University of Alberta, Alberta School of Business Department of Finance and Statistical Analysis
Instructor: Sheng-Jun Xu Course Section: B1 Email: [email protected] Class Room: BUS 1-10
Phone: 780-492-8057 Class Time: Mon, Wed 16:00 – 17:20 Office: BUS 2-32D Office Hours: Tues, Thurs 15:00 – 16:30 Course Description: Corporate Financial Planning is a case study and teamwork based course that applies the material learned in FIN 301, primarily from the standpoint of the corporation. Topics covered include the valuation of companies, the cost of capital, capital structure, cash policy, initial public offerings, mergers and acquisitions, private capital, corporate restructuring, and corporate governance.
Prerequisites: FIN 301, 412, 422.
Learning Objectives: This course incorporates the learning goals of the BCom Program, in particular critical thinking, ethical awareness, global awareness, oral communication, teamwork, quantitative skills and written communications. At the end of this course, you will be able to apply the material learned in FIN 301 (Introduc- tion to Finance) and FIN 422 (Capital Investments), in a wide range of corporate decision-making contexts.
Instructor Availability: The instructor is available during office hours (listed at the top of the page). Meetings by appointment can be arranged only during the week leading up to the midterm, final exam, or presentations.
Course Materials:
Case pack: A packet of cases will be made available. Students registered for this course are required to purchase the case packet. Additional required and suggested readings may be handed out in class or posted on the class web site as the term progresses.
Textbook: There is no textbook but most students will probably find it helpful to consult the relevant chapters of their FIN 422 textbook (Berk, De Marzo, Stangeland: Corporate Finance, 4th Canadian Edition, Pearson Canada, 2018, ISBN: 9780134632285).
Note: Once students are notified of the cases that will be used in this course, they are required to advise the instructor promptly if they have read any of the cases previously or have discussed any of the cases in another course. Failure to advise the instructor of previous exposure to a case would be grounds for a charge of academic misconduct to be brought. Students are not to have access to the teaching notes for any of the cases, and any evidence that the teaching notes were available to a student would also be grounds for a charge of academic misconduct.
Method of Evaluation: Course grades will be determined by combining points earned on case write-ups and presentations, class participation, a mid-term and a final examination. Individual student achievement is measured by the following assessments:
Case Write-up 15%
Case Presentation 15%
Class Participation 15%
Midterm Exam 25%
Final Exam 30%
If you miss the midterm examination, the weight of the midterm will be applied to your final exam. These represent the only marks available to students.
Make-up or extra work to improve your grade is not possible. Once assigned, the final grade in the class will not be changed except in the case of a recording error. If you feel that your grade is incorrect, you must notify me in writing during the one-week period following the return of the midterm. After that, the problem will not be reassessed. Please note thata request to have a question on your midterm re-graded entails a request to have the entire exam re-graded.
Final grades in the course will follow generally the historical distribution of grades in a FIN course that in- cludes third-year and fourth-year students. The following is the link to the official University of Alberta Assess- ment and Grading Policy: https://policiesonline.ualberta.ca/PoliciesProcedures/Pages/DispPol.
aspx?PID=101.
Important Dates:
Case selection End of second week
Submit recommendation report Day of case presentation
Submit decision memo One week following case presentation
Midterm Feb 26
Final Exam Apr 24 (9:00 am)
Examinations: The final exam will focus primarily on the material covered following the mid-term. Note that Finance is a cumulative discipline so core dumping the materials in the first half of the class after the mid-term is not advisable. A sample midterm and sample final exam will be provided.
Deferred final examinations will be allowed for students following University procedures for obtaining deferrals.
Students interested in deferred final examinations should consult the Undergraduate Office. For more informa- tion on what a deferred exam is, go to http://business.ualberta.ca/programs/bachelor-of-commerce/
current-students/exam-policy-procedures/deferred-exams. If you miss the final exam and meet the criteria for a deferred final, thedeferred final will be on May 14 (location TBD).
Students with accessibility needs can request special accommodations for exam. Please refer tohttps://www.
ualberta.ca/current-students/accessibility-resources/exam more more details about what types of accommodations are available, requirements, and deadlines.
Group Case Assignments: Students will be divided into five (5) groups, and each group will, from a predetermined list of five cases in the course packet, select one case to act as the “advisory group” and another case to act as the “management group”. The responsibility for each group is as follows:
Case Presentation (15% of final grade):
• On the day that a case is scheduled for group presentation (see tentative class schedule below), the advisory group is responsible for a formal presentationof 20 minutes maximumat the beginning of class. The
advisory group should take on the role of advisors to the decision-maker, and frame their presentation as a set of recommendations with supporting analysis.
• The management group should take on the role of the decision-maker tasked with evaluating the advisory group’s recommendation. Following the presentation, the management group can direct questions to the advisory group for a period of up to 15 minutes.
• Following the question period, the management group shall convene privately outside the class to decide on whether to accept or reject the advisory group’s recommendation (taking no longer than 15 minutes).
Upon returning to the class, the management group will present a shortdecision brief (taking no longer than 5 minutes) outlining their decision and their reasoning behind the decision.
