FNAN 441: Advanced Topics in Firm Valuation Master Syllabus - Online V1
The syllabus will likely be updated throughout the semester to provide more clarity and thoroughness and in response to any weather-related or other events that affect the course.
Course Instructor:
Office Number:
Office Hours:
Email:
Course Meeting Times:
Course Website: Canvas
This course will be delivered on-line, synchronously, which means that we will meet in real time during the days and times assigned for this course.
Course Note
Those of you have taken FNAN 341 with me (and possibly FNAN 303 as well) are probably familiar with my preference for a highly organized and pre-planned class. This course will be structured differently.
This is my first time teaching FNAN 441, so there may be a substantial element of a “let’s see how it’s going” approach. Since I’ve never taught this class before, I’m not sure how long things will take, which topics will resonate with you and which won’t, etc. If we get behind or ahead, we’ll adjust. If we decide to go in a different direction, we can do that as well. Zoom could potentially affect our ability to navigate certain material, so we’ll remain flexible.
I’m also planning to bring in a variety of guest speakers. At this point, it’s not clear when all of them will talk with you. As a result, dates are likely to get shifted so that we can fit in the speakers on days that work for them. In general, due dates will not be determined in this syllabus, but will be set and communicated when it’s clear which date would be appropriate.
For the reasons discussed above, the schedule that is provided in this syllabus is very tentative. In fact, many aspects of the class are tentative, so students in the course should be comfortable with some uncertainty and being flexible.
Course Philosophy and Approach
In FNAN 441, students are treated as individuals who want to learn, develop, and strengthen useful tools and knowledge to promote professional success. The focus of the course is on helping students develop relevant skills valued by potential employers. A lot of the class involves “hands-on” activities. Regular attendance and participation are essential for success in this class and are important parts of the educational experience.
The centerpiece of the course is a comprehensive analysis that students will complete individually. This project is similar to the one produced in FNAN 341, with several important differences: the 441 project is more extensive and will be done individually. My goal is for this to be the type of thorough, highquality product that you would keep in your “portfolio” and could show (and impress) a potential employer.
Honor Code Statement
Students are expected to know and adhere to the George Mason University Honor Code, which deals with actual and attempted acts of cheating, plagiarism, lying, and stealing. Suspected, possible, or potential violations of the Honor Code will be reported to the Honor Committee. More detail on the Honor Code, academic integrity expectations, and classroom behavior standards can be found at the Academic Standards website. Appendix B presents a matrix with typical sanction recommendations for non-freshman undergraduates that was approved by the School of Business faculty and that serves as our guide in this course. Appendix C includes a discussion “good” and “bad” classroom behavior, academic integrity and the Honor Code statement, the George Mason diversity statement, and the School of Business undergraduate learning goals.
In this class, students may be allowed to work with each other to better learn and understand the material. When collaboration is allowed, each member of a team must actively participate and contribute to the joint effort. Students cannot simply copy or receive (or provide) answers. Students are responsible for knowing what constitutes cheating or a different Honor Code violation and are encouraged to talk with the professor if they are doing any type of collaborative work to make sure it is not a violation of the Honor Code. See me if you have any question.
Course Description, Objectives, and Goals
Topics covered in FNAN 441 include the analysis of financial statements, development of financial models, and application of valuation techniques. The course objectives are for students to:
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Objective 1: Understand and apply various valuation techniques to determine the value of a firm and its equity
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Objective 2: Understand the intuitive concepts of financial analysis and apply them to financial statement analysis, financial model building, and valuation
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Objective 3: Think critically about the role of financial statements and business analysis for investment decisions
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Objective 4: Apply various analysis and valuation techniques using Excel
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Objective 5: Define finance problems in a critical way such that a solution is more readily apparent, clearly identified, and presented
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Objective 6: Build a comprehensive Excel workbook that will progress through data collection, analysis, forecasting, and valuation using the concepts and tools provided in this course
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Objective 7: Strengthen their ability to communicate complex concepts and analysis orally, graphically, and in writing in a clear and meaningful way
Required Items
- Access to a computer that meets the School of Business Minimum Computing Requirements. The key tools and software packages that you will need are Microsoft Excel, Word, and PowerPoint; the ability to access the Internet; and a functioning video camera and microphone that feed or stream audio and video in real time to or through the Internet. Although there are no current plans to require LockDown Browser or Respondus Monitor, there is a possibility that students may be asked to use those tools.
