assignment sheet · web view(http://courses.utexas.edu/) and look at the external links and course...

44
ASSIGNMENT SHEET TUESDAY, JANUARY 17, 2012 CLASS 1– INTRODUCTION AND GOALS FOR THE SEMESTER A. CLASS LECTURE 1. Review of Topics, Assignment Sheets, and Course Outline 2. The Case Method - Rules for Classroom Discussion 3. Instruction for the Formation of Study & Project Groups B. Professor/Student Introductions C. READINGS FROM COURSE PACKET: 1. Fin 394.4 Syllabus - Course Outline and Grading Policy 2. “Course Introduction” 3. Note to the Student: How to Study and Discuss Cases 4. “The Case Method” - Jeff Sandefer 5. “Classroom Discussion” - Jeff Sandefer 6. “Note on Study Groups” - Jeff Sandefer ASSIGNMENT: 1. PURCHASE THE COURSE PACKET 2. BRING YOUR RESUME TO THE NEXT CLASS 3. BROWSE THE CLASS BLACKBOARD SITE: (HTTP://COURSES.UTEXAS.EDU/ ) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. a. Case Exhibits b. Case Solutions c. Valuation Templates d. Valuation External Links e. Project Information

Upload: hoangtruc

Post on 26-Apr-2018

226 views

Category:

Documents


4 download

TRANSCRIPT

Page 1: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTUESDAY, JANUARY 17, 2012

CLASS 1– INTRODUCTION AND GOALS FOR THE SEMESTER

A. CLASS LECTURE1. Review of Topics, Assignment Sheets, and Course Outline2. The Case Method - Rules for Classroom Discussion3. Instruction for the Formation of Study & Project Groups

B. Professor/Student Introductions

C. READINGS FROM COURSE PACKET:1. Fin 394.4 Syllabus - Course Outline and Grading Policy2. “Course Introduction”3. Note to the Student: How to Study and Discuss Cases4. “The Case Method” - Jeff Sandefer5. “Classroom Discussion” - Jeff Sandefer6. “Note on Study Groups” - Jeff Sandefer

ASSIGNMENT:

1. PURCHASE THE COURSE PACKET

2. BRING YOUR RESUME TO THE NEXT CLASS

3. BROWSE THE CLASS BLACKBOARD SITE: (HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED.

a. Case Exhibits b. Case Solutionsc. Valuation Templatesd. Valuation External Linkse. Project Information

Page 2: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTHURSDAY, JANUARY 19, 2012

CLASS 2 – WORK FOR MONEY OR MONEY WORK FOR YOU?

A. Turn in Resume

B. Form study groups (self-select 4-6 people with different education, concentration, work experience and cultural background). Send e-mail to the professor with team member’s names. Study teams members must be in same section of the class.

C. If you plan to do a consulting project, then start forming a team of four (4) members and looking for a privately held company to analyze. Members can be different than your study team and can be in the other section of the class.

D. CLASS LECTURE 1. Definition of Small Business

2. Importance of Small Business to US Economy 3. Differences in Small and Large Businesses

4. Business Archetypes

E. READINGS FROM THE COURSE PACKET:

1. THE QUESTIONS EVERY ENTREPRENEUR MUST ANSWER2. SMALL COMPANY FINANCE: WHAT THE BOOKS DON'T SAY3. A SMALL BUSINESS IS NOT JUST A LITTLE BIG BUSINESS

BLACKBOARD: OVERVIEW OF SMALL BUSINESS.PPT

ASSIGNMENT: For Class Discussion Next Class

1. The MBA degree is designed for you to work as a manager for a large organization. Think about how you might use your MBA skills to start or buy a business. Hopefully it would be in an area for which you really have a passion and can make money as well. What type of skill sets (education, work experience, domain expertise, etc.) do you need to be an owner/manager?

