Course Outline Business Finance 2
Content
30-03-2015
MBA Course Outline
Course:
FIN-507 (BUSINESS FINANCE II)
Class Code:
507
Class NBR:
40443
Instructor:
Dr. Ahmad Junaid
Class Details
Class Timing and Room
02:30:00 PM To 04:30:00 PM
Session Day(s)
TUES,THURS
Credit Hours
3 Credit hours
Consultation Time
Instructor Email
[email protected]
Instructor Contact No.
111422422 2693
1 / 12
Course Description
This course builds on the first introductory course in business finance. Generally it is about financial markets and specifically
it’s about valuing, trading and managing financial assets. Keeping in consideration the dynamics of financial environment
(Markets) in which businesses operate, we take the viewpoint of a user of financial markets. The course is divided into five
parts: the first part introduces the student to the structure and dynamics of financial markets; how securities are traded in
practice, a brief introduction to the microstructure of financial markets in the context of financial crises of 2007 and how
business (corporate) finance fits into the picture. The second part of this course focuses on valuation in practice; more
specifically valuing the inputs such as, the discount rates, risk free rates, country risk premiums, market risk premiums,
growth etc. for any financial model. We link the theory to practice and consider estimation issues particular to the emerging
financial markets. The third part deals with financing and dividend decision a firm faces. In the fourth part different investment
philosophies and strategies will be discussed in the light of portfolio theory. The final part of this course exposes the students
to hedging using financial derivatives such as options, swaps, futures.
The editable contents of this course outline are copyright and intellectual property of "Dr. Ahmad Junaid". Do not
copy without permission of "Dr. Ahmad Junaid".
Teachers Introduction
Dr. Ahmad Junaid holds a PhD in Finance (Joint doctoral program Essec-IAE Aix) from France. Before joining IBA he taught
at two of the top business schools in europe.
The editable contents of this course outline are copyright and intellectual property of "Dr. Ahmad Junaid". Do not
copy without permission of "Dr. Ahmad Junaid".
Teaching & Learning Methodology
Students will be involved fully in classroom discussions by using real world cases. Upon the completion of every module
cases will be used to bring to life abstract concepts, requiring each participant to make decisions and provide solutions. This
will facilitate students with their problem solving, analytical and decision making skills. Keeping in view the importance of
written reports, students will be required to submit their valuation reports in the form of groups (comprising of4-5 participants)
respectively. Detail guidelines on term report will be provided. Good EXCEL skills will come in handy to students in this
module as we will be using worksheets to make business decisions, create charts and perform financial computations.
Students will be exposed to unannounced quizzes on regular basis along with the announced ones. This will require from
them advance reading/study, higher concentration level and superior interaction during classroom lectures. Individual and
Group Assignments will be frequently circulated amongst participants which will be marked on completeness and timely
submission. Apart from the routine quizzes and assignments, self-study problems will also be provided to students.
The editable contents of this course outline are copyright and intellectual property of "Dr. Ahmad Junaid". Do not
copy without permission of "Dr. Ahmad Junaid".
2 / 12
Text Book & pre Course Reading Material
Cases and readings will be provided befor each session
Text Books:
1. Bodie, Kane and Marcus , Investments (hereafter mentoined as BKM)
2. Damodaran on Valuation: Security Analysis for Investment and corporate Finance (here after mentioned as DOV)
The editable contents of this course outline are copyright and intellectual property of "Dr. Ahmad Junaid". Do not
copy without permission of "Dr. Ahmad Junaid".
Prerequisite Skills & Knowledge
Basic understanding of financial assets and markets.
Business Statistics
Basic understanding of Financial statements
Basics of Risk and Return
Concept of Time Value of Money
Basic Equity Valuation models such as Dividend discount Model, Discounted Cashflow Model.
Concepts such as leverage, Capital structure, Proforma statements.
Course Learning Objectives
To give the students capacity to understand theory of finance and relate it to practice.
To relate Business finance in the bigger picture of financial markets
To understand the financial aspect of corporate decision making
To develop understanding regarding the differences in valuing businesses in emerging and developed financial markets
To develop management and leadership competencies and behavior such as team work and communication.
To develop critical thinking.
The editable contents of this course outline are copyright and intellectual property of "Dr. Ahmad Junaid". Do not
copy without permission of "Dr. Ahmad Junaid".
3 / 12
Course Learning Outcomes
Participants will be able to translate qualitative assessment of business into quantitative inputs in their financial models
Exhibit interpersonal and teamwork skills.
Participants will be able to value financial assets by selecting the best qualifying model amongst different financial models,
depending on the nature of business under consideration .
They will be able to tweak their models when faced with the complexities of emerging markets.
By the end of the course participants will be able to write and present financial valuation/ recommendation reports.
Participants will be able to assess different financial risks faced and how to reduce them (Hedging).
