Dr. P.V. Viswanath

pviswanath@pace.edu

FIN 340/ FIN 680F: Valuation of the Firm Fall 2008

73212: Thursdays, 6:00 p.m. to 8:45 p.m. at the New York Campus, Room no. W515
Email: pviswanath@pace.edu Tel: (212) 618-6518
Webpage: http://www.pviswanath.com
Blackboard: http://blackboard.pace.edu

Course Objectives

The primary objective of this course is to provide the student with the theoretical background and analytical tools necessary to value a firm. The course will take a broad perspective rather than a detailed look at a narrow set of valuation problems. However, after taking this course, the student should be well equipped to delve into more advanced valuation issues.

Course Text

• Required: Aswath Damodaran, Investment Valuation, John Wiley and Sons, Second Edition, 2002.
• Recommended: Valuation: Measuring and Managing the Valuation of Companies, Fourth Edition, by Tim Koller, Marc Goedhart and David Wessels, John Wiley and Sons, 2005

Computer Use and E-mail Policy:

You should obtain a Pace e-mail address as soon as possible, so that I can send you e-mail. Any student's Pace e-mail address can be obtained by going to http://appserv.pace.edu/WhitePages/Students.cfm or by going to the main Pace Home Page and clicking on White Pages from the IntraPace section towards the bottom of the page (the default password is the student’s Pace Identification Number).  More information about e-mail address, etc. can be obtained from the DoIT website and clicking on Computer from the left-hand side menu panel.  Even if you have another e-mail address where you wish to get your e-mail, you should still get a Pace e-mail address.  Once you have your Pace e-mail account and password, you can go to the Pace University Student E-Mail Server at http://stmail.pace.edu and have your e-mail forwarded to your preferred e-mail address.  You can find information on how to have your mail automatically forwarded at the DoIT website.  The only way that I can communicate with you is through your Pace e-mail account.  So please get your Pace account information as soon as possible.

Check your e-mail and the FIN 340/ FIN 680F website on a regular basis.  This will enable you to get the maximum from the course. I am available for consultation by e-mail at pviswanath@pace.edu. I check my e-mail practically every day, and, in most cases, you should get a speedy response to any questions.  

We will also be using Blackboard as a gateway for some aspects of the course.  Please log in to Blackboard at the earliest opportunity.    Blackboard login procedures can be found on the appropriate Blackboard site.  Essentially, your login ID for Blackboard will be your email ID, and your password will be your 9-digit social security number (for more details, go to the Blackboard site).  

Course Requirements

Class Attendance and Participation

Class attendance is mandatory and is highly recommended.  This is for two reasons: one, I believe that you will understand the material much better if you attend the class sessions; two, modifications to the class schedule will be announced in class and/or on the BlackBoard website.  Also, on occasion, I conduct classroom exercises, give short quizzes, or assign additional work. If you miss a class session during which we have such a classroom exercise, or additional work is assigned, your grade will be adversely affected for this reason as well.  (Of course, it goes without saying that missing quizzes will affect your grade adversely.)  In any case, you should consult fellow students on what was done during the class time that you missed, and collect handouts for that day's session. You should also bring a calculator to all class meetings.

I also require that you read the Wall Street Journal and/or the business section of the New York Times on a regular basis. Some exam questions will be based on current newspaper and magazine articles that are related to course material. Hence you should cultivate and improve your ability to read newspaper articles critically.  If you do not already subscribe to the Wall Street Journal, you can do so online from the FIN 340/ FIN 680F website.

There are two other reasons why you should try to attend as regularly as possible. One, classroom participation will help your grade. By participation, I mean answering questions and making intelligent comments. Two, we will sometime do learning exercises in class; doing them can help you substantially in understanding the material.  I often also give credit for participation in these classroom exercises.

Assignments and Working with Teams

In this course, the project that you will be working on is the core part of the course, and will lead to a written report. We will be discussing various aspects of the project, and during the course of the term, you will be making presentations in class to help you in the ultimate course product, which is the equity research report. Since there is a lot of work involved, you will be working as a team in the production of this report.

Each team may consist of three to five members. I expect you to form your own teams. (However, if need be, I will assign students to teams, depending upon the need, as I perceive it.)  By the beginning of the second week of classes, each team should give me a filled-out copy of the Team Contract.  The team contract should be filled out in full, and should be signed by all team members. Whether or not you fill out the Team Contract, however, you are still bound by it.

The equity research report that each team will submit must also include a listing of which parts of the assignment were worked on by which team members.  Whether or not a given team member worked on a specific part of the assignment, s/he must be familiar with the entire assignment that is turned in.  I also expect each team member to have a copy of the final version of the submitted assignment; if any team member does not have a copy of the final assignment and/or s/he is not familiar with any part of the submitted assignment, I will reduce that team member's grade for that assignment. 