2. What type of industry would you choose? Prepare to give an elevator pitch on your business idea for the next class.

Page 3: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTUESDAY, JANUARY 24, 2012

CLASS 3 – START, BUY, FRANCHISE OR FAMILY BUSINESS

A.CLASS LECTURE: 1. Creating Wealth vs. Managing Wealth2. Rewards and Sacrifices of Self-Employment3. Starting vs. Buying a business4. Franchises5. Family businesses

B. CLASS DISCUSSION: ELEVATOR PITCH - YOUR PERFECT BUSINESS TO OWN AND OPERATE. BE PREPARED TO GIVE A 1 MINUTE OVERVIEW OF HOW YOU WOULD USE YOUR MBA TO BECOME SELF EMPLOYED.

C. READINGS FROM THE COURSE PACKET:

1. A NOTE ON FRANCHISING2. ENTREPRENEUR: HOW TO BUY A BUSINESS3. HOW VENTURE CAPITALISTS EVALUATE POTENTIAL

VENTURE OPPORTUNITIES

D. BLACKBOARD: ENTREPRENEURSHIP.PPT

E. ASSIGNMENT:

Make sure you are on a study team as your first case discussion is next class.

Page 4: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTHURSDAY, JANUARY 26, 2012

CLASS 4 – ALL IN THE FAMILY

ASSIGNMENT:

A. CASE:1. COLETEK, INC. SB-144

B. READING:

1. TRANSFERRING POWER IN THE FAMILY BUSINESS HBR 794012. DEFINITIONS & TYPOLOGIES OF FAMILY BUSINESS

C. STUDY QUESTIONS:

1. Should Alan Cole sell ColeTek or hire new management?

2. What’s the lowest price you would accept if you were Alan?

3. If you were Paul or Brian, would you buy at that price and what terms would you build into the agreement?

4. How could this situation have been avoided? (Be specific.)

5. How would you value Brian and Paul’s new business? What is their unproven technology worth? What are ColeTek’s patents and distributor network worth?

D. BLACKBOARD: SUCCESSION PLANNING.PPT

Page 5: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTUESDAY, JANUARY 31, 2012

CLASS 5 – LEGAL FORMS OF ORGANIZATION

A. CLASS LECTURE: 1. Tax vs. Liability Issues2. Type of Investor3. Legal Forms:

a. Sole Proprietorshipb. General and Limited Partnershipc. Limited Liability Companiesd. S and C Corporationse. Section 1244 and 1202 Stock

B. READINGS FROM THE COURSE PACKET:

1. ORGANIZING THE ENTERPRISE: WHICH FORM IS BEST FOR YOU?

C. ASSIGNMENT: None

D. BLACKBOARD: LEGAL FORMS.PPT

Page 6: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTHURSDAY, FEBRUARY 2, 2012

CLASS 6 – FOUNDER CHOICES

A. CLASS LECTURE: 1. Bootstrapping2. Equity Splits3. Roles and Board of Directors4. Rich vs. King Decision5. Persistence vs. Exit

B. CASE: 1. LATHER, RINSE, REPEAT: Feedburner’s Serial Founding Team

C. STUDY QUESTIONS : 1. What mistakes did Costolo and his partners make in the three

ventures that preceded FeedBurner? Founding team decisions? Hiring Decisions? Financing Decisions?

2. Have they made the same mistakes with FeedBurner? What lessons did they learn from the previous companies?

3. What should Costolo do now: take the Google offer or the “C” round of funding from the VCs?

4. What are the trade-off between control and maximizing value?

READINGS FROM THE COURSE PACKET:

1. BOOTSTRAP FINANCE: THE ART OF START-UPS

Page 7: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTUESDAY, FEBRUARY 7, 2012

CLASS 7 – A BIG PIECE OF A SMALL PIE OR A SMALL PIECE OF A LARGE PIE?