Participants will be able to differentiate amongst different investing philosophies and styles and develop their own investment/
trading plan.
They will be able to use statistical software (Excel) to develop valuation model.
The editable contents of this course outline are copyright and intellectual property of "Dr. Ahmad Junaid". Do not
copy without permission of "Dr. Ahmad Junaid".
Course Plan
Session
No.
Chapter/Reading/Case
Session Topics
Assessment/Questions
1,2
Chapter 1-5 BKM
PART 1
Introduction to the course.
Financial Markets,
Background. How Securities
are traded, Market
Microstructure
Will be provided
3,4
Chapter 1 DOV
Introduction to Valuation
Models (DCF, FCFE,FCFF)
Will be provided
Chapter 2 DOV, Chapter 9 BKM.
PART 2
Estimating Discount rates
Will be provided
5,6,7,8,
9,10,11
Case: Marriott Corp.: The Cost of Capital
Readings: HBR note Using APV a better: too for
Valuation
Readings: HBR note The Effects of Debt Equity
Policy on Shareholder Return Requirements and
Beta.
Cost of Equity
CAPM
Estima
ting
Risk
Free
Rate
Estima
ting
Equity
Risk Pr
emium
s
Estim
ating
Beta
APM
Multi Factor Models
Proxy
Cost of Debt
Estimating
Synthetic
Ratings
4 / 12
Discounted
cost of debt
Cost of Capital
Some issues
in estimating
cost of capital
of a firm
WACC VS
APV
12,13,1
4,15,16,
17
Chapter3-4 DOV
Case: Flash Memory, Inc.
Estimating Cash Flows
Will be provided
Free Cash flows to
equity and Firm
Moving from reported
to actual Earnings
Updating
Earnings
Correcting
Accounting
earnings
Dealing with
exceptional
Charges
Accounting
Malfeasance
Dealing with
Negative
Earnings
Estimating Growth
Historical Growth
Analyst Forecasts
Fundamental Growth
Expected
Long term
growth in EPS
Expected
Long term
growth in Net
income
Expected
Growth in
EBIT and
Fundamentals:
Stable ROC
and
Reinvestment
Rate
Operating
Income
Growth when
ROC is
Changing
Estimating
Growth when
Operating
Income is
Negative or
Margins are
changing
5 / 12
18,19
20
21,22,2
3
24,25
Chapter 5-6 DOV
Reading: HBP Article What's It Worth?: A
General Manager's Guide to Valuation
Case: Valuation of AirThread Connections
Closure in Valuation
Notes will be provided
PART 3
Business and Financial Risk,
Estimating the Optimal
Capital Structure under the
MM Theory
Will be provided
Notes will be provided
Case: Blaine Kitchenware, Inc.: Capital Structure
Case: Bed Bath & Beyond: The Capital Structure
Decision
Cost of Equity and Firm’s
value with and without
leverage; Trade-off Theory,
Signaling Theory
Will be provided
Notes will be provided
Case: Daktronics (E): Dividend Policy
Will be provided
Estimating Terminal
Value
Liquidation
Value
Multiple
Approach
Stable Growth
Model
Growth Patterns
Estimating Inputs for
stable growth
Dividend Policy
Will be provided
Dividend
Theories
Dividend
payout policies
Factors
affecting the
dividend policy
Stock Dividends and
Repurchases
26,27
Notes will be provided
PART 4
Investment Philosophies
Will be provided
Asset Allocation
Passive Asset
Allocation
Marko
witz
portfoli
o
Active Asset
Allocation
Market
Timing
Approa
ches
Security Selection
Value
Investing
Growth
Investing
Momentum
Investing
Reversal
Investing
6 / 12
Performance Measurement
28
Ch 20,21,22 BKM
PART 5
Will be provided
Real Options
Futures
Forwards
Swaps
Options
Strategies and Payoffs
The editable contents of this course outline are copyright and intellectual property of "Dr. Ahmad Junaid". Do not
copy without permission of "Dr. Ahmad Junaid".
7 / 12
Marks Distribution
Marks Head
Sequence No.
Marks
Total Marks
Course Learning
Outcomes
TERM EXAM
2
25
25
3,4
PROJECT
3
20
20
1,2,3,4,5,6,7,8
QUIZ
4
15
15
1,3,4,5,6,8
CLASS PART
5
15
15
1,2,6,7
FINAL EXAM
6
25
25
1,2,3,5,8
Total Marks
100
Program Objectives
Course Objectives
1
2
To give the students capacity to understand theory of finance and relate it to
practice.
X
X
To relate Business finance in the bigger picture of financial markets
X
To understand the financial aspect of corporate decision making
X
To develop understanding regarding the differences in valuing businesses in
emerging and developed financial markets
X
To develop management and leadership competencies and behavior such as
team work and communication.
To develop critical thinking.