- Canvas: Students must have access to Canvas, an on-line course management system that enables students to receive messages, observe grades, submit assignments, and access course material such as overheads, videos, and other relevant material. Students should not use the email feature associated with Canvas.
- George Mason University Email Account: Students are expected to have their George Mason email accounts activated, regularly check their inboxes, and keep adequate space available so that they can receive (and, of course, read) emails. Note that to help ensure privacy, faculty and students need to use their George Mason email accounts when corresponding with each other.
Course Schedule
As noted, plans for the course may change during the semester, depending on our progress, guest speakers, and decisions by the University or School of Business regarding the academic calendar. Any changes will be motivated by my goal of creating a high-quality student learning experience. If changes are made, I will notify the class via email and a revised schedule on Canvas. The current schedule for the course is presented in Appendix A.
Course Grading
Overall course grades will be based on the course average, which equals total points earned divided by total points possible, rounded up to the tenth of a percent. As noted repeatedly in this syllabus, there is some uncertainty regarding what and how much will be covered this term, so this grading approach is consistent with that uncertainty. The relative weights on various elements will depend on the amount and nature of material covered and assessments assigned.
Curves and more generous grade ranges are possible, but final semester letter grades are only changed if there is a grading or calculation error. Grades are not raised because a student is extremely close to the cutoff between two grades. The grading policy for the course may be modified if events, conditions, etc. are determined to warrant changes. The following table lays out the average needed for various grades.
| Course Grade | Course Average |
|---|---|
| A | 94.0 or higher |
| A- | 90.0 – 93.9 |
| B+ | 87.0 – 89.9 |
| B | 83.0 – 86.9 |
| B- | 80.0 – 82.9 |
| C+ | 77.0 – 79.9 |
| C | 70.0 – 76.9 |
| D | 60.0 – 69.9 |
| F | 0.0 – 59.9 |
The following table provides some information on the number of points relevant for various items in the course. I recognize there’s a lot of ambiguity. However, until the complexity and demands or various assessments are known, I’m reluctant to assign points. The point values for any graded item will be known before the due date and time.
| Assessment Type | Points |
|---|---|
| In-Class Participation | 40 per class |
| Assignments | 40 – 500 per item |
| Valuation project, recommendation | 4,000 |
| Valuation project, M&A | 500 – 1,500 |
| Valuation project, LBO | 500 – 1,500 |
| Final exam or project | 500 – 2,000 |
For written material to earn full credit, it must be clear and easily understandable. If I do not understand all or nearly all of what is being conveyed or if there are typos, grammatical issues, or other similar issues, then deductions will be incurred. If students are concerned about their writing, they are encouraged to make an appointment with the George Mason writing center for help any writing-related assessment in the course. I recognize that clear and accurate writing may be especially challenging for students for whom English is not their native language, which is why I’m encouraging students to use available resources to help ensure that written products are satisfactory.
Late Submissions
In general, late submissions will be accepted for up to 7 days after the due date and time. Assignments will receive a 10 percent penalty for each 24 hours they are submitted after the due date and time. The one exception to this is that submissions that are submitted an hour or less after the initial due date and time will only be penalized 5 percent. For example, if a student submitted 48.5 hours after the due date, they would receive a 30 percent deduction (which is the deduction for anything submitted between 48 and 72 hours late). The penalties associated with the valuation project may be somewhat smaller, given that item’s influence on the overall course grade.
