BUSI 3500 A/B – Applied Corporate Finance (Otchere)
Contents
1. as you would a chapter in a book or an article in a magazine You are not an observer but a participant If a case centers on a decision that needs to be made put yourself in the shoes of the decision maker Feel the frustration he or she feels with respect to data limitations Feel the pressures he or she feels with respect to difficult tradeoffs limited resources political conflicts or whatever Once in class share your ideas with others In preparing the cases the following simple rules may be useful 1 Adopt a management posture in analyzing cases Use the assignment questions as a guide only Your answer should highlight what you as a manager see as the strengths or weaknesses in a given situation 2 Familiarize yourself with the facts of the case Outline the industry and competitive context and the core strategic tasks that the firm should excel at 3 Support your analysis with facts from the case Most cases will not contain all data you might like to have Nevertheless you ll be surprised at how easily you can make accurate inferences and useful assumptions if you simply give the current management the benefit of the doubt Live case study Group work Throughout the semester each student will work in a group to investigate the financial aspects of a Canadian company listed on the Toronto Stock Exchange Select your company after the first class and email it to the instructor The goal of this exercise is to provide you an2. opportunity to apply the concepts that will be discussed in class to a real company and to evaluate whether the company is maximizing value for its shareholders and in the end whether the firm is underpriced or overpriced in the marketplace Details of this assignment are provided in a separate handout available on CuLearn Also an example of a live case study is available on CuLearn for your perusal Sedar com is a good source of information on companies listed on the Toronto Stock Exchange This assignment should be submitted to me at the beginning of last class Peer Evaluation The purpose of the peer evaluation is to provide feedback to the instructor regarding the contribution to the group projects of individual group members For whatever reason some members of the group may not contribute as much as everyone else To ensure that each member of the group gets the correct credit for his her work each student should submit either by email or by hard copy with your name and signature the rating of the members of your group on the day the particular group work is due The marks for each individual will be averaged to get the weighting for evaluating the group work Each group is allocated a total of 100 points to be distributed amongst the group members Based on your estimation of the contribution of each member of the group distribute the points among your team mates including yourself The total should be 100 For example if your group co
3. the class The write up will be word processed and professionally written with a maximum length of 3000 words excluding appendices The first page of your report will consist of an executive summary of the group s analysis and recommendations The subsequent pages will document the analysis and reasoning Numerical analyses that are referred to in the write up should be provided as appendices The group also will give a verbal presentation of the case on the dates indicated in the class schedule outlined below The group will hand in the case report at the beginning of the class presentation Each group also will prepare and give to the whole class copies of any calculations and or tables the members consider to be relevant Cases will be evaluated using the following criteria Thoroughness of preparation as revealed in class discussion and written report Knowledge and application of relevant theories and techniques Ability to present a well prepared analysis Ability to formulate and present sound diagnosis and recommendations Ability to identify strengths and weaknesses in the analysis diagnosis recommendations and criticisms of other students work eae oD Case preparation Learning in class will focus more on the thought process in analyzing business situations than on the solutions per se In order to derive maximum benefits from the cases it is essential that you mentally get inside the case situation Do not approach a case
4. A SPROTT SCHOOL OF BUSINESS 2014 BUSI 3500 Applied Corporate Finance Section A amp B Instructor Dr Isaac Otchere Office 1712 DT Section A Tuesday 8 35 11 25 Classroom Southam Hall 402 Section B Tuesday 11 35 2 25 Classroom Southam Hall 402 Office Hours Wednesday 3 00 4 30 Phone 520 2600 Ext 2731 Email isaac otchere carleton ca Prerequisites BUSI 2505 with a grade of C or higher in each ECON 2009 and STAT 2606 with a grade of C or higher in each The School of Business enforces all prerequisites This Course is prerequisite for BUSI 4500 Advanced Corporate Finance and BUSI 4510 Mergers and Acquisition with a grade of C or higher Course Objectives This course focuses on applying the finance tools learned in BUSI 2504 and BUSI 2505 to business decisions Topics to be discussed will include issues relating to risk and return cost of capital capital budgeting capital structure payout policy and firm valuation Material will be covered in more depth than in earlier courses The course will use lectures complemented by cases as a means of enriching student understanding of the important concepts and practices of corporate finance On successful completion of this course you will be able to e Identify and discuss corporate governance issues affecting corporations e Explain the trade off between risk and return and compare the perspective of a firm making project decisions to that of ou