3
4
6
7
X
X
X
X
X
X
X
5
X
X
X
X
X
X
8 / 12
Program Outcomes
Course Outcomes
1
2
Participants will be able to translate qualitative assessment of business
into quantitative inputs in their financial models
X
X
Exhibit interpersonal and teamwork skills.
3
4
5
X
X
6
7
8
9
10
X
X
Participants will be able to value financial assets by selecting the best
qualifying model amongst different financial models, depending on the
nature of business under consideration .
X
They will be able to tweak their models when faced with the complexities
of emerging markets.
X
By the end of the course participants will be able to write and present
financial valuation/ recommendation reports.
X
X
X
X
X
X
X
X
X
X
Participants will be able to assess different financial risks faced and how to
reduce them (Hedging).
X
X
Participants will be able to differentiate amongst different investing
philosophies and styles and develop their own investment/ trading plan.
X
X
They will be able to use statistical software (Excel) to develop valuation
model.
X
X
X
X
X
Program Learning Goals
1. Communication Skills
(I) Speech: Coherent and clear delivery, time management and logical flow of ideas.
Measure:
TERM EXAM
PROJECT
QUIZ
CLASS PART
FINAL EXAM
QUIZ
CLASS PART
FINAL EXAM
QUIZ
CLASS PART
FINAL EXAM
CLASS PART
FINAL EXAM
(II) Presentation: Effective use of presentation tools and IT equipment.
Measure:
TERM EXAM
PROJECT
(III) Written: Logical and clear presentation of ideas.
Measure:
TERM EXAM
PROJECT
(IV) Technical Writing Skills: Use of correct English Grammar and language.
Measure:
TERM EXAM
PROJECT
QUIZ
(V) Listening Skills: Ability to accurately receive and interpret messages in the communication process.
Measure:
TERM EXAM
PROJECT
QUIZ
CLASS PART
FINAL EXAM
2. Knowledge of Business Discipline
(I) Demonstrate an in depth knowledge and understanding of multiple business disciplines for e.g. Accounting, Finance, HR
etc.
Measure:
TERM EXAM
PROJECT
QUIZ
CLASS PART
FINAL EXAM
(II) Understand and analyze the internal and external dynamics influencing business functions and ethical decision making.
Measure:
TERM EXAM
PROJECT
QUIZ
CLASS PART
FINAL EXAM
(III) Apply integrated knowledge of all business disciplines for problem solving and decision making.
Measure:
TERM EXAM
PROJECT
QUIZ
CLASS PART
FINAL EXAM
CLASS PART
FINAL EXAM
(IV) Demonstrate knowledge of basic leadership skills and competencies.
Measure:
TERM EXAM
PROJECT
QUIZ
3. Team Skills
9 / 12
(I) Understand and demonstrate ability to manage team building processes.
Measure:
TERM EXAM
PROJECT
QUIZ
CLASS PART
FINAL EXAM
QUIZ
CLASS PART
FINAL EXAM
(II) Sustains a committed working relationship with colleagues.
Measure:
TERM EXAM
PROJECT
(III) Question & challenge team members assumptions constructively and productively with mutual respect.
Measure:
TERM EXAM
PROJECT
QUIZ
CLASS PART
FINAL EXAM
(IV) Contributes workable ideas and research analysis to each other to enhance the quality of the final deliverable.
Measure:
TERM EXAM
PROJECT
QUIZ
CLASS PART
FINAL EXAM
4. Critical Thinking
(I) Demonstrate work ethics, intellectual curiosity, show alertness for anomalies and seek clarity and formulate questions.
Measure:
TERM EXAM
PROJECT
QUIZ
CLASS PART
FINAL EXAM
QUIZ
CLASS PART
FINAL EXAM
QUIZ
CLASS PART
FINAL EXAM
CLASS PART
FINAL EXAM
(II) Interpret data, to appraise evidence and evaluate arguments.
Measure:
TERM EXAM
PROJECT
(III) Reconstruct ones thought process through reflection.
Measure:
TERM EXAM
PROJECT
(IV) Alertness to complex and systemic situations to generate alternate solutions.
Measure:
TERM EXAM
PROJECT
QUIZ
5. Glocal Mindset
(I) Ability of students to understand the influence of local business and political environment, culture, practices and
economics.
Measure:
TERM EXAM
PROJECT
QUIZ
CLASS PART
FINAL EXAM
(II) Ability to recognize global values, norms, attitude, practices, trends, legal environment and behavior for business decision
processes.
Measure:
TERM EXAM
PROJECT
QUIZ
CLASS PART
FINAL EXAM
(III) Recognizing host location's values, practices, constraints and cultural norms when making business decisions.
