FIN 7220 (A01) (3.0

FIN 7220 (A01) (3.0 CH)
ADVANCED SEMINAR IN FINANCE
SUMMER 2016
INSTRUCTOR
Name:
Phone:
Fax:
Email:
Elena Mitropolsky
[email protected]
Office Location: TBD
Office Hours: By appointment
Class Time: Tuesdays & Thursdays, 6:15 to 9:30pm
COURSE DESCRIPTION
A case-oriented course that will require extensive preparation and presentation of selected cases in corporate
financial management; emphasis on the application of theoretical models of finance to real problems.
COURSE OBJECTIVES
On course completion, you should be able to:





Analyze and solve complex financial issues in a variety of industries in domestic and global environment
Apply and demonstrate various valuation methodologies as they relate to business combinations,
funding, selling, and investment decisions
Identify complex multi-faceted business issues related to corporate strategy and growth, funding
decisions, new product development
Facilitate making investment decisions using incomplete information by applying sensitivity analysis
and other related techniques
Perform comprehensive financial analysis for private and public companies
COURSE MATERIALS
Custom ordered Case Book available in the UofM Book Store.
Recommended Reading:
 Copeland, Koller, Murrin (McKinsey & Company), Valuation, Measuring and Managing the Value of
Companies (University Edition), any edition from 3 to 6 will do, John Wiley & Sons

Berk, J., P. DeMarzo, and D. Stangeland, Corporate Finance (3rd Canadian Edition), Pearson Canada
1
AACSB Assurance of Learning Goals and Objectives.
The Asper School of Business is proudly accredited by AACSB. Accreditation requires a process of continuous improvement
for the School and our students. Part of “student improvement” is ensuring that students graduate with the knowledge and skills
they need to succeed in their careers. To do so, the Asper School has set the learning goals and objectives listed below for the
MBA Program. The checked goal(s) and objective(s) will be addressed in this course and done so by means of the items listed
next to the checkmark.
Goals and
Objectives
Addressed in
this Course
Goals and Objectives in the MBA Program
1
Strategic Thinking Students will think critically and creatively about solutions to
Course Item(s)
Relevant to these
Goals
and Objectives

organizational problems, considering short-term and long-term goals, resources, risks, and
opportunities.
A. Students are able to identify situations where strategic thinking is necessary.

2
B. Students are able to identify different strategies.

C. Students are able to perform a basic strategic analysis.

D. Students are able to recommend strategic alternatives and their implementations.

Global Perspective Students will adopt a global mindset in considering organizational
Case assignments
and class
discussions

decisions.
A. Students have an awareness of global diversity, and multicultural awareness.
B. Students have an awareness of different global perspectives.
C.
3
Students have been exposed to global business environments through course
materials

International case
assignments, Group
Project

Ethical Mindset Students will consider ethical and moral issues when analyzing and
A. Students demonstrate an understanding of the responsibility of business in society.


B.
C.
Students demonstrate an understanding of ethical decision making.
Students demonstrate moral development in ethical decision making.


D.
Students demonstrate an understanding of the responsibilities of a leader’s role as it
relates to ethics.

recommending solutions to organizational problems.
4

Quantitative and Financial Proficiency Students will demonstrate the ability to
Case assignments

approach organizational issues using quantitative and financial analysis.
A. Students are able to identify that a problem containing a quantitative aspect exists.

B. Students are able to apply financial methodologies in the answering of business
questions.
C. Students are able to demonstrate a basic financial proficiency in understanding the
role and flow of money in an organization.
D. Students are able to interpret the results of a financial analysis.

2


Entire course
COURSE ASSESSMENT
Student progress will be assessed through:






