BA 142 Second Semester AY 2010‐2011 WFR2 8:30‐10/WFU2 10‐11:30 Room 305 Consultation hours: 8‐12 M,T,Th
B.M. Aragon
[email protected] Room 215
Course description/objectives: This course deals with the long term investment, financing and payout decisions a firm must make. It will present concepts, principles and techniques of analysis that may be applied to these decisions. At the end of the course the student should be able to apply the same in relatively simple settings. Course requirements: Three exams, case presentation/reports, class participation including problem‐solving, and , if necessary,quizzes . Attendance will be checked and University rules on absences will be followed. The grading plan is presented below. Textbook: McGuigan, Kretlow and Moyer. Contemporary Corporate Finance , 11/e. Reference: Ilano and Ybanez (eds). Philippine Corporate Finance, Vol. 2 (1998). Session Topic 1 Introduction/overview/class rules, etc
Reading
Exercises/Assignments
4,5,6,11,19,21,26,27,30,33,35, 39,40,41,42 1,5,6,7,10,13,14,16,17,19,21,2 4,25
2‐3
Valuation Time value of money
Ch. 5
4‐5
Risk and return
Ch. 6
6‐7
Asset/bond valuation Preferred stock valuation Common stock valuation Case: Panama Printing Co. (reports only) 8 First exam
9‐12
Investment decisions: capital budgeting Cash flow analysis NPV, IRR, etc. 13 Case:Filtron Corporation Risk analysis 14 Case: Vesuvio Fonderia S.p.A.
15‐16
Cost of capital Weighted cost of capital RADR: Beta and leverage
Ch. 7 :239‐249
1,3,4,8,11,12,15,16,17,18,22,2 4
252 Ch. 8: 271‐280
1,2,7,8,15,17,20,22
Ch. 9 Ch. 10 (including appendix)
7,8,9,15,16,17,22 3,8,10,11,12,13,14,15,19, 20, Appendix : 2
Ch. 11
7,9,18,19
Ch. 12 Ch.11: 370‐375
3,6,7,8,9,11,14,15,17 Ch. 11: 5, 8,17,22,25, Ch. 12: 16,18
Ch. 13‐14
Ch. 13: 3,4,5 Ch. 14: 5,6,9,13,15,18,20,22,27,30
17 Case: Axle‐Elmond Inc. 18 Second exam 19‐21
Capital structure: theory and practice
22 Case: American Home Products Inc. 23 Payout: dividends and buybacks 24 Case: Napco Industries Inc. Fund‐raising Fixed income securities Common stock financing 27 Case: Continental Carriers Inc. 28‐29 Leasing/intermediate term financing
Ch. 15
7,8,9,11,12
Ch. 7 Ch.8
Cebu Pacific prospectus
Ch.19
7,8,10,11,16,20
Points 375 50
Weight 66% 9%
140
25% 0% 100%
25‐26
30 Integration/Wrap‐up Sustainable growth model 31 Integrating case: Dynatronics Inc. 32 Third exam Grading plan Requirement Exams (scaled to 125 pts each) Case presentation (50 pts for presenting group) Case reports (20 pts x 7) Quizzes Total
565
Exams are scaled to 125 points to achieve 66/34 ratio on individual/ group effort. Equivalents: 95‐100 90‐94 85‐89 80‐84 75‐79 70‐74 65‐69 60‐64 55‐60 below 55
1 1.25 1.5 1.75 2 2.25 2.5 2.75 3 5
Grades may be stepped up one level higher for outstanding class participation. This is discretionary. Case presentation/reports guidelines: 1. Editable files of the presentation/reports must be submitted by 5 pm, two days before the case will be presented to bjmaragon@yahoo. Points will be deducted for late submissions. The file name must include case title, your class and group number, e.g., Group 1.2 for 8:30 am class , second group. Paper copies are not required. For tables and spreadsheets the formulas must be accessible. 2. Presentations should not last exceed 25 minutes. You should display confidence and poise. There is no need for costumes, excessive visual/sound effects, or other gimmicks .
3. Reports should be 4 pages max including exhibits and type size of at least 12. No specific format is required but it is suggested that the report be written as a business memo, and not a school report. Use topics/headings to organize your report. 4. At a minimum, you need to identify decisions that need to made and your decision/recommendation and justification/analysis. This applies to both presentations and reports. 5. In some cases, there is no right or wrong answer or even a preferred answer. What is important is the clarity of thinking that underlies your answer: Do you know what you are talking about? Are you thinking clearly? Does the sequence of your ideas make sense? Are you communicating it clearly? 6. Do NOT repeat case facts. If the case has questions, use them as guides but do NOT simply answer them. 7. Items 4, 5 and 6 apply to presentations and reports. 8. The presenting group will be evaluatd partly on the reponse their presentation generates. The non‐reporting group will be evaluated partly on their participation in the discussion. Groups seat together during case presentations.
BA 142 (WFR2 & WFU2 ARAGON) BA 142 (WFR2 & WFU2 ARAGON) • First meeting will be on Friday, November 12 November 12. Please get the course outline from • Please get the course outline from my box at Room 207. • Start solving the problems in Chapter 5.