Measure:
TERM EXAM
PROJECT
QUIZ
CLASS PART
FINAL EXAM
10 / 12
Class Participation
Adequate to Good (1-2)
Shows comprehension of the case and the reading
Speaks coherent manner and understandable way
Presents ideas and argument clearly
Provides key elements of the case, basic facts/knowledge of the subject during the discussion Speaks understandable
English
Very Good (2-3)
Shows advance level of case knowledge
Shows basic competence in synthesis and critical thinking
Logically organized ideas Clear thoughts about the subject and analysis of different alternatives
confidently defending argument and position in the class discussion
Excellent (3-4)
Well organized and structured ideas without errors
Shows clear understanding about case concepts (both core Issues and conceptual issues)
Strong evidence of critical thinking and intellect Ability to perform critical analyses, identification of dilemmas, and
tensions points,
Able to identify paradoxes and presents arguments around it
Ability to present arguments from thinking two opposite ideas at the same time during the class discussion
Shows ability to Synthesis – connections of various ideas
Shows ability to develop an idea, build content and substance and able to develop real application and action plan
Exceptional in all respect (4-5)
Original thinking and creative ideas and sound action planning abilities
Generated new dimension in class discussions and new thought process in the class
High level of synthesis of ideas and application of ideas
Extension of the case / class contents / objectives Demonstrates very high level of intellectual rigor in the class
The editable contents of this course outline are copyright and intellectual property of "Dr. Ahmad Junaid". Do not
copy without permission of "Dr. Ahmad Junaid".
Comments and/or Suggestions
Comments and suggestions are welcome and can be emailed at [email protected].
Technology Requirements
Basic knowledge of Microsoft Word, Excel and PowerPoint.
Academic Conduct
At IBA academic honesty is mandatory. Absolutely no plagiarism/ cheating in any examination, quiz, assignment, report,
and/or presentation by any student is tolerated. Each case is decided on its own merit in accordance with notified plagiarism
policies.All classrooms are cell phone free zones. Permission to attend to emergencies is to be obtained from the respective
faculty. Sports / music playing and /or other activities on campus during class timings, especially near class rooms are not
allowed.
Attendance Policy
A distinguishing feature of the IBA is its adherence to the academic calendar.
11 / 12
A detailed program is provided on the first day of every semester. Students are required to attend lectures, laboratory
sessions, seminars and fieldwork as may be specified for a course each semester.
Attendance is recorded at the beginning of each session. Late comers are marked absent even if they are late by a minute.
No excuses are accepted. If a student accumulates more than the permissible number of absences, he/she is not permitted to
sit for the final examination.
Full-time students are allowed 6 absences in a 1 hour course, 4 in a 75 or 90-minute course and 3 during a summer course.
Part-time/evening students are allowed 7 absences in a regular semester (75-minute) course and 5 in a summer semester
course.
In general, IBA stipulates a minimum of 90% attendance for full-time students and 75% for part-time students. Students are
not allowed to remain absent on the first and last day of the semester.
Serious action is taken against those who violate this rule.
Plagiarism Policy
IBA considers plagiarism as taking and using the thoughts, writings, and inventions ofanother person as one's own (Concise
Oxford Dictionary). Plagiarism manifests itself in various forms. These include but are not limited to the following:
1. Verbatim copying, near-verbatim copying, or purposely paraphrasing portions of another author's paper or unpublished
report without citing the exact reference.
2. Copying elements of another author's paper, such as equations or illustrations that are not common knowledge or copying
or purposely paraphrasing sentences without citing the source.
3. Verbatim copying portions of another author's paper or from reports by citing but notclearly differentiating what text has
been copied (e.g. not applying quotation markscorrectly) and /or not citing the source correctly.
4. The unacknowledged use of computer programs, mathematical / computer models /algorithms, computer software in all
forms, macros, spreadsheets, web pages, databases, mathematical deviations and calculations, designs models / displays of
any sort, diagrams, graphs, tables, drawings, works of art of any sort, fine art pieces or artifacts, digital images, computeraided design drawings, GIS files, photographs, maps, music / composition of any sort, posters, presentations and tracing.
5. Self-plagiarism, that is, the verbatim or near-verbatim re-use of significant portions of one's own copyrighted work without
citing the original source. IBA aims to help all stakeholders recognize and avoid plagiarism. The punishment for the offence
ranges from a warning to expulsion from IBA for a period of three years. For further details please consult IBA's handbook on
plagiarism.
Withdrawl Policy
Full-time students are allowed to withdraw from two courses in a semester if such withdrawal helps the student in improving
his/her performance in the remaining courses.
The withdrawal must be sought on prescribed forms within one week of the second term examination result.
Withdrawal from a course is not treated as failure. However, once a student has accumulated more than the permissible
absences in any course, he/she is not allowed to withdraw from that course and is awarded an F. Part-time students are
allowed to withdraw from some or all of the courses for which they have registered in a semester.
