FNAN 441 Master Syllabus - Online V1 | Costello College of Business

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.

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:

Objective 1: Understand and apply various valuation techniques to determine the value of a firm and its equity
Objective 2: Understand the intuitive concepts of financial analysis and apply them to financial statement analysis, financial model building, and valuation
Objective 3: Think critically about the role of financial statements and business analysis for investment decisions
Objective 4: Apply various analysis and valuation techniques using Excel
Objective 5: Define finance problems in a critical way such that a solution is more readily apparent, clearly identified, and presented
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
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.
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 Costello College 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.

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.

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)

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