If you submit late (or any time really) and see no grade or a grade of 0 in Canvas, you should contact me if you believe that the missing grade or 0 may reflect that your submission was not graded. It’s possible that did not see the late submission. All issues surrounding ungraded late submissions must be raised by the start of the University’s final exam period. After that, late submissions may not be graded.
In-Class Participation
My goal is for this to be a “hands-on” class, which means that students spend a decent part of each class working alongside me or doing exercises that help reinforce relevant material. Instructions will be given in class as to what each exercise entails, whether students must work alone or can work in groups, how scores will be determined, etc. In most cases, scores are based on active engagement and effort.
Each day of class where points can be earned is worth 40 points. Full credit is earned by being present when roll is taken (which may happen several times in a class and may done either publicly or privately), keeping your camera on during relevant times, participating in in-class activities, and displaying respectful, professional, and appropriate behavior. Points can be earned during the majority of class days, but there will be at least one class (the first day of the semester) and possibly more when there will be no points to be earned.
Flexibility is built into the grading methodology. First, the 3 lowest in-class participation scores are dropped. Second, excused absences, tardiness, early departure, etc.) can be made up. If you miss a day, part of a day, or an activity for a reason you believe is excusable, contact me. If the excuse is classified as excused, then an alternative way to earn the in-class points may be provided. In general, documentation will be required. Also, students should contact me within 1 week of the affected day. Only in cases where the student was unable to reach out within a week would students receive a “late” opportunity to make up an excusable situation after the 1-week mark. Note that tech difficulties do not generally result in a situation being considered excused.
Assignments
Assignments will be worth differing amounts of points. Some assignments, like a post-speaker write-up, will be worth relatively little and others will be worth as much as 500 points. The number of points for each assignment will be relayed to students before the assignment due. Written instructions for each assignment will be posted on Canvas.
Unless noted otherwise, students can work together. However, the purpose of collaboration is to enhance learning, not free riding. Therefore, each member of a group that works together must actively contribute. Cheating is not permitted and will result in an allegation of an Honor Code violation. If you do anything other than work alone, you are encouraged to ask me whether your approach would be considered cheating. An obvious example (but not the only form) of cheating is when a student copies or receives answers from another person or an unauthorized source (note that this semester’s Blackboard site is an authorized source). Students who work together must submit different products, which means that the firms, numbers, conditions, situations, etc. should be different for each student. Students cannot work together, produce a single output, and then submit separate documents with that same output. Also, small tweaks to a common output are not acceptable either. Each student’s output should be unique and substantially different than that of others they collaborated with.
Valuation Project, M&A
Students will evaluate a possible acquisition involving their firm. The exact details of this item such as instructions, possible points, etc. will be provided later in the term. Depending on the amount and nature of the analysis involved, the M&A piece of the valuation project would be worth 400 to 1,600 points. This item may also involve a presentation.
Valuation Project, LBO
Students may possibly evaluate a possible leverage buyout for their firm. The exact details of this item such as instructions, possible points, etc. will be provided later in the term. Depending on the amount and nature of the analysis involved, the LBO piece of the valuation project would be worth 400 to 1,000 points. This item is unlikely to involve a presentation.
Final Exam or Final Project
There may be a final exam or final project (possibly including a presentation) that will be completed during the University’s final exam period. The exact details of this item such as instructions, possible points, etc. will be provided later in the term. Depending on the amount and nature of the work, the final exam or final project would be worth 400 to 1,600 points.
Extra Credit
There are no plans for extra credit opportunities, but they may be offered during the semester.
Office of Disability Services
If a student has a disability or situation for which the professor needs to be made aware, they should schedule a time to discuss this with me in a timely manner. All academic accommodations must be arranged through the Office of Disability Services (ODS), which implements and coordinates reasonable accommodations and disability-related services that afford equal access to university programs and activities. ODS is in the Student Union Building 1, Room 222. Its phone number is (703) 993-2474.