5. ained during the last week of class Given the nature of this examination the only valid excuse for missing the exam is one of a medical nature and must be documented by a medical certificate If the exam is missed for medical reasons students will have to apply for a deferred examination Practice questions that will be posted on CuLearn will help you prepare for the exams The date and location of the final exam will be announced through the University s normal procedures for such matters Be sure that you are available for the final exam Allowance will not be made for conflicting travel plans Only Texas Instruments BA II Plus calculators can be use in the examination Translation dictionaries are allowed as long as they are in print format and do not contain any handwritten notes Electronic translation dictionaries are not allowed NOTE 1 The final exam will be comprehensive covering material from the entire course If you are awarded less than 50 on the final exam you will receive an F regardless of your total mark in the course 2 Students who do not demonstrate a minimum level of performance during the term will not be allowed to defer the final exam The requirement for satisfactory in term performance is an overall mark of 50 or better on the assignments and quizzes Students with unsatisfactory in term performance who miss the final exam will be awarded FND for the course What is expected of you 1 Attend all lec
6. commodation if applicable After requesting accommodation from PMC meet with me to ensure accommodation arrangements are made Please consult the PMC website for the deadline to request accommodations for the formally scheduled exam if applicable The deadlines for contacting the Paul Menton Centre regarding accommodation for final exams for the December 2014 exam period is November 7 2014 and for the April 2015 exam period is March 6 2015 Religious observance Students requesting academic accommodation on the basis of religious observance should make a formal written request to their instructors for alternate dates and or means of satisfying academic requirements Such requests should be made during the first two weeks of class or as soon as possible after the need for accommodation is known to exist but no later than two weeks before the compulsory academic event Accommodation is to be worked out directly and on an individual basis between the student and the instructor s involved Instructors will make accommodations in a way that avoids academic disadvantage to the student Students or instructors who have questions or want to confirm accommodation eligibility of a religious event or practice may refer to the Equity Services website for a list of holy days and Carleton s Academic Accommodation policies or may contact an Equity Services Advisor in the Equity Services Department for assistance Pregnancy Pregnant students requiri
7. kard HP 12C including Platinum model Staples Financial Calculator Sharp EL 738C amp Hewlett Packard HP 10bII Group work The Sprott School of Business encourages group assignments in the school for several reasons They provide you with opportunities to develop and enhance interpersonal communication leadership follower ship and other group skills Group assignments are also good for learning integrative skills for putting together a complex task Your professor may assign one or more group tasks assignments projects in this course Before embarking on a specific problem as a group itis your responsibility to ensure that the problem is meant to be a group assignment and not an individual one Academic Accommodations for Students with Disabilities The Paul Menton Centre for Students with Disabilities PMC provides services to students with Learning Disabilities LD psychiatric mental health disabilities Attention Deficit Hyperactivity Disorder ADHD Autism Spectrum Disorders ASD chronic medical conditions and impairments in mobility hearing and vision If you have a disability requiring academic accommodations in this course please contact PMC at 613 520 6608 or pmc carleton ca for a formal evaluation If you are already registered with the PMC contact your PMC coordinator to send me your Letter of Accommodation at the beginning of the term and no later than two weeks before the first in class scheduled test or exam requiring ac
8. ng academic accommodations are encouraged to contact an Equity Advisor in Equity Services to complete a letter of accommodation The student must then make an appointment to discuss her needs with the instructor at least two weeks prior to the first academic event in which it is anticipated the accommodation will be required Academic Integrity Violations of academic integrity are a serious academic offence Violations of academic integrity presenting another s ideas arguments words or images as your own using unauthorized material misrepresentation fabricating or misrepresenting research data unauthorized co operation or collaboration or completing work for another student weaken the quality of the degree and will not be tolerated Penalties may include expulsion suspension from all studies at Carleton suspension from full time studies a refusal of permission to continue or to register in a specific degree program academic probation and a grade of Failure in the course amongst others Students are expected to familiarize themselves with and follow the Carleton University Student Academic Integrity Policy which is available along with resources for compliance athttp www2 carleton ca sasc advisingcentre academic integrity