Permission to withdraw from a course must be made on the prescribed form available from the Evening Program office within
one week of the second term examination result or within one week after the announcement of midterm examination results in
the summer semester
12 / 12
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MBA Course Outline
Course:
FIN-507 (BUSINESS FINANCE II)
Class Code:
507
Class NBR:
40443
Instructor:
Dr. Ahmad Junaid
Class Details
Class Timing and Room
02:30:00 PM To 04:30:00 PM
Session Day(s)
TUES,THURS
Credit Hours
3 Credit hours
Consultation Time
Instructor Email
[email protected]
Instructor Contact No.
111422422 2693
1 / 12
Course Description
This course builds on the first introductory course in business finance. Generally it is about financial markets and specifically
it’s about valuing, trading and managing financial assets. Keeping in consideration the dynamics of financial environment
(Markets) in which businesses operate, we take the viewpoint of a user of financial markets. The course is divided into five
parts: the first part introduces the student to the structure and dynamics of financial markets; how securities are traded in
practice, a brief introduction to the microstructure of financial markets in the context of financial crises of 2007 and how
business (corporate) finance fits into the picture. The second part of this course focuses on valuation in practice; more
specifically valuing the inputs such as, the discount rates, risk free rates, country risk premiums, market risk premiums,
growth etc. for any financial model. We link the theory to practice and consider estimation issues particular to the emerging
financial markets. The third part deals with financing and dividend decision a firm faces. In the fourth part different investment
philosophies and strategies will be discussed in the light of portfolio theory. The final part of this course exposes the students
to hedging using financial derivatives such as options, swaps, futures.
The editable contents of this course outline are copyright and intellectual property of "Dr. Ahmad Junaid". Do not
copy without permission of "Dr. Ahmad Junaid".
Teachers Introduction
Dr. Ahmad Junaid holds a PhD in Finance (Joint doctoral program Essec-IAE Aix) from France. Before joining IBA he taught
at two of the top business schools in europe.
The editable contents of this course outline are copyright and intellectual property of "Dr. Ahmad Junaid". Do not
copy without permission of "Dr. Ahmad Junaid".
Teaching & Learning Methodology
Students will be involved fully in classroom discussions by using real world cases. Upon the completion of every module
cases will be used to bring to life abstract concepts, requiring each participant to make decisions and provide solutions. This
will facilitate students with their problem solving, analytical and decision making skills. Keeping in view the importance of
written reports, students will be required to submit their valuation reports in the form of groups (comprising of4-5 participants)
respectively. Detail guidelines on term report will be provided. Good EXCEL skills will come in handy to students in this
module as we will be using worksheets to make business decisions, create charts and perform financial computations.
Students will be exposed to unannounced quizzes on regular basis along with the announced ones. This will require from
them advance reading/study, higher concentration level and superior interaction during classroom lectures. Individual and
Group Assignments will be frequently circulated amongst participants which will be marked on completeness and timely
submission. Apart from the routine quizzes and assignments, self-study problems will also be provided to students.
The editable contents of this course outline are copyright and intellectual property of "Dr. Ahmad Junaid". Do not
copy without permission of "Dr. Ahmad Junaid".
2 / 12
Text Book & pre Course Reading Material
Cases and readings will be provided befor each session
Text Books:
1. Bodie, Kane and Marcus , Investments (hereafter mentoined as BKM)
2. Damodaran on Valuation: Security Analysis for Investment and corporate Finance (here after mentioned as DOV)
The editable contents of this course outline are copyright and intellectual property of "Dr. Ahmad Junaid". Do not
copy without permission of "Dr. Ahmad Junaid".
Prerequisite Skills & Knowledge
Basic understanding of financial assets and markets.
Business Statistics
Basic understanding of Financial statements
Basics of Risk and Return
Concept of Time Value of Money
Basic Equity Valuation models such as Dividend discount Model, Discounted Cashflow Model.
Concepts such as leverage, Capital structure, Proforma statements.
Course Learning Objectives
To give the students capacity to understand theory of finance and relate it to practice.
To relate Business finance in the bigger picture of financial markets
To understand the financial aspect of corporate decision making
To develop understanding regarding the differences in valuing businesses in emerging and developed financial markets
To develop management and leadership competencies and behavior such as team work and communication.
To develop critical thinking.
The editable contents of this course outline are copyright and intellectual property of "Dr. Ahmad Junaid". Do not
copy without permission of "Dr. Ahmad Junaid".
3 / 12
Course Learning Outcomes
Participants will be able to translate qualitative assessment of business into quantitative inputs in their financial models
Exhibit interpersonal and teamwork skills.
Participants will be able to value financial assets by selecting the best qualifying model amongst different financial models,
depending on the nature of business under consideration .
They will be able to tweak their models when faced with the complexities of emerging markets.
By the end of the course participants will be able to write and present financial valuation/ recommendation reports.
Participants will be able to assess different financial risks faced and how to reduce them (Hedging).