Incompletes
A grade of incomplete may be given to students who are passing the course (with a C or higher) but who may be unable to complete scheduled coursework for a cause beyond reasonable control. An incomplete can only be given if a student is passing the course and has a documented excusable reason such as a serious illness or unanticipated family emergency for being unable to complete the remainder of the work as scheduled. Poor time management or failure to deal with a situation earlier in the semester would not be accepted as a reason for an incomplete.
An incomplete may not be appropriate for a student who misses a significant portion of the semester due to an extended illness or other situation. In these cases, the student should talk to a School of Business academic advisor about a possible non-academic withdrawal.
Safe Return to Campus Statement
All students taking courses with a face-to-face component are required to take Safe Return to Campus Training prior to visiting campus. Training is available in Canvas. Students are required to follow the university’s public health and safety precautions and procedures outlined on the university Safe Return to Campus webpage. Similarly, all students in face to face and hybrid courses must also complete the Mason COVID Health Check daily, seven days a week. The COVID Health Check system uses a color code system and students will receive either a Green, Yellow, or Red email response. Only students who receive a “green” notification are permitted to attend courses with a face-to-face component. If you suspect that you are sick or have been directed to self-isolate, please quarantine or get testing. Faculty are allowed to ask you to show them that you have received a Green email and are thereby permitted to be in class.
Campus Closure
If the campus closes or class is canceled due to weather or other concern, students should check Canvas, email, or other instruction as appropriate for updates on how to continue learning and information about any changes to assignments, projects, due dates, etc.
Course Materials and Student Privacy
Video recordings of class meetings that are shared only with the instructors and students officially enrolled in a class do not violate FERPA or any other privacy expectation.
All course materials posted to Canvas or other course site are private; by federal law, any materials that identify specific students (via their name, voice, or image) must not be shared with anyone not enrolled in this class. Video recordings of class meetings that include audio or visual information from other students are private and must not be shared. Live Video Conference Meetings (e.g., Collaborate or Zoom) that include audio or visual information from other students must be viewed privately and not shared with others in your household.
At least some of the synchronous meetings in this class may be recorded to provide necessary information for students in this class. Recordings will be stored on Canvas and any that include students will only be accessible to students taking this course during this semester.
Appendix A: Tentative Course Schedule
This schedule should be used as guide as to what we plan to cover in the class. It is not necessary a reliable indicator of when certain topics will be covered, guest will speak, etc. as topics may get rearranged, added, or dropped.
| Date | Class | Topic |
| 1/25 | 1 | Introduction to the class and each other |
| 1/27 | 2 | Review financial statement analysis |
| 2/1 | 3 | Revenue in financial modeling |
| 2/3 | 4 | Review financial modeling (part 1) |
| 2/8 | 5 | Review financial modeling (part 2), DCF (briefly), & WACC |
| 2/10 | 6 | Estimating beta |
| 2/15 | 7 | Review and extend DCF (part 1) – focus on cash flows |
| 2/17 | 8 | Review and extend DCF (part 1) – focus on discounting |
| 2/22 | 9 | Guest – Matthew Kurzweil |
| 2/24 | 10 | Residual income model |
| 3/1 | 11 | Sensitivity analysis and Monte Carlo simulation |
| 3/3 | 12 | Guest – Robert Horstmeyer |
| 3/8 | 13 | Review and extend market comps & other valuation issues |
| 3/10 | 14 | M & A analysis (day 1) |
| 3/15 | 15 | M & A analysis (day 2) |
| 3/17 | 16 | M & A analysis (day 3) |
| 3/22 | 17 | Guest – Joshua Cascade |
| 3/24 | 18 | Presentations on recommendation (tentative day 1) |
| 3/29 | 19 | Presentations on recommendation (tentative day 2) |
| 3/31 | 20 | Valuing private companies |
| 4/5 | 21 | Valuation with a subscriber model |
| 4/7 | 22 | LBO modeling |
| 4/12 | 23 | LBO modeling |
| 4/14 | 24 | Presentations on acquisition (tentative day 1) |
