FNAN 441: Advanced Topics in Firm Valuation Master Syllabus - Online V2
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 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 fourfold:
- Help students solidify relevant skills learned in FNAN 341
- Help students expand their skills by introducing additional techniques used in valuation
- Help students expand their understanding of the linkage between what’s learned in class and what’s used in practice by bringing in a variety of guest speakers
- Help students develop their communications skills through written assignments & presentations
One key piece 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.
As noted, 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. Some due dates will not be determined in this syllabus, but will be set and communicated when it’s clear which date would be appropriate. Other due dates that are noted in this document may be moved.
For the reasons discussed above, as well as others, the schedule that is provided in this syllabus is tentative. Students in the course should be comfortable with some uncertainty and being flexible.
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
- Laptop (or desktop 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 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
Student scores on various graded components, which are all out of 100 points, are each multiplied by the relevant weight from the following table and the resulting sum, plus any extra credit earned, is the numeric grade for the course that determines the letter grade for the course.
| Assessment Type | Assessment | Weight (in %) |
|---|---|---|
| Assignments (30%) | Various assignments, worth a differing number of points | 30,0 |
| Individual valuation project (50%) | Financial model | 11.0 |
| Full valuation analysis | 14.0 | |
| Written report | 20.0 | |
| Presentation | 5.0 | |
| Merger & acquisition (10%) | Written report & analysis | 7.0 |
| Presentation | 3.0 | |
| Final exam or project (10%) * | Exam or project | 10.0 |
* It is possible that the final exam or project will be optional or not administered at all. It is also possible that there will not be presentations associated with the M&A project. If either of these changes (or any others) wind up occurring, the weights on all assigned items will be scaled up, so they total 100%.
Letter grades for the course are determined from numeric grades for the course and the ranges described in the following table:
| Grade | Range |
|---|---|
| A+ | 98.0 or greater |
| A | 94.0 or 97.9 |
| 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 | 59.9 or less |
Numeric grades for the course are rounded up to the nearest tenth (1 decimal place) and final letter grades are based on the rounded figure. For example, 89.9001 would round up to 90.0, which would be an A-, but 89.9000 would round up to 89.9, which would be a B+. Grades for individual components are rounded up to 1 decimal place. Curves and more generous grade ranges are possible. 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, including the relevant weights on various components, may be modified if events, conditions, etc. are determined to warrant changes.
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.
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
Late submissions (other than presentations) will be accepted without any deductions or penalty for up to 7 days (168 hours) after the project is due (or until the University-assigned day & start time for the final exam session scheduled for this class). This grace period is being made available because of the unpredictability of COVID. If you think additional special arrangements, like a further extension, may be relevant, contact me and we can discuss the situation. In general, extensions beyond the grace period are likely to be rare. If an issue isn’t raised before the grace period starts, additional special arrangements are unlikely. You’re encouraged to view the initial, pre-grace-period deadline, not the end of the grace period deadline, as the relevant deadline. If you use the grace period, you do so at your own risk. Outside the rare cases noted above, submissions will either not be accepted once the grace period ends or accepted with a sizeable deduction. Also, make sure to alert me of any submissions made after the initial deadline, so I know to grade them.
In-Class Participation
There are no plans for in-class participation. That said, if student engagement is low, this policy could be changed.
Assignments
Assignments will be worth differing amounts of points. Some assignments, like a post-speaker write-up, will be worth relatively little and others could be worth many more points. The number of points for each assignment will be relayed to students before the assignment is due. Written instructions for each assignment will be posted on Blackboard. A student’s overall semester grade for assignments will be computed as total points earned divided by total points possible (multiplied by 100).
Unless noted otherwise, and this will occur, so pay attention, students can work together on assignments. 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
A (if not the) primary product from this class and a very large source of points is a comprehensive firm evaluation and recommendation. This project will be similar to the one completed as a group project in FNAN 341, except it will be more thorough and done individually. Extensive information on this project will be communicated in class, emailed, and posted on Canvas.
M&A Project
Students will evaluate a possible acquisition involving the firm studied in the valuation project. The exact details of this item such as instructions, possible points, etc. will be provided later in the term. This item will likely 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 2,000 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.
Appendix A: Tentative Course Schedule (Sample)
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. This is especially true for the second half of the semester.
| Date (Sample) | Class | Topic |
| 1/24 | 1 | Introduction to the class and each other |
| 1/26 | 2 | Review financial statement analysis |
| 1/31 | 3 | Review financial statement analysis (who's who) |
| 2/2 | 4 | Revenue |
| 2/7 | 5 | Review financial modeling |
| 2/9 | 6 | Market comps |
| 2/14 | 7 | Balasree Viswanathan |
| 2/16 | 8 | DCF review & WACC & beta (1) |
| 2/21 | 9 | Beta (2) |
| 2/23 | 10 | Elaine Marion |
| 2/28 | 11 | Robert Horstmeyer |
| 3/2 | 12 | Carlos Hernandez Goudet |
| 3/7 | 13 | Review and extend DCF (part 1) – focus on discounting |
| 3/9 | 14 | Review and extend DCF (part 2) – focus on discounting |
| 3/14 & 3/16 | Spring Break | |
| 3/21 | 15 | Review and extend DCF (part 3) |
| 3/23 | 16 | Residual income model |
| 3/28 | 17 | Finish residual income & sensitivity analysis |
| 3/30 | 18 | Sharon Apricena |
| 4/4 | 19 | M & A analysis (day 1) |
| 4/6 | 20 | M & A analysis (day 2) |
| 4/11 | 21 | LBO model (day 1) |
| 4/13 | 22 | Dale Hersey |
| 4/18 | 23 | LBO model (day 2) |
| 4/20 | 24 | Presentations on recommendations (day 1) |
| 4/25 | 25 | Presentations on recommendations (day 2) |
| 4/27 | 26 | Presentations on recommendations (day 3) |
| 5/2 | 27 | M & A presentations (day 1) |
| 5/4 | 28 | M & A presentations (day 2) |
| 5/11 | University-assigned day & time (10:30 am – 1:15 pm) for final exam. Unclear if there will be a final (exam, project, presentation, etc.) and if so, if it will be “take-home” with flexible timing or “in-class” during the assigned window |
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