CLASS LECTURE: FINANCING A BUYOUT1. Debt vs. Equity2. Control vs. Risk

CASE: Clarion Optical Co. HBS 9-393-116

STUDY QUESTIONS:

1. Should Cyrus Atkins sell Clarion Optical? Would you buy it if you were Stone or Randall? Why or why not?

2. What is the company worth? To Cyrus? To Stone and Randall?

3. How much ownership in the company should Randall and Stone have?

4. Who owns the intellectual property and how would you value it?

5. How should the deal be structured? Which financing alternative would you select and why?

READINGS FROM THE COURSE PACKET:

1. WHY ENTREPRENEURS DON’T SCALE2. NOTE ON THE FINANCIAL PERSPECTIVE: WHAT EVERY

ENTREPRENEUR SHOULD KNOW

Page 8: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTHURSDAY, FEBRUARY 9, 2012

CLASS 8 – MEASURING BUSINESS PERFORMANCE

CLASS LECTURE: Financial Statement Analysis1. DuPont Analysis2. Breakeven Analysis

CASE: NONE

READINGS FROM THE COURSE PACKET: 1. NOTE ON UNIT ECONOMICS2. BREAKEVEN ANALYSIS & OPERATING LEVERAGE

ASSIGNMENT: PREPARE THE MATCH THE INDUSTRY CASE AND TURN IN AT THE BEGINNING OF NEXT CLASS (INDIVIDUAL ASSIGNMENT). MATCH THE INDUSTRY WITH THE COLUMN FINANCIAL DATA AND GUESS WHICH COMPANY REPRESENTS THE INDUSTRY. GIVE A BRIEF EXPLANATION OF WHAT CHARACTERISTICS YOU WERE LOOKING FOR IN MATCHING THE INDUSTRY. ALL DATA IS FROM 2010.

BLACKBOARD:1. Financial Statement Analysis.ppt

Page 9: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTUESDAY, FEBRUARY 14, 2012

CLASS 9 – FINANCIAL STRATEGIES

CLASS LECTURE: FINANCIAL STRATEGIES 1. DUPONT Analysis2. Benchmarking

CASE: Match the Industry Case

This is an individual effort to be turned in at the beginning of this class. Fill out the table matching the industry with the column of financial data. Try to guess the name of the company representing the industry. Give a brief explanation of why you matched each industry with the financial characteristics and ratios shown in the case exhibit. Deliverable should be no longer than 2 pages.

STUDY QUESTIONS:

Every industry and company will have some unique financial characteristics. Use your knowledge of the industry to match up the financial characteristics with the ten columns of common sized financial statements and ratios shown in the exhibits. Group the industries that would have R&D expense. Group other industries that would be inventory dependent. Group other industries that might be capital intensive with lots of fixed assets and debt levels. Other industries might have high margins and rates of return. Some industries might have goodwill as a result of industry consolidation. Once you have them in buckets, try to pick out unique industry features that might reveal themselves in the financial data.

READINGS FROM THE COURSE PACKET: 1. ASSESSING THE FIRM’S FUTURE FINANCIAL HEALTH2. MEASURING BUSINESS PERFORMANCE

BLACKBOARD:1. Financial Statement Analysis.ppt2. Breakeven Analysis.ppt

Page 10: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTHURSDAY, FEBRUARY 16, 2012

CLASS 10 – GROWTH CAN KILL

A. LECTURE: WORKING CAPITAL MANAGEMENT1. Cash Conversion Cycle2. Percent of Sales Method of Asset Forecasting

B. CASE: 1. Butler Lumber Company

B. STUDY QUESTIONS: Attached to case

C. READINGS FROM THE COURSE PACKET: 1. CASH MANAGEMENT PRACTICES IN SMALL COMPANIES2. NOTE ON MANAGING THE GROWING VENTURE3. FIVE STAGES OF SMALL BUSINESS GROWTH

D. ASSIGNMENT: HANDOUT OF THE TAKE HOME EXAM DUE IN ONE WEEK (INDIVIDUAL EFFORT, OPEN BOOK AND NOTES )

E. BLACKBOARD:1. Working Capital Management.ppt2. Asset Forecasting.ppt

Page 11: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTUESDAY, FEBRUARY 21, 2012

CLASS 11 – WHAT’S IT WORTH? .

