Boston College - Wendy Jeffus



Clark University

Department of Finance

Graduate School of Management

Fall 2008

|FIN 5201 |Wendy M. Jeffus |

|Case Studies in Corporate Finance |Office Hours: after class and |

|Monday: 1:00pm – 4:00pm |by appointment |

|Location: Carlson Hall 128 |Phone: 214-934-1277 |

| |Email: jeffus@bc.edu |

GSOM Mission:[1]

Clark University's Graduate School of Management (GSOM) is a diverse community of learners, researchers, and business professionals that prepares future leaders to think critically, manage collaboratively and contribute to their organizations and society.

Guiding principles support our mission:

• We provide students with a high quality education by 1) building a solid foundation of theoretical knowledge and contemporary management practices 2) encouraging critical thinking, creativity, collaboration and communication and 3) featuring a faculty that is academically and professionally qualified, actively involved in research in their fields, and engaged in service to their communities and profession.

• We acknowledge the complex nature of organizations and their environments by 1) reflecting on the larger societal context in which businesses function 2) instilling social awareness and valuing skills and 3) keeping abreast of emerging management issues and maintaining collaborative links to the business community.

We support management practice through basic research, pedagogical research and contributions to practice. Primary emphasis is placed on scholarly contributions in journals or books that contribute new knowledge.

• We are committed to continuous improvement by 1) establishing learning goals and monitoring learning outcomes across the curriculum 2) assessing intellectual contributions of faculty 3) seeking input from stakeholders, including students, faculty, alumni and the community at large and 4) monitoring the direction of the school, periodically reviewing its performance, and actively engaging in strategic planning.

Course Description:[2]

This course extends the discussion from FIN4200 of the theoretical financial issues facing the corporation. The student is exposed to a more in-depth presentation of the underlying financial theories and gains practice applying these theories to actual problems either through case analyses or additional readings.

Course Objectives:

This course links managerial decisions to capital markets and the expectations of investors. The focus is on current corporate finance theory and some of the problems associated with implementation of this theory. At the core of almost all of the cases is a valuation task that requires students to look to financial markets for guidance in resolving the case problem. The focus on value helps managers understand the impact of the firm on the world around it.

The course will be conducted through lectures, discussion, and case analysis. Solutions to selected cases/problems will be discussed in class.

Textbooks & Recommended Reading:

1. Required: Case Studies in Finance (5th edition) by Robert F. Bruner

2. Recommended: a basic corporate finance text (e.g. Ross/ Westerfield/ Jordan)

3. Recommended: Buffett: The Making of an American Capitalist by Roger Lowenstein

4. Regular reading of the Wall Street Journal, and the Financial Times.

|Session |Date |Topics, Readings, & Assignments |

|1 |9/8 |Introduction, Overview of Corporate Finance & the Financial Environment |

| | |“How to Study and Discuss a Case” |

|2 |9/15 |Warren Buffett: To Think Like an Investor |

| | |Value Creation & Governance |

| | |Case: Ben & Jerry’s Homemade |

|3 |9/22 |Time Value of Money & Capital Asset Pricing Model |

| | |Chapter 12 |

| | |Case: Nike, Inc. |

|4 |9/29 |Cost of Capital & Economic Value Added (EVATM) |

| | |Case: Coke versus Pepsi |

|5 |10/6 |Financial Statements, Cash Flows, and Taxes & Analysis of Financial Statements |

| | |Case: Krispy Kreme Doughnuts |

|6 |10/13 |Financial Planning & Managing Growth |

| | |Case: Body Shop International: An Introduction to Financial Modeling |

|7 |10/20 |Case Assessment Presentations |

| | |Midterm Review |

|8 |10/27 |MIDTERM EXAM (in class) |

|9 |11/3 |Capital Budgeting & Resource Allocation |

| | |Case: Compass Records |

|10 |11/10 |IPO Valuation & Financing the Early-Stage Firm |

| | |Case: JetBlue Airways |

| | |Case: Purinex |

|11 |11/17 |Capital Structure Decisions & Evaluating a Lease Financing Proposal |

| | |Chapter 28 |

| | |Case: Rosario Acero S.A. |

| | |Case: National Railroad Passenger Corporation (“Amtrak”) |

|12 |11/24 |Thanksgiving Break (No Classes) |

|13 |12/1 |Cross-Border Mergers & Acquisitions |

| | |Case: Chrysler Corporation: Negotiations Between Daimler & Chrysler |

|14 |12/8 |Case Assessment Presentations |

| | |“The Bottom Line” |

| | |Final Exam Review |

|15 |12/15 |FINAL EXAM |

Examinations, Papers, & Grading:

