/national economic
climate, how it has changed over the last several years, what expected changes are in store for the future,
and how all of this can impact on an industry and the firms within the industry. Finally, all graduates should
be familiar with those resources that are available to help them understand the relative position and financial
condition of firms in today's world.

To help you develop this ability, each Company Analysis Team will be responsible for performing a financial
analysis and evaluation of a company that is part of the S&P 500 (the choice of the company is up to the
team, but may not be a company that any member of the team has analyzed in a prior class), preparing
“pitch books”, and presenting the results of their analysis (sample pitch books are on the class webpage).

Since a company cannot be fully understood in a vacuum, you may wish to consider the following when
doing your analysis:

1. The economic climate.


2. Industry analysis.
3. Firm analysis:
a. Overview:
• The company --- description of its major businesses, size, where it is located, etc.
• Recent earnings and stock price performance over time, relative to peers and the market.
b. Company’s management team and corporate governance:
• Background of management.
• Assessment of performance.
• Board of Directors.
• Ownership profile.
• Compensation policies.
c. Other Issues --- e.g. takeover defenses, dissident shareholders etc.
d. Detailed financial analysis --- tear the numbers apart: income statement, balance sheet,
capital structure, dividend policy, capital budgeting expenditures, R&D expenditures, pension
liabilities, impact of union contracts, credit rating, funding requirements, ROE, ROA, stock
price, growth, legal problems, etc. What’s good? What’s bad?
e. Financial comparison to the industry.
f. Potential consequences of future economic conditions.
g. Strengths, weaknesses, opportunities, and threats (SWOT) analysis.
h. Overall summary of the firm's financial condition, your outlook for the future, and what the
major issues are going forward that an investor and/or the company should consider.

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 21 of 30 Pages
i. Estimate of the intrinsic value of the company’s stock and your team’s view as to the
correctness of the firm’s current stock price --- discuss assumptions, the pricing models you
used (DCF, multiples, etc.), and conclusions.

The completed analysis (pitch books) must be submitted in electronic form (a PDF attachment to an e-mail
to me) by noon on Friday, December 3rd, so that I can post them to the class webpage, and the class can
review them, before pitches are actually made. A hard copy should also be submitted no later than the start
of class on December 6th. There is no page limit to the analysis. At least half of the grade for the analysis
will be based on the overall style of the pitch book and how well it is written: including grammar, spelling,
logic, layout, etc.

Each team will be required to present their “pitch” to the class on December 6th (Company Analysis Teams
17-20) and December 8th (Company Analysis Teams 21-24). Every member should be involved in
preparing the report and the presentation, but not every member has to participate in the presentation of the
pitch book.

PREPARING A WRITTEN FULL CASE ANALYSIS:1

Your team may wish to approach the case write-ups as if you are a consulting team (either internal or
external) that has been hired by the company, and that the report that you submit will determine your
career/salary future. A major portion of the grade will be based on how well the report is written. Your
report is limited to a maximum of six pages (main body) plus a cover page, cover letter, and no more than
four pages of attachments. You should attempt to write it in a compendious style (i.e., comprehensive, yet
concise). It should have appropriate margins (1” all around), use at last an 11-point font (12 is better), and
include appropriate footnotes or endnotes where required. A hard copy of the report should be stapled once
in the upper, left-hand corner (do not bind or put into a cover). In addition, a complete electronic copy
(including cover page, cover letter, exhibits, appendices, tables, etc.) is to be sent to the instructor as a
single, electronic Word or PDF document, by the day of the class in which it is due.

Note: Attachments, such as Excel and PowerPoint, may be inserted directly into a Word document before
converting into a PDF document. You may see me if you do not know how to do this.

I. The objective of a case analysis is to reach a decision about the problem(s) in light of all pertinent
case information and principles available from previous coursework, required readings, other
reference materials, and personal knowledge.

II. Several important steps precede the writing of a case analysis:

A. The first reading of the case should be for recognition. Obtain a general idea of the type of
business, the time period, and the situation that appears to exist.