CLASS LECTURE: BUSINESS VALUATION REVIEW1. Precedent Transactions2. Guideline Public Companies3. DCF Models4. LBO Models

CASE: NONE.

READINGS FROM THE COURSE PACKET: 1. NOTE ON VALUING PRIVATE BUSINESSES2. CORPORATE VALUATION AND MARKET MULTIPLES

BlackBoard:

1. Business Valuation.ppt

Page 12: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTHURSDAY, FEBRUARY 23, 2012

CLASS 12 – INTRINSIC VALUE – DCF MODELS

TURN IN: TAKE HOME EXAM

CLASS LECTURE: BUSINESS VALUATION REVIEW1. Estimating Cash Flows and Terminal Value2. Choosing the discount rate

a. CAPM, BUM, Total Beta3. Discounts for Lack of Control, Marketability

CASE: NONE.

READINGS FROM THE COURSE PACKET: 1. NOTE ON CASH FLOW VALUATION METHODS: COMPARISON OF

WACC, FTE, CCF AND APV APPROACHES2. NOTE ON VALUING CONTROL AND LIQUIDITY IN FAMILY AND

CLOSELY HELD FIRMS3. QUANTITATIVE SUPPORT FOR DISCOUNTS FOR LACK OF

MARKETABILITY

BlackBoard:

1. Business Valuation.ppt

ASSIGNMENT: MIDTERM CASE WILL BE DISTRIBUTED THIS CLASS. DUE NEXT THURSDAY, MARCH 1ST. One week from today, each student will submit a written case analysis at the beginning of class. Your work on the midterm case should be an individual effort. Your analysis should be word processed and double spaced with at least a 12-point font. Your analysis and spreadsheet work should not exceed 10 pages. Do not put your name on the front of your analysis as I grade it blindly. Put your name on the back of the last page and staple. Discussing the case with other students in this or other classes is a violation of the honor code. Going out on the web to find out what happened to the company is also a violation of the honor code. You should stay within the case facts and just list your assumptions.

Page 13: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTUESDAY, FEBRUARY 28, 2012

CLASS 13 – D-I-V-O-R-C-E – What’s Your Bid?

LECTURE: 1. BUY-SELL TRIGGERED TRANSACTIONS2. NORMALIZING THE FINANCIAL DATA

CASE: I. THE CARLTON POLISH COMPANY

STUDY QUESTIONS:

1. What, if anything, should Carlton bid?2. What other factors other than price should Carlton consider?3. What do you think of the opportunity and the company’s future?4. Are you comfortable with the financing plan? Why or why not?

READING FROM THE COURSE PACKET:

1. THE COMPANY SALE PROCESS

Page 14: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTHURSDAY, MARCH 1, 2012

CLASS 14 – SHOW ME THE MONEY! SOURCES OF CAPITAL

TURN IN: TURN IN YOUR 10 PAGE WRITTEN ANALYSIS AND RETURN THE CASE AT THE BEGINNING OF CLASS. YOUR NAME AND CLASS TIME SHOULD BE ON THE BACK OF THE LAST PAGE OF YOUR ANALYSIS.

CLASS LECTURE: Financing the TransactionSources of Capital/Private Equity1. Debt Sources2. Equity Sources3. Government Backed Programs

CASE: None

READINGS: 1. NOTE ON ANGEL INVESTING2. NOTE ON PRIVATE EQUITY DEAL STRUCTURES

BLACKBOARD:1. Sources of Capital.ppt 2. Terms Sheets.ppt3. History of Private Equity.ppt4. PRIVATE EQUITY GLOSSARY.PDF

THERE WILL BE NO CLASS DURING GLOBAL PLUS AND SPRING BREAK (MARCH 6 – MARCH 15). Project teams should work on their consulting projects and other students should catch up on their readings in the course packet.

