Finance 402

Problems in Finance

Course Syllabus

 

St.Bonaventure University

Spring 2014

                     

                     

 

Instructor:  Jim Mahar

 

                OFFICE phone: 716-375-2359  (will give cell phone in class)

                 Email Address jimmahar@yahoo.com   Also jmahar@sbu.edu

 

 

Class time:  Monday and Wednesday 2:30

Online whenever.

 Program Objectives:

MBA 610  is a required course, and supports the program learning goals and objectives as shown below:

Program Learning Goals

Objectives

Fin 402

Goal 1 – Knowledge of Business Disciplines:  Our graduates will have advanced knowledge and proficiency in the key functional areas of business.

1.     Our graduates will demonstrate an understanding of the major concepts, theories and practices in the key functional areas of business.

2.     Our graduates will integrate knowledge from the key functional areas of business.

To understand finance you must have a working knowledge of all other areas. So this class, which is somewhat a capstone in finance, will build on all functional areas.

Goal 2 – Skilled Decision Makers & Problem Solvers:  Our graduates will be skilled decision makers and problem solvers.

1.     Our graduates will use appropriate problem-solving techniques and appropriate decision making skills to plan, evaluate, make recommendations and implement.

2.     Our graduates will demonstrate proficient quantitative reasoning skills.

In the cases you will be required to make sound decisions backed with quantitative reasoning.

Goal 3 – Effective Communication Skills:  Our graduates will build on existing written and oral skills to become proficient communicators.

1.     Our graduates will produce written projects that are well structures, resourceful, concise, and informative.

2.     Our graduates will deliver oral presentations that are well organized, engaging and informative.

3.     Our graduates will communicate effectively within a team setting.

Each case will be submitted by a team of students and each will have a written as well as oral presentation.

Goal 4 – Global Perspective:  Our graduates will have a multinational perspective.

1.     Our graduates will demonstrate a knowledge of cultural, economic and legal international business issues.

We will deal with international topics throughout the semester and in a few of the cases.

Goal 5 – Ethical Issues:  Our graduates will understand how legal and ethical issues impact their professional lives.

1.     Our graduates will identify, discuss, and develop conclusions regarding ethical issues facing the business profession.

2.     Our graduates will relate Franciscan values to contemporary business practices.

Ethics will be stressed from day one as to the need for honesty and transparency in business dealings.

 

Text:   No text, just cases and WSJ

 

Additional Requirements:

                                Google Documents account

                                    FinanceProfessorblog                 Wall Street Journal

                finance cases (bought online)

 

Prerequisites:

 

You must have successfully completed all prerequisites as explained in the class description (finance 401).  This class is designed to be a capstone class and as such you need the underlying classes.

 

This course should synthesize many of the finance program goals located at http://ms.sbu.edu/SLAP_goals/slap_goals/Finance.doc

 

Objective: 

            Finance is crucial to any business dealing and as such is one of the most

                    important things you can learn in you plan on entering the business world.

            This class will provide you with "real world" practice in many areas and on         

             many of the skills you learned in earlier Finance classes. This class is

            designed as a "cap-stone" class in the area of finance and as such you will be

            expected to be able to draw on your expertise in all areas of Finance.

 

The Case Method (and other assorted ramblings):

 

                    This class is largely a "case" class. That means it will be predominantly

            taught using cases to illustrate points and to give you "hands-on"

            experience. If past history is your guide, you will both love and hate this

            class. It will be very fun (indeed I will be disappointed if it is not your

            favorite class this semester and possible ever (as an undergrad it was my  

            second favorite class!) BUT it will also be one of the most frustrating classes

           you have ever had. It is difficult and we cover a great deal of material. It is

            definitely not a "cake" class. I apologize in advance for the fact that this class

           will take a great deal of time, but there really is no other way.

 

                    If you speak to employers one of their biggest concerns is that students do

            not have enough experience. This class will try to alleviate this problem. We

            will be examining many companies (both real and fictional) to learn from

            their successes as well as their failures. Through the experiences of those in

            the cases, we will be expanding our own knowledge while also learning how

            to deal with real business experiences.

