BUSAD526:

Week 1

• Read the assigned textbook reading.
• *Brealey, R., Myers, S., & Allen, F. (2011). Principles of Corporate Finance. 10th edition. McGraw-Hill. (The readings from this text will also be referred to as BMA).
  Read BMA Ch 9 sections 9-1, 9-2, 9-3 on Risk and Cost of Capital
  Read BMA Ch 17 sections 17-1, 17-2, 17-3 on Debt Policy
  Read BMA Ch 18 sections 18-1, 18-2, 18-3 on Corporate Tax and Capital Structure
• *Fernandez, P., Aguirreamalloa, J., & Linares, P. (2013). Market risk premium and risk free rate used for 51 countries in 2013: a survey with 6,237 answers. IESE Business School. (this is an optional reading)

1. Install the Decision Tools Suite software (I, U)
2. Lesson 1 Exercise 1: Super Normal Growth Model (I, U)
3. Lesson 1 Exercise 2: WACC with Changed Capital Structure (I, U)
4. Solve Assignment Problems from Chapter 2 of Benninga text (I, U)
5. Check access for YouSeeU (I, U) Note: You will need to access your class at YouSeeU in order to be enrolled in the course space.
6. Complete Quiz 1 (I, G)
   

All assignments are due by 3:00 AM Eastern Time (ET) on Monday unless noted otherwise.

Week 2

• Bienfait, F. A Note on Valuation Models: CCFs vs. APV vs. WACC. IFM Final Paper. Harvard Business School. Retrieved from http://people.hbs.edu/mdesai/IFM05/Bienfait.pdf
• *Brealey, R., Myers, S., & Allen, F. (2011). Principles of Corporate Finance. 10th edition. McGraw-Hill. (The readings from this text will also be referred to as BMA).
  Read BMA Chapter 19 on Financing and Valuation
• WACC Tutorial (Optional Readings):
  • WACC PDF File: http://pages.stern.nyu.edu/~igiddy/articles/wacc_tutorial.pdf
  • WACC Excel File: http://www.stern.nyu.edu/~igiddy/spreadsheets/WACC_tutorial.xls

1. Lesson 2 Exercise 1: Free Cash Flow (FCF): FCF Calculations Exercise (I, U)
2. Lesson 2 Exercise 2: Two Methods of FCF Calculation (I, U)
3. Lesson 2 Exercise 3: Valuation - Equivalence of Three DCF Valuation Methods, a Multiple-Period Case (I, U)
4. Solve Assignment Problems from Chapter 19 of Brealey-Myers-Allen text (I, U)
5. Complete Quiz 2 (I, G)
   

All assignments are due by 3:00 AM Eastern Time (ET) on Monday unless noted otherwise.

Mid-Course Survey (I, U):

Complete the mid-course survey.

Residency Day 1: Monday

Lecture:

• Forecasting Financial Statements - Free Cash Flows & Valuation Primer (Lecture and Demonstration)

Readings:

• Read the assigned textbook reading.
• Review 10-K for CostCo and Walmart (WMT)
• Read the Sample S&P Stock Reports. Note: This reading can be accessed through the Penn State Library's database.
• Review the Stock Report Valuation Template as this will be used in completing your team reports.
• Review the Team Project Presentation Evaluation Rubric as this will be used when evaluating the team project presentations.

1. Review the following items which will be distributed in class: project report template, grading rubric, and information on stock reports. Note: There are no assignments due for this day.

Residency Day 2: Tuesday

Lecture:

• Putting it All Together for Valuation of Costco (Forecasting Revenue & FCF)
• Monte Carlo Simulation - Introduction: Basic Simulation with @RISK (Lecture and Demonstration)
• Monte Carlo Simulation – Application: Acquisition Valuation (Lecture)

Readings:

• Read the assigned textbook reading.
• *Holden, C. W. (2012). Excel Modeling in Corporate Finance. 4th edition. Prentice Hall. Chapter 16.
• Winston, W. (2008). Financial Models using Simulation and Optimization II. Palisade Corporation. Chapter 20.
• Reference: Guide to Using @RISK 6.0 - Help file name: "RISK6_EN.chm" in @Risk program folder,  ". .\Program Files (x86)\ \Palisade\RISK6\Documentation\English\"

*Note: This reading can be accessed through the library's electronic reserves system.