Assignment 1 (worth 15%)
Assignment 2 (worth 10%)
Assignment 3 (worth 10%)
Case discussion (worth 10% + bonus points)
Individual Project (worth 30%)
Group Project (worth 25%)
Final grades will be assigned as follows;
Cumulative Marks
90-100
80-89
75-79
70-74
65-69
60-64
50-59
Below 50
Grade
A+
A
B+
B
C+
C
D
F
GPA
4.5
4.0
3.5
3.0
2.5
2.0
1.0
0.0
Performance
Excellent
Very Good
Good
Satisfactory
Marginal
Unsatisfactory
Unsatisfactory
Unsatisfactory
NOTE: Class attendance is required. Missing more than 20% of this course due to absences may result in a
failing grade. It is your responsibility to inform your professor in advance of your absence and the reason
for it (medical documentation or employer note if away for a work commitment) is required. The
professor decides how to deal with the impact of missed classes on your final grade.
ACADEMIC REGULATIONS
Students are encouraged to contact Accessibility Services at 474-6213 or the instructor should special
arrangements need to be made to meet course requirements. For further information please visit
http://umanitoba.ca/student/saa/accessibility/
EXAM RESCHEDULING POLICY
Students are expected to write ALL exams with their classmates at the scheduled exam time. Requests for final
exam rescheduling must be referred to the Graduate Program Office (rescheduling of midterm tests is overseen
by individual instructors) . Please refer to Missing a Test/Exam on page 14 of the MBA Student Handbook for
further information:
http://umanitoba.ca/faculties/management/programs/graduate/mba/media/Student_Handbook__August_2014.pdf
UNCLAIMED ASSIGNMENT POLICY
Pursuant to the FIPPA Review Committee’s approved recommendations as of August 15, 2007, all unclaimed
student assignments will become the property of the faculty and will be subject to destruction six months after
the completion of any given academic term.
3
TENTATIVE COURSE SCHEDULE
Date
June
14
June
16
Case / Topic
1. Introduction
2. Valuation re-cap lecture
3. Assigning and explaining Group project and
Individual Project
Suggested Reading
1. Comprehensive size-up of a firm

“BEST FINANCIAL SERVICES INC”
2. Assignment 1 distributed (due June 28) spreadsheet

3. Accounting irregularities and restatements, goodwill
impairment testing “PENN WEST PETROLEUM

LTD”
Goodwill impairment testing
4. Assignment 2 (due June 21- Cost of capital)

June
21
1. Capital structure management, dealing with leases
“AIR CANADA: BOND RATINGS AND OFFBALANCE SHEET OPERATING LEASES”
2. Cost of capital
“BC TELECOM”




June
23
1.Funding decision
“BORDERS HOTEL CORP”
1a. Funding choices for a start up
“SENSEGIZ: FUNDING A START-UP”
3. Assignment 3 – due June 30 (Dupont)


Tips for case analysis
http://zicklin.baruch.cuny.edu/zk/competitions/the-basics/what-yourpeers-are-saying
A guide to case analysis-McGraw Hill Higher Education
http://www.smallbusiness.wa.gov.au/profit-margin-ratio-s-and-breakeven-analysis/
Bruner et al., “Best Practices in Estimating the Cost of Capital:
Survey and Synthesis”
Gitman and Vandenberg, “Cost of Capital Used by Major U.S. Firms”
Kerins et al., “Opportunity cost of capital for Venture capital investors
and entrepreneurs”
Miller, “The Modigliani-Miller Propositions After Thirty Years”
Mittoo and Bancel, “The Determinants of Capital Structure Choice: A
Survey of European Firms”
Drobetz and Fix, “What are the Determinants of the Capital
Structure? Some Evidence for Switzerland”
Sonja Markova and Tatjana Petkovska-Mircevska, “Financing
Options for Entrepreneurial Venture,” Amfiteatru Economic Journal,
(11)26, June 2009, pp. 597-604
4
June
28
1.Dividend Policy
TELUS
2. Valuation of a private firm
“FINCHCO”





June
30
July
5
1. Valuation of a private firm
“FINCHCO” - continued
2. Valuation of a publicly traded software firm
“CONSTELLATION SOFTWARE”

1. Valuing a Financial Institution
“STANDARD CHARTERED BANK: VALUATION
AND CAPITAL STRUCTURE”




July
7
Valuation: IPO
1. LULULEMON AMERICA
2. FACEBOOK'S INITIAL PUBLIC OFFERING


Dividend Irrelevant Theory
http://pages.stern.nyu.edu/~adamodar/New_Home_Page
/invfables/dividirrelevance.htm
Baker and Powell, “Determinants of Corporate Dividend Policy: A
Survey of NYSE Firms”
Baker, Powell and Veit, “Revisiting Managerial Perspectives on
Dividend Policy”
The Value of Control: Implications for Control Premia, Minority
Discounts and Voting Share Differentials Aswath Damodaran
The Value of Control, Aswath Damodaran
The Value of Control: Implications for Control Premia, Minority
Discounts and Voting Share Differentials Aswath Damodaran
The Value of Control, Aswath Damodaran
Stephen A. Ross, Randolph W. Westerfield, Jeffrey Jaffe, Joseph
Lim, Ruth Tan and Helen Wong, Corporate Finance, Chapters 9, 10,
11 and 13, Asia Global Edition, McGraw Hill, Singapore, 2015
Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan,
Joseph Lim and Ruth Tan, Fundamentals of Corporate Finance,
Chapters 8, 13 and 14, Asia Global Edition, 2nd Edition, McGraw
Hill, Singapore, 2016
KPMG LLP, “Basel III: Issues and Implications,” April 7, 2011,
www.kpmg.com/global/en/issuesand
insights/articlespublications/documents/basell-iii-issuesimplications.pdf, accessed August 26, 2015
The Value of Synergy, Aswath Damodaran
Dark side of valuation, Aswath Damodaran
5
July
12
1.Individual Project due, case discussion
“THE MAPLE ACQUISITION OF THE TMX
GROUP INC.”
2.Real options
AGNICO-EAGLE (if have time)