 

           The case method of learning is beneficial in that is allows students to get

            their hands dirty" and actually use the tools and techniques that we learned in  

           previous classes (both Financial Classes and other classes). You will

            find yourself using not only NPV, IRR, derivatives, but also EOQ, JIT,          

            market research, and even a little common sense! ;-)

 

                    Another point about the case method that bears mention: you will rarely be

            given the entire picture. There will be important pieces of information that

            missing. This will force you to research the topic and also you will

            frequently be required to make assumptions. The reason for this is not that

            the case-author forgot the details, but to make the case more life-like.

                    With perfect information decisions are easy. Unfortunately perfect

            information is rarely, if ever, available. Decision making includes

            determining what is important, finding as much information as you need, and

            then making assumptions about what you do not have. The same will be true

            in this class. The difference is that if you make the wrong assumption in a

                    case I will not fire you, whereas your future boss may.

 

Operational Details:

 

                    Most of the class will be spent "doing" (note this involves much more than

                    just reading!) the cases. This will involve you reading, analyzing, and

           frequently presenting your findings.

 

                    To continue with the "real world" theme, we will be breaking our class into

            teams. For each case will have two teams presenting. The management team

            will be responsible for a quick overview of the case and for introducing the

            important points. The second team (the consultants) will be responsible for

            making a presentation answering any of management's questions, thoroughly

            discussing the issue, and recommending a course of action. Both of these

            teams will be responsible for submitting a written report of 5-10 pages

            (excluding appendices).  Assignments will be shared

 

                    The teams that are not presenting will be required to turn in a one-page

            memo that hits the high-points of the case and identifies the key points.

            Additionally these teams will be the "audience" and will help evaluate the

                    presentations and are expected to question both presenting teams.

 

 

Grading:        Grades will be based on three main areas:

 

                           Your Presentations:                                                              35%

                           Class Participation                                                                                30%

                           Tests

                                        Test 1                                                                                          15%

                 Final                                                                                                      20%

 

Extra credit on standardized univ test:  if above 90% percentile =5 points added

  80-89.9  4 points  etc

 

You will be graded on your ability to present your findings in a clear and understandable format.  I will be as hard on you as I can be.  Expect difficult questions. Therefore your financial knowledge is only a portion of the grade. You will also be graded on your presentation skills and your interpersonal skills.  I do not want you to get to the “real world” and not be prepared to make presentations.

 

 

 

Now that the administrative trivia is complete, I do want to say that I truly hope this is a fun class. I want it to be a learning experience but learning need not always be painful. I do not want to (nor do I want you to) dread the class. It should be fun. Thus the class will be quite informal but also rigorous. I am sure that you will learn a great deal and have fun doing it!

 

 

 

 

Outline:

 

Week 1: Ethics & Creating value through finance

Week 2: Mergers and acquisitions

Week 3: Text book overview and Class case discussion

Week 6: Test 1

Weeks 4-15: Case presentations  2 cases per week so 22 cases.  

Class discussion instead of presentations on Monday after Spring Break.    

6 teams of three.  Two teams go each week.  

cases:

  1. Lajitas--Class led.  
  2. Adelphia-Fraud and capital Structure
  3. Oil Pipeline Case
  4. Springfield Power
  5. Campbell Soup--Buybacks and negative equity.
  6. Caterpillar (Biases and Capital Budgeting)
  7. Enron (fraud) Here is one source, but thousands exist.
  8. Chesapeake’s Executive Compensation
  9. Rosetta Stone IPO
  10. Facebook (IPO)
  11. Takeover of Merrill Lynch by Bank America with Emphasis on Financial Meltdown.
  12.  Lehman Brothers (many sources--here is one.)
  13. Sustainability as a Positive NPV: McCain Foods
  14. Shareholder Activism: Target
  15. Risk:  THE BG Group
  16. Stakeholders: BT--
  17. Volkswagen and Porsche--Shareholder infighting
  18. Spinoffs: Cadbury Schweppes

Each group picks one of their own (this will be a full class presentation). Only one group goes per class.