There will be two exams, and four case assignments. Each of your assignments will be assessed by both the professor and your classmates. Occasional participation assignments are optional and will count towards your class discussion/participation grade. Homework problems will also count toward your participation grade and will help you prepare for the in-class exams.

|Case Assignments (4) |40% |

|Mid-term Exam |25% |

|Final Exam |25% |

|Class Discussion / Participation |10% |

Papers and Grading Policy:

Every student is expected to come prepared for discussion of the reading material and cases for all classes. Every student is expected to provide a write up of four cases—one from each category. Each write up is due the day we discuss the case. Your write up should be analytical rather than descriptive of contents of the case. Late submission of any assignment or assessment will result in a grade reduction.

|Category A |Category B |Category C |Category D |

|Ben & Jerry’s |Coke vs. Pepsi |Compass Records |Rosario Acero S.A. |

|Nike, Inc. |Krispy Kreme |JetBlue | (“Amtrak”) |

| |Body Shop Intl. |Purinex |Chrysler Corp. |

Exams

The midterm and final exams will be "closed-book." There are NO makeup exams. Those students who will be out of town or who are unable to take the final exam on the date specified, must discuss this matter with me well in advance of the examination date. Students will be permitted to use a “study sheet” for their in-class examinations. The “study sheet” will be 1 page and may be written on BOTH sides.

Assignments/Assessments

Teams of two-four students will be selected to analyze the assigned cases. Students will be expected to apply the theories discussed in class to the assigned companies dealing with similar issues. Each team will be expected to present each case report. In addition to your case assignments, your team will be critiquing other case presentations. In the “assessment,” you have the opportunity to challenge the conclusions of your classmates, while seeking to apply new course material to the analysis.

Participation

Students are expected to earn participation points through class attendance, class discussion, in class quizzes, optional homework assignments and/or participation opportunities.

Fall 2008 Academic Calendar

|September 2 – December 19 |

|Aug. 13 - 22 |

|Web registration for all current students |

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|Aug. 22 |

|Last day for continuing GSOM students to register without a late fee |

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|August 25 – Sept. 1 |

|Orientation for new full-time students |

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|Aug. 26 – 29 |

|Web registration for new full-time and part-time students |

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|Sept. 1 |

|Labor Day - no classes |

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|Sept. 2 |

|First day of classes (Full semester and Module A) |

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|Oct. 3 |

|Last day to withdraw from class with a grade of W (Module A) |

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|Oct. 20 |

|Last day of classes (Module A) |

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|Oct. 21 |

|Make-up day for missed classes (Module A) |

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|Oct. 24 |

|Final grades due from faculty for Module A |

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|Oct. 21 – 24 |

|Fall Break – No Classes |

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|Oct. 27 |

|First day of classes (Module B) |

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|Nov. 14 |

|Last day to withdraw with a grade of W (Full Semester) |

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|Nov. 24-28 |

|Thanksgiving Break – No Classes |

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|Dec. 5 |

|Last day to withdraw from class with a grade of W (Module B) |

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|Dec. 18 |

|Last day of classes (Full semester and Module B) |

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|Dec. 19 |

|Make-up day for missed classes |

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|Dec. 26 |

|Final grades due from faculty for Module B and Full Semester |

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|Spring 2009 |

|January 12 – April 25 |

|Dec. 29 – Jan. 2 |

|Web registration for all current students |

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|Jan. 7 – 9 |

|Orientation for new full-time students |

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|Jan. 6 - 9 |

|Web registration for new full-time and part-time students |

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|Jan. 12 |

|First day of classes (Full Semester and Module A) |

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|Feb. 13 |

|Last day to withdraw from class with a grade of W (Module A) |

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|Feb. 26 |

|Last day of classes (Module A) |

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|March 5 |

|Final grades due from faculty for Module A |

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|March 2-6 |

|Spring break |

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|March 9 |

|First day of classes (Module B) |

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|March 27 |

|Last day to withdraw with a grade of W (Full Semester) |

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|April 10 |

|Last day to withdraw with a grade of W (Module B) |

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|April 23 |

|Last day of classes (Full Semester and Module B) |

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|April 24 |

|Make-up day for missed classes |

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|April 30 |

|Final grades due from faculty for Module B and Full Semester |

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|May 17 |

|Commencement |

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