Participants will be able to differentiate amongst different investing philosophies and styles and develop their own investment/
trading plan.
They will be able to use statistical software (Excel) to develop valuation model.
The editable contents of this course outline are copyright and intellectual property of "Dr. Ahmad Junaid". Do not
copy without permission of "Dr. Ahmad Junaid".
Course Plan
Session
No.
Chapter/Reading/Case
Session Topics
Assessment/Questions
1,2
Chapter 1-5 BKM
PART 1
Introduction to the course.
Financial Markets,
Background. How Securities
are traded, Market
Microstructure
Will be provided
3,4
Chapter 1 DOV
Introduction to Valuation
Models (DCF, FCFE,FCFF)
Will be provided
Chapter 2 DOV, Chapter 9 BKM.
PART 2
Estimating Discount rates
Will be provided
5,6,7,8,
9,10,11
Case: Marriott Corp.: The Cost of Capital
Readings: HBR note Using APV a better: too for
Valuation
Readings: HBR note The Effects of Debt Equity
Policy on Shareholder Return Requirements and
Beta.
Cost of Equity
CAPM
Estima
ting
Risk
Free
Rate
Estima
ting
Equity
Risk Pr
emium
s
Estim
ating
Beta
APM
Multi Factor Models
Proxy
Cost of Debt
Estimating
Synthetic
Ratings
4 / 12
Discounted
cost of debt
Cost of Capital
Some issues
in estimating
cost of capital
of a firm
WACC VS
APV
12,13,1
4,15,16,
17
Chapter3-4 DOV
Case: Flash Memory, Inc.
Estimating Cash Flows
Will be provided
Free Cash flows to
equity and Firm
Moving from reported
to actual Earnings
Updating
Earnings
Correcting
Accounting
earnings
Dealing with
exceptional
Charges
Accounting
Malfeasance
Dealing with
Negative
Earnings
Estimating Growth
Historical Growth
Analyst Forecasts
Fundamental Growth
Expected
Long term
growth in EPS
Expected
Long term
growth in Net
income
Expected
Growth in
EBIT and
Fundamentals:
Stable ROC
and
Reinvestment
Rate
Operating
Income
Growth when
ROC is
Changing
Estimating
Growth when
Operating
Income is
Negative or
Margins are
changing
5 / 12
18,19
20
21,22,2
3
24,25
Chapter 5-6 DOV
Reading: HBP Article What's It Worth?: A
General Manager's Guide to Valuation
Case: Valuation of AirThread Connections
Closure in Valuation
Notes will be provided
PART 3
Business and Financial Risk,
Estimating the Optimal
Capital Structure under the
MM Theory
Will be provided
Notes will be provided
Case: Blaine Kitchenware, Inc.: Capital Structure
Case: Bed Bath & Beyond: The Capital Structure
Decision
Cost of Equity and Firm’s
value with and without
leverage; Trade-off Theory,
Signaling Theory
Will be provided
Notes will be provided
Case: Daktronics (E): Dividend Policy
Will be provided
Estimating Terminal
Value
Liquidation
Value
Multiple
Approach
Stable Growth
Model
Growth Patterns
Estimating Inputs for
stable growth
Dividend Policy
Will be provided
Dividend
Theories
Dividend
payout policies
Factors
affecting the
dividend policy
Stock Dividends and
Repurchases
26,27
Notes will be provided
PART 4
Investment Philosophies
Will be provided
Asset Allocation
Passive Asset
Allocation
Marko
witz
portfoli
o
Active Asset
Allocation
Market
Timing
Approa
ches
Security Selection
Value
Investing
Growth
Investing
Momentum
Investing
Reversal
Investing
6 / 12
Performance Measurement
28
Ch 20,21,22 BKM
PART 5
Will be provided
Real Options
Futures
Forwards
Swaps
Options
Strategies and Payoffs
The editable contents of this course outline are copyright and intellectual property of "Dr. Ahmad Junaid". Do not
copy without permission of "Dr. Ahmad Junaid".
7 / 12
Marks Distribution
Marks Head
Sequence No.
Marks
Total Marks
Course Learning
Outcomes
TERM EXAM
2
25
25
3,4
PROJECT
3
20
20
1,2,3,4,5,6,7,8
QUIZ
4
15
15
1,3,4,5,6,8
CLASS PART
5
15
15
1,2,6,7
FINAL EXAM
6
25
25
1,2,3,5,8
Total Marks
100
Program Objectives
Course Objectives
1
2
To give the students capacity to understand theory of finance and relate it to
practice.
X
X
To relate Business finance in the bigger picture of financial markets
X
To understand the financial aspect of corporate decision making
X
To develop understanding regarding the differences in valuing businesses in
emerging and developed financial markets
X
To develop management and leadership competencies and behavior such as
team work and communication.
To develop critical thinking.