| 4/19 | 25 | Presentations on acquisition (tentative day 2) |
| 4/21 | 26 | Guest - Carlos Hernandez Goudet (date TBD) |
| 4/26 | 27 | Guest (speaker & date TBD) |
| 4/28 | 28 | Guest (speaker & date TBD) |
Appendix B: School of Business Recommendations for Honor Code Violations
Approved May 2016
| UG-Non Freshman Students (including transfer students) | ||
| Type of Violation | First Offense | Second Offense |
|
Plagiarism
|
An F in the class; referral to Writing Center; and Academic Integrity Seminar completion | An F in the class; referral to the Writing Center; Academic Integrity Seminar completion; termination from the School of Business; and at least one semester suspension or expulsion |
|
Cheating
|
An F in the class; and Academic Integrity Seminar completion An F in the class; and Academic Integrity Seminar completion, and at least one semester suspension |
An F in the class, Academic Integrity Seminar completion; termination from the School of Business; and at least one semester suspension or expulsion |
| Lying (e.g., providing fraudulent excuse documents, falsifying data) | An F in the class; and Academic Integrity Seminar completion, and at least one semester suspension | An F in the class; Academic Integrity Seminar completion; termination from the School of Business; and at least one semester suspension or expulsion |
| Egregious Violation (e.g., stealing an exam; submitting coursework from another class as original work across multiple courses; lying to an employer about academic performance, false identification or posing as another, in person or online) | An F in the class, Academic Integrity Seminar completion; termination from the School of Business; and at least one year suspension | An F in the class; Academic Integrity Seminar completion; termination from the School of Business; and expulsion |
Note: The Academic Integrity Seminar used by the Office of Academic Integrity cost $100 as of May 2016.
Appendix C: “Good” and “Bad” Classroom Behavior, Academic Integrity and Honor Code Statement, GMU Diversity Statement, and School of Business undergraduate learning goals
“Good” and “Bad” Classroom Behavior
Some important reminders for “good” behavior include coming to class on time; bringing your laptop to work through problems; reading the syllabus and becoming familiar with the course outline, resources, key dates, policies, etc.; asking questions about material and concepts that are not well understood by raising a hand to be called on; minimizing the distraction of a late arrival by entering quietly and not disrupting fellow students; reading all emails sent out by an instructor; reporting knowledge of any possible or potential Honor Code violations; and adhering to the School of Business Standards of Behavior as described as follows:
The mission of the School of Business at George Mason University is to create and deliver high quality educational programs and research. Students, faculty, staff, and alumni that participate in these educational programs contribute to the well-being of society. High quality educational programs require an environment of trust and mutual respect, free expression and inquiry, and a commitment to truth, excellence, and lifelong learning. Students, program participants, faculty, staff, and alumni accept these principles when they join the School of Business community. In doing so, they agree to abide by the following Community Standards of Behavior:
- Respect for the rights, differences, and dignity of others
- Honesty and integrity in dealing with all members of the community
- Accountability for personal behavior
Integrity is an essential ingredient of a successful learning community. Ethical standards of behavior help promote a safe and productive community environment and ensure every member the opportunity to pursue excellence.
The School of Business can and should be a living model of these behavioral standards. To this end, community members have a personal responsibility to integrate these standards into every aspect of their experience at the School of Business. Through our personal commitment to these Community Standards of Behavior, we can create an environment in which all can achieve their full potential.
Some important reminders for “bad” behavior include using any phone, laptop, tablet, etc. during class to engage in any activity that is not directly related to the ongoing class; talking with neighbors about anything unrelated to class; leaving early or taking an unnecessary break in the middle of class; and packing up belongings before class is over and the professor has finished.