B. Subsequent readings should be for content.


1. Study exhibits carefully.
2. Note the attitudes and interrelationships of the people.
3. What does the case reveal about the industry and the economy?
4. What events have created the need to study the situation?
5. Become comfortable with the facts, situations, and attitudes presented.

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 22 of 30 Pages
C. Determine the principal problem(s) for analysis. Real (often unstated) problems may differ
from apparent problems.

D. Gather resources for solving the problem(s).


1. Identify the important facts that must be considered and determine how they bear
upon the problem(s).
2. Learn about the industry and the economy at the time of the case by consulting such
references as periodicals.
3. Review the principles of finance applicable to the case by studying required readings,
textbooks, and other sources.
4. Recast and interrelate existing exhibits and create meaningful new exhibits for the
analysis of the problem(s).

E. Analyze the problem.


1. Adopt a role that makes you an important participant in the case – internal or external
consultant, etc.
2. Develop relevant and feasible alternative solutions and compare, contrast, and
compromise among them by considering both their strengths and weaknesses.
3. Evaluate the strength of your analytical position and improve and tighten it where
necessary.
a. Have you supported your ideas and conclusions quantitatively?
b. Are your arguments consistent with sound financial principles?
c. Is your analysis within the constraints of the case?
d. Have you made unnecessary assumptions or assumptions that are contrary
to the facts given in the case?
e. Have you treated all viewpoints presented in the case fairly and fully?
f. Would you be willing to put your job and/or your money on the line based on
your analysis?

F. Decide upon and defend the solution you will recommend based on your analysis.
1. Keep in mind that a decision must be made even though more information would
appear to be desirable.
2. A sound decision will demonstrate logical analysis, consistency between analysis
and recommendations, and careful use of facts and background knowledge.

III. Organize your written analysis using the following format.

Note: The exact format of the report is up to your team, but should include these basics:

A. Cover sheet should include (1 page):


1. Name of class and section number.
2. Name of case.
3. Team number.
4. Names of team members.
5. Date

B. Cover letter (1 page maximum)

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 23 of 30 Pages
1. Standard business format (date, address, salutation, body, ending, block paragraphs,
no indents, double space between paragraphs, left justified, etc.).
2. This is what you would send to a business along with your consulting report. It
should summarize what you did and what you recommend, and inform the firm what
to expect when they read your complete report.

C. Main body of the case write-up (6 page maximum). It should include:


1. Statement/discussion of the problem.
2. Your analysis of the problem, including a thorough discussion of the results of
your analysis. This is the most important part of your paper, but it is also the
hardest section of the report to write well. One common problem is for
students to simply report, ad infinitum, numbers from their attachments,
without explaining what these numbers mean or imply.
3. Discussion of possible solutions.
4. Recommendations.
5. Summary and closing.

D. Attachments, such as exhibits, appendices, tables, graphs, etc. Tables and graphs are a
good way of summarizing large amounts of data. There is a 4-page limit to the number of
attachments that you may include and attachments should not be included unless they are
specifically cited in the body of the report.

E. Each write-up should be concise, demonstrate excellent grammar and composition, and be
free of typing and spelling errors.
1. Observe these rules for good writing.
a. Don't use no double negatives.
b. Make each pronoun agree with their antecedent.
c. Join clauses good, like a conjunctions should.
d. About them sentence fragments.
e. When dangling, watch your participles.
f. Verbs has to agree with their subjects.
g. Just between you and me, case is important, too.
h. Don't write run-on sentences they are hard to read.
i. Don't use commas, which aren't necessary.
j. Try to not ever split infinitives.
k. It's important to use your apostrophe's correctly.
l. Proofread your writing to see if you any words out.
2. Edit ruthlessly.
Somebody has said that words are a lot like inflated money – the more of them that
you use, the less each of them is worth. Right on. Go through your entire written
analysis just as many times as it takes. Search out and aAnnihilate all unnecessary
words, and sentences – even entire paragraphs.
3. Proof your report once again before turning it in!

1
Some of these suggestions are from a handout prepared by Professor James M. Gahlon at the
University of Minnesota (1980).