3
4
6
7
X
X
X
X
X
X
X
5
X
X
X
X
X
X
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Program Outcomes
Course Outcomes
1
2
Participants will be able to translate qualitative assessment of business
into quantitative inputs in their financial models
X
X
Exhibit interpersonal and teamwork skills.
3
4
5
X
X
6
7
8
9
10
X
X
Participants will be able to value financial assets by selecting the best
qualifying model amongst different financial models, depending on the
nature of business under consideration .
X
They will be able to tweak their models when faced with the complexities
of emerging markets.
X
By the end of the course participants will be able to write and present
financial valuation/ recommendation reports.
X
X
X
X
X
X
X
X
X
X
Participants will be able to assess different financial risks faced and how to
reduce them (Hedging).
X
X
Participants will be able to differentiate amongst different investing
philosophies and styles and develop their own investment/ trading plan.
X
X
They will be able to use statistical software (Excel) to develop valuation
model.
X
X
X
X
X
Program Learning Goals
1. Communication Skills
(I) Speech: Coherent and clear delivery, time management and logical flow of ideas.
Measure:
TERM EXAM
PROJECT
QUIZ
CLASS PART
FINAL EXAM
QUIZ
CLASS PART
FINAL EXAM
QUIZ
CLASS PART
FINAL EXAM
CLASS PART
FINAL EXAM
(II) Presentation: Effective use of presentation tools and IT equipment.
Measure:
TERM EXAM
PROJECT
(III) Written: Logical and clear presentation of ideas.
Measure:
TERM EXAM
PROJECT
(IV) Technical Writing Skills: Use of correct English Grammar and language.
Measure:
TERM EXAM
PROJECT
QUIZ
(V) Listening Skills: Ability to accurately receive and interpret messages in the communication process.
Measure:
TERM EXAM
PROJECT
QUIZ
CLASS PART
FINAL EXAM
2. Knowledge of Business Discipline
(I) Demonstrate an in depth knowledge and understanding of multiple business disciplines for e.g. Accounting, Finance, HR
etc.
Measure:
TERM EXAM
PROJECT
QUIZ
CLASS PART
FINAL EXAM
(II) Understand and analyze the internal and external dynamics influencing business functions and ethical decision making.
Measure:
TERM EXAM
PROJECT
QUIZ
CLASS PART
FINAL EXAM
(III) Apply integrated knowledge of all business disciplines for problem solving and decision making.
Measure:
TERM EXAM
PROJECT
QUIZ
CLASS PART
FINAL EXAM
CLASS PART
FINAL EXAM
(IV) Demonstrate knowledge of basic leadership skills and competencies.
Measure:
TERM EXAM
PROJECT
QUIZ
3. Team Skills
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(I) Understand and demonstrate ability to manage team building processes.
Measure:
TERM EXAM
PROJECT
QUIZ
CLASS PART
FINAL EXAM
QUIZ
CLASS PART
FINAL EXAM
(II) Sustains a committed working relationship with colleagues.
Measure:
TERM EXAM
PROJECT
(III) Question & challenge team members assumptions constructively and productively with mutual respect.
Measure:
TERM EXAM
PROJECT
QUIZ
CLASS PART
FINAL EXAM
(IV) Contributes workable ideas and research analysis to each other to enhance the quality of the final deliverable.
Measure:
TERM EXAM
PROJECT
QUIZ
CLASS PART
FINAL EXAM
4. Critical Thinking
(I) Demonstrate work ethics, intellectual curiosity, show alertness for anomalies and seek clarity and formulate questions.
Measure:
TERM EXAM
PROJECT
QUIZ
CLASS PART
FINAL EXAM
QUIZ
CLASS PART
FINAL EXAM
QUIZ
CLASS PART
FINAL EXAM
CLASS PART
FINAL EXAM
(II) Interpret data, to appraise evidence and evaluate arguments.
Measure:
TERM EXAM
PROJECT
(III) Reconstruct ones thought process through reflection.
Measure:
TERM EXAM
PROJECT
(IV) Alertness to complex and systemic situations to generate alternate solutions.
Measure:
TERM EXAM
PROJECT
QUIZ
5. Glocal Mindset
(I) Ability of students to understand the influence of local business and political environment, culture, practices and
economics.
Measure:
TERM EXAM
PROJECT
QUIZ
CLASS PART
FINAL EXAM
(II) Ability to recognize global values, norms, attitude, practices, trends, legal environment and behavior for business decision
processes.
Measure:
TERM EXAM
PROJECT
QUIZ
CLASS PART
FINAL EXAM
(III) Recognizing host location's values, practices, constraints and cultural norms when making business decisions.