1. You will start to work on Team Project 1 (Wal-mart) 10-K. (T, G)
2. Tomorrow (Day 3), the class will listen to the latest quarter AMETEK Inc. Earnings Conference Call (the recording is archived on Ametek website, Investor section). The final project is the valuation of AMETEK (trading symbol: AME) carrying 40% weight for the course grade. One of the important tasks for the final project is to form your assumption on AMETEK’s future performances, including revenue growth rate, factors affecting profits, and capital expenditure. You will profit much from listening from the Earnings Conference Call and studying the latest annual report. So it is strongly advised to read the annual report and 10-K this evening before you will listen to the recorded earnings conference call.  To access the annual report, please see AMETEK's - Investor Relations - Financial Reports website. To access the 10-K filing in Excel, please see AMETEK's - Investor Relations - SEC Filings website.

Residency Day 3: Wednesday

Lectures:

• Quiz 3 on Monte Carlo Simulation
• Monte Carlo Simulation – Application: Acquisition Valuation - continued
• Costco - Valuation Revisited with Monte Carlo Simulation (Application of Monte Carlo Simulatino to Costco)

Recorded Earnings Conference Call

Readings:

• *Winston, W. (2008). Financial Models using Simulation and Optimization II. Palisade Corporation. Chapter 23.

*Note: This reading can be accessed through the library's electronic reserves system.

1. Quiz 3 on the Monte Carlo Simulation: Quiz 3 will be completed in class and submitted to the Quiz 3 Drop Box. (I, G)
2. Continue working on Team Project 1 (Wal-mart) 10-K. (T, G)

Residency Day 4: Thursday

Lecture:

• Costco - Valuation Revisited with Monte Carlo Simulation - continued

Team Project

Readings:

• There are no readings due for this day.

1. Complete work on Team Project 1 (Wal-mart) 10-K.
   • Prepare the report & presentation (doc, xls, ppt) for the WMT project.
   • Submit the Team Project 1 Wal-mart 10-K report (which will consist of three files, including the research report, PowerPoint presentation, and the Excel workbook) to the Project 1 Dropbox. (T, G)
   • Note: Name your files using the following naming convention: TeamName_WMT.docx, TeamName_WMT.pptx, and TeamName_WMT.xlsx.

Residency Day 5: Friday

• There is/are no lecture or readings for this day.

1. Team Project Presentation -
   • Each team will present the Team Project 1 Wal-mart Valuation with Monte Carlo Simulation (20-minute presentation and 10-minute Q&A). (T, G)

MFIN Residency Survey (I, U):

Complete the MFIN Residency survey.

Week 4

• There are no readings due for this week.

1. Final Exam (I, G)
2. You will start to work on the final project, Team Project 2 (company TBA) (T, G).

Week 5

• There are no readings for this week.

1. Final Project - Team Project 2 (Company - TBA) (T, G)
   
   Part 1: The Final Project will consist of three files which will need to be submitted from your team:
   • Research Report (As a reminder, the Stock Report Valuation Template was distributed during the residency week to assist you with the report.
   • Analysis Excel file.
   • Presentation (PowerPoint file) (As a reminder, the Team Project Presentation Evaluation Rubric was distributed during the residency for your team to use as a guideline in preparing for the team project presentations.)
   
   Part 2: Recorded Video Presentation with PowerPoint, which will be completed as a team (As a reminder, the Team Project Presentation Evaluation Rubric was distributed during the residency for your team to use as a guideline in preparing for the team project presentations. (Note: This will be completed through YouSeeU. Please refer to the Course Assignments section of the syllabus for more information about the presentation for the Final Project.)
   
   Part 3: Final Project Peer Evalution will be completed individually.