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 24 of 30 Pages
PREPARING A WRITTEN CASE SUMMARY REPORT:

Your team should approach the case summaries as if you are a consulting team (either internal or external)
that has been hired by the company, and that the summary that you submit will determine your career/salary
future. Each team is responsible for turning in summaries for all cases so marked. A major portion of the
grade will be based on how well the summary is written. Your reports are limited to a maximum of three
pages (main body) plus a cover page and one page of exhibits. Hard copies of the reports should be
stapled once in the upper, left-hand corner (do not bind or put into a cover). In addition, a complete
electronic copy (including cover page, cover letter, exhibits, appendices, tables, etc.) is to be sent to the
instructor as a single, electronic Word or PDF document, by the day of the class in which it is due.

The format of the case summary should include the following:

1. Cover sheet should include:


a. Name of class and section number.
b. Name of case.
c. Team number.
d. Names of team members.
e. Date.
2. Description of the problem. (About 1/2 page)
3. A summary of your analysis of the problem. (About 2 pages)
4. Your recommendations. (About 1/2 page)
5. Attachments. Attachments should not be included unless they are specifically cited in the body of
the summary. (Maximum of 1 page)

SUGGESTED BOOKS FOR BOOK REVIEWS (Others are Acceptable – Check with Instructor):

1. Against the Gods: The Remarkable Story of Risk, Peter L. Bernstein, John Wiley & Sons, Inc., New
Jersey, 1996, ISBN: 0-471-29563-9.

2. Ahead of the Curve: Two Years at Harvard Business School, Philip Delves Broughton, The Penguin
Press, New York, 2008, ISBN: 978-1-436-25826-5.

3. A Random Walk Down Wall Street, Burton G. Malkiel, WW Norton & Company, Inc., New York,
1999, ISBN: 0-393-04781-4.

4. A Whole New Mind: Why Right-Brainers Will Rule the Future, Daniel H. Pink, Riverhead Books,
New York, 2005, ISBN: 1-4295-2110-4.

5. Barbarians at the Gate: The Fall of RJR Nabisco, Bryan Burrough and John Helyar, HarperCollins,
New York, 1991, ISBN: 0-06-016172-8.

6. Beating the Street, Peter Lynch (with John Rothchild), Simon & Schuster, Inc., New York, 1993,
ISBN: 0-671-75915-9.

7. Big Deal: 2000 and Beyond, Bruce Wasserman, Warner Books, New York, 2000, ISBN: 0-446-
52642-8.

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 25 of 30 Pages
8. Capital Ideas: The Improbable Origins of Modern Wall Street, Peter L. Bernstein, John Wiley &
Sons, Inc., New Jersey, 2005, ISBN: 0-471-73174-9

9. Chance, Amir D. Aczel, Thunder’s Mouth Press, New York, 2004, ISBN: 1-56858-316-8

10. Den of Thieves, James B. Stewart, Simon & Schuster, New York, 1991, ISBN: 0-671-63802-5.

11. FIASCO: The Inside Story of a Wall Street Trader, Frank Partnoy, Penguin Books, New York, 1999,
ISBN: 0-393-04622-2.

12. Freakonomics: A Rogue Economist Explores the Hidden Side of Everything, Steven D. Levitt and
Stephen J. Dubner, Harper Perennial, New York, 2005, ISBN: 0-06-073132-X.

13. Iacocca: An Autobiography, Lee Iacocca (with William Novak), Bantam Books, New York, 1984,
ISBN: 0-553-05067-2.

14. Liar's Poker : Rising Through the Wreckage on Wall Street, Michael Lewis, WW Norton & Company,
Inc., New York, 1989, ISBN: 0-39-302750-3.

15. Megatrends 2000, John Naisbitt & Patricia Aburdene, William Morrow and Company, New York,
1990, ISBN: 0-688-07224-0.

16. Monkey Business: Swinging Through the Wall Street Jungle, John Rolfe and Peter Troob, Warner
Books, New York, 2000, ISBN: 0-446-52556-1.

17. Nightmare on Wall Street: Salomon Brothers and the Corruption of the Marketplace, Martin Mayer,
Simon & Schuster, Inc., New York, 1993, ISBN: 0-671-78187-1.