9. nsists of four individuals and if each contributed equally each member including yourself should be allocated 25 of the 100 points If I do not receive this form from an individual student I will assume that the student has chosen to distribute the points equally amongst the group members Quizzes 3 quizzes To encourage you to keep up with the course material and to measure your understanding of the material I will administer 3 in class quizzes Each quiz will be 20 minutes in duration and it will consist of multiple choice questions At the end of the lecture preceding the week of a quiz you will be informed of the topics that will be tested Note that there will be no make up quiz Mid term Exam The mid term test will be held in the week shown in the class schedule The venue and time for the test will be determined in due course For this test you will be required to know the materials that will be covered in the first four weeks chapters 1 6 of the text book In fairness to all students no make up mid term exam will be administered In the case of a valid excuse for missing the mid term test supported by evidence for example medical certificate the mid term exam weight may be added to that of the final exam Final Exam The final examination will test your understanding of the concepts covered in both the lecture and case components of the course It will be held during the final examination period The exam format will be expl
10. troduction the objective of corporate finance D1 D2 decisions and Governance issues 16 Risk measurement and determination of cost of D3 D4 capital in practice I 23 Risk measurement and determining the cost of D3 D4 capital in practice II 30 Practical issues in capital budgeting I D5 D6 Oct 7 Practical issues in capital budgeting II including D5 D6 Project Real Options CB 15 Case Cost of capital Telus Corp 14 Valuation I D12 Case Capital budgeting Laurentian Bakeries CB 21 18 Mid Term test 21 Valuation H D12 Case Valuation Rushway Brothers Lumber CB 23 28 Fall Break Noy 4 Capital structure I D7 D8 Case Valuation Oxford Learning Centres Inc CB 24 11 Determining Optimal Capital structure in practice D8 D9 Case Capital structure Rocky Mountain CB 14 18 Dividend policy I D10 95 Dividend policy II D11 Case Dividend policy Champion Road CB 22 Dec 2 Introduction to Mergers and Acquisitions D10 D11 Case M amp A United Grain Growers Limited CB 28 Wrap up Live case study due While every attempt will be made to keep to the schedule above circumstances may necessitate modifications during the semester IMPORTANT ADDITIONAL INFORMATION Required calculator in BUSI course examinations If you are purchasing a calculator we recommend any one of the following options Texas Instruments BA II Plus including Pro Model Hewlett Pac
11. tside investors evaluating the firm e Analyze long term investment financing and payout decisions of a corporation and be able to identify and discuss the theory and practice of Cost of capital Capital structure and Dividend policy e Value a firm using different valuation approaches Required Text Aswath Damodaran Applied Corporate Finance A User s Manual 3 Edition Wiley 2011 SUPPLEMENTARY TEXT Forester Dunbar Hatch Shaw and Wynant Cases in Financial Management 4 Edition Prentice Hall 2003 A copy of this text is available on reserve at the MacOdrum Library Grading Due date Case analysis Group work 10 TBD Live case study Group work 15 Day of last lecture Quizzes 3 15 TBD Midterm Test 20 Oct 18 Final Examination 40 TBD NB Successful completion of the course requires a pass at least 50 of the final examination mark Case analysis Group work One of the most important requirements for this course is a thorough preparation and analysis of the assigned case and active participation in the classroom Therefore you should form your group on the first day of class Each group will have 5 members You are responsible for choosing your teammates One of the group members should email your group list to the instructor soon after the first class Cases will be assigned after the first class Each group will be responsible for analyzing preparing a detailed write up and presenting the assigned case to
12. tures The topics that will be covered in this course are cumulative Missing a lecture could adversely affect your understanding of subsequent materials I will take attendance of students at each lecture 2 Individually read and prepare all the assigned cases Then meet with your group to discuss each other s ideas and analyses 3 Active class participation Read and prepare the assigned cases and be prepared to participate in the discussion Much of the learning from cases comes through participation and discussion including discussion within your group before class 4 Assemble a group and pick your company for the Live Case Study as soon as possible You should pick a company that has good disclosure and research coverage To be able to do a good analysis you should start sooner rather than later 5 Read the relevant chapters of the textbook before attending lectures 6 Attempt the assigned practice questions You may browse the Applied Corporate Finance Website and try some of the chapter questions 7 Read the business section of at least one major newspaper e g The Globe amp Mail Report on Business or The National Post Daily and The Wall Street Journal to keep up with the latest developments in the Finance community 8 Write all quizzes and the exam Participate actively in your group work Best wishes Dr Isaac Otchere Course Schedule Readings Week Lecture Case Damodaran D Case Book CB Sept 9 In
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