Measure:
TERM EXAM
PROJECT
QUIZ
CLASS PART
FINAL EXAM
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Class Participation
Adequate to Good (1-2)
Shows comprehension of the case and the reading
Speaks coherent manner and understandable way
Presents ideas and argument clearly
Provides key elements of the case, basic facts/knowledge of the subject during the discussion Speaks understandable
English
Very Good (2-3)
Shows advance level of case knowledge
Shows basic competence in synthesis and critical thinking
Logically organized ideas Clear thoughts about the subject and analysis of different alternatives
confidently defending argument and position in the class discussion
Excellent (3-4)
Well organized and structured ideas without errors
Shows clear understanding about case concepts (both core Issues and conceptual issues)
Strong evidence of critical thinking and intellect Ability to perform critical analyses, identification of dilemmas, and
tensions points,
Able to identify paradoxes and presents arguments around it
Ability to present arguments from thinking two opposite ideas at the same time during the class discussion
Shows ability to Synthesis – connections of various ideas
Shows ability to develop an idea, build content and substance and able to develop real application and action plan
Exceptional in all respect (4-5)
Original thinking and creative ideas and sound action planning abilities
Generated new dimension in class discussions and new thought process in the class
High level of synthesis of ideas and application of ideas
Extension of the case / class contents / objectives Demonstrates very high level of intellectual rigor in the class
The editable contents of this course outline are copyright and intellectual property of "Dr. Ahmad Junaid". Do not
copy without permission of "Dr. Ahmad Junaid".
Comments and/or Suggestions
Comments and suggestions are welcome and can be emailed at [email protected].
Technology Requirements
Basic knowledge of Microsoft Word, Excel and PowerPoint.
Academic Conduct
At IBA academic honesty is mandatory. Absolutely no plagiarism/ cheating in any examination, quiz, assignment, report,
and/or presentation by any student is tolerated. Each case is decided on its own merit in accordance with notified plagiarism
policies.All classrooms are cell phone free zones. Permission to attend to emergencies is to be obtained from the respective
faculty. Sports / music playing and /or other activities on campus during class timings, especially near class rooms are not
allowed.
Attendance Policy
A distinguishing feature of the IBA is its adherence to the academic calendar.
11 / 12
A detailed program is provided on the first day of every semester. Students are required to attend lectures, laboratory
sessions, seminars and fieldwork as may be specified for a course each semester.
Attendance is recorded at the beginning of each session. Late comers are marked absent even if they are late by a minute.
No excuses are accepted. If a student accumulates more than the permissible number of absences, he/she is not permitted to
sit for the final examination.
Full-time students are allowed 6 absences in a 1 hour course, 4 in a 75 or 90-minute course and 3 during a summer course.
Part-time/evening students are allowed 7 absences in a regular semester (75-minute) course and 5 in a summer semester
course.
In general, IBA stipulates a minimum of 90% attendance for full-time students and 75% for part-time students. Students are
not allowed to remain absent on the first and last day of the semester.
Serious action is taken against those who violate this rule.
Plagiarism Policy
IBA considers plagiarism as taking and using the thoughts, writings, and inventions ofanother person as one's own (Concise
Oxford Dictionary). Plagiarism manifests itself in various forms. These include but are not limited to the following:
1. Verbatim copying, near-verbatim copying, or purposely paraphrasing portions of another author's paper or unpublished
report without citing the exact reference.
2. Copying elements of another author's paper, such as equations or illustrations that are not common knowledge or copying
or purposely paraphrasing sentences without citing the source.
3. Verbatim copying portions of another author's paper or from reports by citing but notclearly differentiating what text has
been copied (e.g. not applying quotation markscorrectly) and /or not citing the source correctly.
4. The unacknowledged use of computer programs, mathematical / computer models /algorithms, computer software in all
forms, macros, spreadsheets, web pages, databases, mathematical deviations and calculations, designs models / displays of
any sort, diagrams, graphs, tables, drawings, works of art of any sort, fine art pieces or artifacts, digital images, computeraided design drawings, GIS files, photographs, maps, music / composition of any sort, posters, presentations and tracing.
5. Self-plagiarism, that is, the verbatim or near-verbatim re-use of significant portions of one's own copyrighted work without
citing the original source. IBA aims to help all stakeholders recognize and avoid plagiarism. The punishment for the offence
ranges from a warning to expulsion from IBA for a period of three years. For further details please consult IBA's handbook on
plagiarism.
Withdrawl Policy
Full-time students are allowed to withdraw from two courses in a semester if such withdrawal helps the student in improving
his/her performance in the remaining courses.
The withdrawal must be sought on prescribed forms within one week of the second term examination result.
Withdrawal from a course is not treated as failure. However, once a student has accumulated more than the permissible
absences in any course, he/she is not allowed to withdraw from that course and is awarded an F. Part-time students are
allowed to withdraw from some or all of the courses for which they have registered in a semester.
Permission to withdraw from a course must be made on the prescribed form available from the Evening Program office within
one week of the second term examination result or within one week after the announcement of midterm examination results in
the summer semester
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