18. A Non-Random Walk Down Wall Street, Andrew W. Lo and A. Craig MacKinlay, Princeton University
Press, Princeton, New Jersey, 1999, ISBN: 0-691-05774-5.

19. Paradigm Shift: The New Promise of Information Technology, Don Tapscott and Art Caston,
McGraw-Hill, Inc., New York, 1993, ISBN: 0-07-062857-2.

20. The Power of Gold: The History of an Obsession, Peter L. Bernstein, John Wiley & Sons, Inc., New
Jersey, 2000, ISBN: 0-471-25210-7

21. The Predators’ Ball, Connie Bruck, Penguin Books, New York, 1989, ISBN: 0-14-012090-4.

22. Soap Opera: The Inside Story of Procter & Gamble, Alecia Swasy, Times Books (Random House,
Inc.), New York, 1993, ISBN: 0-8129-2060-0.

23. Super Freakonomics: Global Cooling, Patriotic Prostitutes, and Why Suicide Bombers Should Buy
Life Insurance, Steven D. Levitt and Stephen J. Dubner, HarperCollins, New York, 2009, ISBN:
978-0-06-195993-6.

24. Talking Straight, Lee Iacocca (with Sonny Kleinfield), Bantam Books, New York, 1988, ISBN: 0-553-
05270-5.

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 26 of 30 Pages
25. The Dark Side of Valuation, Aswath Damodaran, Prentice hall, Inc., Upper Saddle River, New
Jersey, 2001, ISBN: 0-13-040652-X.

26. The Digital Economy: Promise and Peril in the Age of Networked Intelligence, Don Tapscott,
McGraw-Hill, Inc., New York, 1996, ISBN: 0-07-062200-0.

27. The Dilbert Future, Scott Adams, HarperCollins Publishers, New York, 1997, ISBN: 0-88730-866-X.

28. The Dilbert Principle, Scott Adams, HarperCollins Publishers, New York, 1996, ISBN: 0-88730-787-
6.

29. The Intelligent Investor (4th Edition), Benjamin Graham, HarperCollins, New York, 1973 (Revised
2003), ISBN #0-06-055566-1.

30. The Meaning of the Holy Qur'an, ‘Abdullah Yūsuf ‘Alī, Amana Publications, Beltsville, Maryland,
2001, ISBN: 0-915957-76-0.

31. The Random Walk Guide to Investing, Burton G. Malkiel, W.W. Norton & Company, Inc., New York,
2003, ISBN: 0-393-05854-9.

32. The Rediscovered Benjamin Graham: Selected Writings of the Wall Street Legend, Janet Lowe,
John Wiley & Sons, Inc., New York, 1999, ISBN: 0-471-24472-4.

33. The Tipping Point, Malcolm Gladwell, Little, Brown and Company, New York, 2000, ISBN: 0-316-
31696-2.

34. There’s no Such Thing as a Free Lunch, Milton Friedman, Open Court, LaSalle, Illinois, 1975, ISBN:
0-87548-310-0.

35. Warren Buffet's Berkshire Hathaway: 101 Reasons to Own the World's Greatest Investment,
Robert P. Miles, John Wiley & Sons, Inc., New York, 2001, ISBN: 0-471-41123-X.

36. The Warren Buffett CEO: Secrets from the Berkshire Hathaway Managers, Robert P. Miles, John
Wiley & Sons, Inc., New York, 2002, ISBN: 0-471-44259-3.

37. The World is Flat, Thomas L. Friedman, Farrar, Straus and Giroux, New York, 2005, ISBN: 978-0-
374-29288-1.

38. When Genius Failed, Roger Lowenstein, Random House, New York, 2000, ISBN: 0-375-75825-9.

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 27 of 30 Pages
PEER EVALUATION FOR CASE PRESENTATIONS – FIN 4414 – 2010 FALL TERM

Team # _____

Grading Rubric: Scoring from 1.0 (Poor) to 15.0 (Excellent)