• Out of the 15% class marks allocated to case presentations, 12% will be determined by performance as the advisory group and 3% will be determined by performance as the management group. Note that the latter component will be based on asking insightful questions and articulating clear reasons for a decision, and NOT on antagonizing the advisory group or latching onto minor errors.
Case Write-up (15% of final grade):
• Each group is required to turn in arecommendation reportfor the case in which they acted as the advisory group. One copy is to be submitted to the instructor, and one copy is to be submitted to the management group. The report is to be submitted in class on the day the given case is scheduled to be presented, and late submissions will not be accepted. Groups are recommended to bring an extra copy for themselves;
this will help the team during the discussion. The recommendation report is worth 12% out of the 15%
class marks allocated to case write-ups.
• The recommendation reports are to be submitted in the form of a typewritten report of maximum 4 pages (double-spaced)containing both analysis and recommendations. The four-page limit is for the text only—you may attach as many tables and numerical calculations as you wish. In order to conduct the analysis, it is expected that all students are familiar with Excel (or other spreadsheet software). Resources are available online for those who need a refresher or practice. For example,http://www.excel-easy.
com/data-analysis.htmlcontains guides for basic data analysis tools and functions.
• The management group is responsible for drafting aone-pagedecision memo, which is due exactly week following the original presentation. The memo should state the group’s decision in response to the advisory group’s recommendation and outline the rationale behind this decision. The decision in the memo does not have to match the decision reached in class, but the memo should describe any reasons behind a change in the decision. The decision memo is worth 3% out of the 15% class marks allocated to case write-ups.
Class Participation: The mark for class participation will be partly based on participation during case discussions. This includes discussions during the general Q&A period following group presentations as well as during regular class lectures.
Another source of participation grades is from actively participating in in-class exercises by presenting analysis in front of the class. This will be done in the same groups as in your group case assignment. Groups may volunteer to present their analysis, and I will make cold calls when there are no volunteers.
Academic Integrity: The University of Alberta is committed to the highest standards of academic integrity and honesty. Students are expected to be familiar with these standards regarding academic honesty and to uphold the policies of the University in this respect. Students are particularly urged to familiarize themselves with the provisions of the Code of Student Behaviour (online atwww.governance.ualberta.ca) and avoid any behaviour which could potentially result in suspicions of cheating, plagiarism, misrepresentation of facts and/or participation in an offence. Academic dishonesty is a serious offence and can result in suspension or expulsion
from the University.
Academic dishonesty is a serious offence and can result in suspension or expulsion from the University.” (Section 23.4 of the University Calendar) Please be aware that writing help is available at the following sites:
1. Centre for Writers: http://www.c4w.ualberta.ca/
2. Student Conduct and Accountability: http://www.osja.ualberta.ca/
Recording of Lectures: Audio or video recording, digital or otherwise, of lectures, labs, seminars or any other teaching environment by students is allowed only with the prior written consent of the instructor or as a part of an approved accommodation plan. Student or instructor content, digital or otherwise, created and/or used within the context of the course is to be used solely for personal study, and is not to be used or distributed for any other purpose without prior written consent from the content author(s).
Outline Policy: Policy about course outlines can be found in Course Requirements, Evaluation Procedures and Gradingof the University Calendar
Tentative Class Schedule
The course consists of lectures and case discussions. There are five (5) days for group presentations of cases.
Date Topic Textbook Reference Case
Jan 6 Intro
Jan 8 Valuation BDS 4Ed: Ch. 7, 21, 22
Jan 13 Cost of capital BDS 4Ed: Ch. 12
Jan 15 Debt Policy BDS 4Ed: Ch. 17, 18, 19
Jan 20 Cash Policy BDS 4Ed: Ch. 20
Jan 22 Modeling Financial Statements
The Body Shop International Plc 2001
Jan 27 Group Presentation 1 The Wm. Wrigley Jr.
Company
Jan 29 Valuing Private Companies Kohler Co.
Feb 3 Going Public BDS 4Ed: Ch. 23.2
Feb 5 Going Public BDS 4Ed: Ch. 23.2 TRX, Inc.
Feb 10 Financing Acquisitions BDS 4Ed: Ch. 28
Feb 12 Group Presentation 2 Rosetta Stone
Feb 17 Reading Week Feb 19 Reading Week
Feb 24 Financing Acquisitions BDS 4Ed: Ch. 28 Radnet, Inc.
Feb 26 Midterm Mar 2 Guest Lecture Mar 4 Guest Lecture
Mar 9 Group Presentation 3 Canadian Pacific’s Bid for
Norfolk Southern Mar 11 Financing in Distress
Mar 16 Financing in Distress Buffett’s Bid for Media
General’s Newspapers Mar 18 Short-term Financing BDS 4Ed: Ch. 26, 27 Toy World, Inc.
Mar 23 Group Presentation 4 Williams, 2002
Mar 25 Cross-border Financing BDS 4Ed: Ch. 31 Geeli Mar 30 Entrepreneurial Finance
Apr 1 Group Presentation 5 Corning
Apr 6 Fintech
Apr 8 Exam review