You may also use teams for joint learning and study -- that is up to the members of each team. Teams may also want to assign members on a rotating basis to keep track of whatever is posted on the Web. However, each student is separately responsible for the material that is put up on the Web. Failure of the designated team member to fulfill his/her duties will not absolve any team member of the responsibility to keep up-to-date vis-a-vis class activities on the Web, or off.

There may be other assignments as well, both in-class and written, during the term. You will be advised during the term regarding these assignments.

Academic Integrity

Any student taking this course is presumed to agree to abide by the school policy on academic integrity, as described on page L-52 of the Graduate Catalog 2006-2007. Please obtain a copy of the catalog and familiarize yourself with the policy.

Disability Policy

School policy regarding disabilities is described on page L-56 of the Graduate Catalog. You can contact the disabilities coordinator at 212-346-1526. Information can also be found on the University webpage.

Exams

There will be a midterm exam and a final. Exams are closed book, but I will allow you to bring in one 8.5" x 11" sheet of paper containing whatever material you wish (two sides). For example, you may want to write out formulas on these sheets. More details on the nature of the exams can be found on the FAQ page.  If you miss an exam without being excused, I cannot give you any credit for that exam.  University policy allows make-ups only for serious personal illness or death in the family, for which documentation may be required.  You can look at past exams and solutions on my website; however, the actual format of the exams may differ substantially from those of previous terms. Please bring your own calculators to the exams; PDAs, however, are not allowed.  Get in touch with me regarding any question you may have regarding the exams, or the course in general. More information regarding the take-home final will be provided during the course.

Short Quizzes

I may give short in-class quizzes.  There can be different kinds of questions on these quizzes e.g. definitions, short questions and media articles.  Some examples of these can be found at the on Practice Problems page on my website -- click on the appropriate topic.

Study Aids

Practice Problems

In addition to the course requirements discussed above, you may want to try your hand at the problems at the end of each chapter. Some of these problems will be discussed in class; however, none of these problems are expected to be handed in (unless so instructed in class), although you may come to see me if you need help with any problem.

I have also prepared a list of practice problems, some of which appeared in exams in previous years.  These have been generated by me, for the most part.  You should also look at the end-of-chapter problems.  I change the format of my exams from time to time, so the exam structure for this term may not resemble that of past exams.  More information will be provided in class.

Media Articles

On my webpages, you will find recent media articles.  From time to time, I will add to this list.  There are several reasons why you should look regularly at these pages.  

• I will be posting interesting and recent articles to this directory.  As such, it will be a useful way for you to keep abreast of topical issues (in addition to your regular perusal of the Wall Street Journal.)
• I will pose questions on the subject matter of several of the articles.  These questions will be good preparation for the media article based questions on the exams.
• You can draw on the articles for classroom discussions.
• These articles and the appended questions are useful preparation for job interviews.

The password, necessary to access the Media Articles section will be announced in class, and can also be found at the Blackboard website. In case of emergency, you can contact me for the password.

Grades

Note that the minimum and maximum quantitative scores for plus and minus refinements to the letter grades will be at my discretion. These will be partly determined by the distribution of student scores within each letter grade category.   I place a high value on effort; at my discretion, I will raise your grade one notch if I feel that you have tried hard to satisfy all the requirements of the course. Finally, I may change the weight of the different factors on your grade, as I may deem necessary.

Prerequisites:

Students must have satisfied all prerequisites for this course, viz. BUS 320/ FIN 647. I will presume complete familiarity with all topics taught in these courses. I expect all students enrolled in FIN 340/ FIN 680F to have the following functional prerequisites:

1. Ability to manipulate equations
2. Knowledge of basic financial mathematics
3. A solid grounding in Time Value of Money
4. Familiarity with Excel
5. English composition: An ability to write a report using basic principles of English grammar and composition

Data Cards

On the index card handed out in class, please fill in the information requested below.  Make sure to number the item that you are responding to.  Leave space on the top right hand side for a photograph.

1. Name
2. Home and Work Phone number; Fax number, if any
3. Email address, other than at pace.edu (for my convenience).  (Note that I will send you email only to your Pace email address)
4. Functional expertise/interest in business administration (e.g. accounting, finance, personnel administration)
5. Work experience, if any (provide particulars of what your duties were)
6. Previous knowledge of finance (if any)
7. Interests outside of business management (such as languages, music, etc.)
8. When did you take FIN 320/ FIN 647?