Criteria /
1.0 (Poor) 8.0 (Good) 15.0 (Excellent) Score
Scores
Introduction No real introduction An adequate introduction Introduction is original,
used and/or it is that starts with relevant intelligent, at a level
underdeveloped or statements or humor, gets appropriate to the audience,
irrelevant. Audience the audience’s attention, grabs their attention, and lets
has little idea of what and makes the audience them know exactly what the
the presentation is curious to hear more about presentation will cover.
about. the topic.
Statement of No main problem Main problem is Problem(s) clearly identified,
Problem identified, or difficult to adequately identified, the scope of the required
understand what the although questions may analysis needed is fully
problem is and why remain about its developed, and leads
there is a need for an importance or the need for directly into a discussion of
analysis an analysis. the methodology and actual
analysis performed.
Methodology Methodology/analysis Methodology/analysis is Methodology/analysis is
is not effectively briefly explained, but need clearly explained and what
explained and it is more clarity as to what was was done and why it was
unclear what was done done and why it was done. done is fully understood and
or why it was done makes sense

Overall Quantitative and Quantitative and qualitative Quantitative and qualitative


Analysis: qualitative analyses analyses are adequate to analyses are excellent and
Breadth and are too simplistic or analyze the case problems extensive in scope and the
Depth convoluted to and the results are, for the results are able to
adequately analyze the most part, adequate to persuasively support the
case problems and the support some of the conclusions and/or
results are inadequate conclusions and/or recommendations that may
to support any recommendations made. be made.
conclusions and/or
recommendations
made.

Effectiveness Exhibits are unclear, Exhibits require some work Exhibits are easily
of Exhibits are not explained/ to be understood, clarify understood, effectively tied
referenced effectively, some aspects of the into the presentation, and
and do not help to analysis and results, but clearly help in understanding
clarify the analysis or may cause confusion and the analysis and the results.
the results of the raise questions concerning
analysis other aspects.

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 28 of 30 Pages
Conclusions and Conclusions and Conclusions and
recommendations are recommendations are recommendations are
wrong, implausible, or reasonable, are supported logical, are supported by the
Conclusions
do not follow logically by the results of the results, have breadth and
and
from the analysis. analysis, but may lack depth of scope, and are
Recommen-
breadth and depth in terms persuasive and convincing.
dations
of scope and are not
persuasive.

Needs significant work. Generally okay, but could Good communication skills
Poor communication use some improvement. and effective presentation.
skills, reads from notes Occasional lazy Clearly articulates what was
or from slides, or has articulation and use of done, why, and the results.
back to audience. pause words (um, uh, Excellent interaction with
Does not address, etc.). Tries to interact with audience and appears to be
interact, or connect audience, but appears enjoying the experience.
with audience. somewhat uncomfortable
doing so. Slides are appealing, well
Slides are text heavy, organized, and clarify and
hard to read, have little Slides are visually support the main points
Delivery substance or appealing, but information being made in the
connection to points may be unclear and does presentation and help the
trying to be made. not always reinforce the audience to understand
points being made. what is being said.
If multiple presenters,
no sensible division of If multiple presenters, they If multiple presenters, they
duties, appear to do not distract from overall add to the effectiveness of
overlap, interrupt, and presentation, but neither the presentation.
correct each other, or do they add much to it.
are distracting when
not speaking.

Total Team Scores (0 - 105):

Comments:

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 29 of 30 Pages
PEER TEAM EVALUATION – FIN 4414 – 2010 FALL TERM

Team _________ Evaluator

Please rank each member of your team, including yourself, and provide written comments for
superior/inferior rankings. Evaluations must be turned in no later than the start of class on
Wednesday, December 8th if you wish to give a pro or con evaluation. Use the following ranking
criteria:

+1 Contributed more than the average member of the team and should have his/her grade
increased accordingly.

0 Contributed the same as the average member of the team.

-1 Contributed less than the average member of the team and should have his/her grade
decreased accordingly.

Please note that it is mathematically impossible for all members of the team to be evaluated
(ranked) as being superior to the average member of the team.

Team Member Evaluations

Name Rank

1.

2.

3.

4.

Comments (Use Additional Paper If Necessary)

FIN 4414 – Syllabus – Sections 2761 & 2762 – 2010 Fall Term Page 30 of 30 Pages