Students may only use devices for ongoing class-related activities. Students who use a device inappropriately by surfing the Internet, doing homework for any class, etc. may receive a deduction from their course grade.
Students should not cheat or engage in any form of academic dishonesty. Suspected, possible, or potential violations of the Honor Code will be reported to the Honor Committee.
Academic Integrity and Honor Code Statement
Students are expected to know and adhere to the George Mason University Honor Code, which deals with cheating and attempted cheating, plagiarism, lying, and stealing. Suspected, possible, or potential violations of the Honor Code will be reported to the Honor Committee.
Violations of the Honor Code include, but are not limited to, submitting work completed by another person and representing it as one’s own; communicating about an exam with another person other than a proctor during the exam; having or using an impermissible aid such as unauthorized notes or stored information in a calculator on an exam; looking at or copying another student’s exam work or answers; providing another student with assistance with exam questions during an exam; impersonating a student in the class in order to get credit for that student; asking another person for an impersonation of oneself in order to get credit for oneself; removing an exam from the classroom; obtaining or providing access to all or part of an exam prior to the exam time, and sharing information about exams with others, especially students that have not yet taken the exam, before given permission.
On exams (tests and the final exam), the following calculator-related behaviors and actions are among those considered violations of the Honor Code: using programs in a programmable calculator that have not been reviewed or used in class without the knowledge and consent of the course coordinator; using a programmable calculator to store any information related to an exam for one’s own or another’s benefit; and failing to clear the calculator of all displayed and stored information when a calculator is shared with a student in another exam section.
Students should read this entire syllabus to make sure that they understand course policies with regard to the Honor Code. Students are reminded that they are responsible for understanding the provisions of the Honor Code and that they are encouraged to report any violations they observe.
George Mason University Diversity Statement
George Mason University promotes a living and learning environment for outstanding growth and productivity among its students, faculty and staff. Through its curriculum, programs, policies, procedures, services and resources, Mason strives to maintain a quality environment for work, study and personal growth.
An emphasis upon diversity and inclusion throughout the campus community is essential to achieve these goals. Diversity is broadly defined to include such characteristics as, but not limited to, race, ethnicity, gender, religion, age, disability, and sexual orientation. Diversity also entails different viewpoints, philosophies, and perspectives. Attention to these aspects of diversity will help promote a culture of inclusion and belonging, and an environment where diverse opinions, backgrounds and practices have the opportunity to be voiced, heard and respected.
The reflection of Mason’s commitment to diversity and inclusion goes beyond policies and procedures to focus on behavior at the individual, group and organizational level. The implementation of this commitment to diversity and inclusion is found in all settings, including individual work units and groups, student organizations and groups, and classroom settings; it is also found with the delivery of services and activities, including, but not limited to, curriculum, teaching, events, advising, research, service, and community outreach.
Acknowledging that the attainment of diversity and inclusion are dynamic and continuous processes, and that the larger societal setting has an evolving socio-cultural understanding of diversity and inclusion, Mason seeks to continuously improve its environment. To this end, the University promotes continuous monitoring and self-assessment regarding diversity. The aim is to incorporate diversity and inclusion within the philosophies and actions of the individual, group and organization, and to make improvements as needed.
School of Business Undergraduate Learning Goals
- Goal 1: Our students will demonstrate an understanding of the social, global, ethical, and legal contexts of business and will be able to reflect on the role of the individual in business.
- Goal 2: Our students will demonstrate an understanding of and the ability to apply knowledge of professional skills necessary for success in business including effective business writing.
- Goal 3: Our students will demonstrate technical and analytic skills appropriate for success in business.
- Goal 4: Our students will demonstrate an understanding of and the ability to apply knowledge of core business disciplines including accounting, finance, information systems, management, marketing, and operations management.
- Goal 5: Our students will demonstrate knowledge and skills appropriate for specialization in their majors.
- Goal 6: Our students will demonstrate an understanding of how research in the business disciplines contributes to knowledge and how such research is conducted.
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