July
14
Group project presentations
“BANKINTER: GROWTH OPTIONS DURING THE
SPANISH CRISIS”




Stephen R. Forester and Dominique Fortier, “A Note on Mergers and
Acquisitions and Valuation (Revised),” Ivey Publishing, October 4,
1995
Gregor Andrade, Mark Mitchell, and Erik Stafford, “New Evidence
and Perspectives on Mergers,” Journal of Economic Perspectives,
2001, 15(2), pp. 103–120. Damaodaran, “The Promise and Peril of Real Options”
Jonathan Berk and Peter DeMarzo, Corporate Finance, 3rd Edition,
Pearson Education, Boston, 2013, pp. 930–960. Patrick A. Gaughan, Mergers, Acquisitions and Corporate
Restructurings, 5th Edition, John Wiley & Sons, New Jersey, 2011,
pp. 538–606. Patrick Beitel, Dirk Schiereck and Mark Wahrenburg, “Explaining
M&A Success in European Banks,” European Financial Management,
2004, 10(1), pp. 109–139 Carliss Y. Baldwin, “Evaluating M&A Deals — Equity Consideration
(Revised),” Harvard Business Publishing, July 8, 2011, available from
Ivey Publishing
6
ACADEMIC INTEGRITY
I.H. Asper School of Business, The University of Manitoba
It is critical to the reputation of the I. H. Asper School of Business and of our degrees that everyone associated with our
faculty behaves with the highest academic integrity. As the faculty that helps create business and government leaders, we
have a special obligation to ensure that our ethical standards are beyond reproach. Any dishonesty in our academic
transactions violates this trust. The University of Manitoba Graduate Calendar addresses the issue of academic dishonesty
under the heading “Plagiarism and Cheating.” Specifically, acts of academic dishonesty include, but are not limited to:
o
using the exact words of a published or unpublished author without quotation marks and without referencing the
source of these words
o
duplicating a table, graph or diagram, in whole or in part, without referencing the source
o
paraphrasing the conceptual framework, research design, interpretation, or any other ideas of another person,
whether written or verbal (e.g., personal communications, ideas from a verbal presentation) without referencing
the source
o
copying the answers of another student in any test, examination, or take-home assignment
o
providing answers to another student in any test, examination, or take-home assignment
o
taking any unauthorized materials into an examination or term test (crib notes)
o
impersonating another student or allowing another person to impersonate oneself for the purpose of submitting
academic work or writing any test or examination
o
stealing or mutilating library materials
o
accessing tests prior to the time and date of the sitting
o
changing name or answer(s) on a test after that test has been graded and returned
o
submitting the same paper or portions thereof for more than one assignment, without discussions with the
instructors involved.
Many courses in the I. H. Asper School of Business require group projects. Students should be aware that group projects
are subject to the same rules regarding academic dishonesty. Because of the unique nature of group projects, all group
members must exercise extraordinary care to insure that the group project does not violate the policy on Academic
Integrity. Should a violation occur on a group project, all group members will be held jointly accountable, no matter what
their individual level of involvement in the specific violation.
Some courses, while not requiring group projects, encourage students to work together in groups (or at least do not
prohibit it) before submitting individual assignments. Students are encouraged to discuss this issue as it relates to
academic integrity with their instructor to avoid violating this policy.
In the I. H. Asper School of Business, all suspected cases of academic dishonesty involving a graduate student (i.e. MBA,
MSc or PhD student) will be reported directly by the instructor to the Dean of the Faculty of Graduate Studies.
7
FACULTY BIOGRAPHY
I.H. Asper School of Business, The University of Manitoba
Elena Mitropolsky, MBA, CFA
Accounting and Finance
I.H. Asper School of Business
Elena is a seasoned practitioner who has been involved in the direct analysis and valuation of financial
institutions, as well is in Corporate Finance, since 1998. During that time, she has worked at a number of global
investment banks, consultancies, and insurance companies in Canada and in the UK. In 2012, Elena taught
Investments at Cass Business School in London. She has been a Chartered Financial Analyst (CFA) since 2001,
and has an MBA degree from the University of Ottawa (obtained in 1998).
8