Page 15: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTUESDAY, MARCH 20, 2012

CLASS 15 – CAPITAL STRUCTURE THEORY

CLASS LECTURE: FINANCING THE COMPANY1. Capital Structure Theory

CASE: NONE

READINGS FROM THE COURSE PACKET:

1. NOTE ON THE THEORY OF OPTIMUM CAPITAL STRUCTURE2. A MANAGERIAL PRIMER ON THE U.S. BANKRUPTCY CODE3. INDIFFERENCE POINT ANALYSIS

BLACKBOARD: 1. CAPITAL STRUCTURE.PPT

ASSIGNMENT: LOOK AT THE FOLLOWING WEBSITES THAT WILL HELP YOU WITH YOUR PROJECT:

1. http://www.capitalIQ.com – use your user name and password to look at the database for public companies and transactions

2. http://pages.stern.nyu.edu/~adamodar/ - Look at the valuation datasets and excel models

3. http://www.exinfm.com/free_spreadsheets.html 4. http://www.lib.utexas.edu/indexes/index.php 5. http://www.reuters.com/finance/stocks

Send me your consulting project company’s SIC or NASIC and I will send you excel files on comparable transactions.

Page 16: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTHURSDAY, MARCH 22, 2012

CLASS 16 – GREED VS FEAR

CLASS LECTURE: MAKING THE HARD CHOICE1. When is the right time to exit?2. Exit now or take capital and grow?

CASE: TICKLE

STUDY QUESTIONS:1. If you were Currier, which option would you choose? Why?

a. Option 1- Big Round of VC and prepare for an IPO?b. Option 2- Sell Tickle (Emode) to Monster.comc. Option 3- Do neither and focus on operations- Pursue

social networking with existing cash and internally generated funds.

2. Rationalize the $92 million offer from Monster.com based on 4x trailing revenues. How comfortable would you be with terms including Monster.com stock and an earnout?

3. What are the pros and cons of taking the $62 million pre-money ($82 million post-money) valuation from the VCs?

4. Which options do you think August Capital and the other shareholders would prefer? Why?

READINGS FROM THE COURSE PACKET:

1. NOTE ON EMPLOYEE STOCK OWNERSHIP PLANS AND PHANTOM STOCK PLANS

2. NOTE ON VALUATION OF VENTURE CAPITAL DEALS

Page 17: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTUESDAY, MARCH 27, 2012

CLASS 17 – JUST A MATTER OF TAXES

LECTURE: LEVERAGE BUYOUTS1. Majority Recapitalizations

CASE: Brazos Partners: the CoMark LBO 9-202-090

STUDY QUESTIONS:

1. Do you agree with the $40 million purchase price?

2. What is the purpose of the earnout? If you were the seller, would you accept a subordinated note from the buyers? Why or why not?

3. If you were an intermediary, how would you negotiate the issue of whether the transaction should be an asset sale or stock sale?

4. What value does Brazos bring to the sellers?

READINGS IN THE COURSE PACKET:

1. Technical Note on LBO Valuation (A)2. Technical Note on LBO Valuation (B)

ASSIGNMENT: Try doing a reverse induction method as shown in the readings.

Page 18: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTHURSDAY, MARCH 29, 2012

CLASS 18 – IS THIS A “BUBBLE”?

LECTURE: CROSS BORDER VALUATIONS1. Political Risks, Currency Risks, Repatriation Risks

CASE: Mandic BBS – An Entrepreneurial Harvesting Decision

STUDY QUESTIONS:

1. What are the valuation challenges in international, cross-border valuations?

2. Which partner is the best to accomplishing Mandic BBS's long-term goals?

3. How much is Mandic BBS worth? How do you balance the risk vs. the growth opportunities?

4. Is taking the highest bid the best alternative for all of the stakeholders? How much influence will GP exert in this decision?

READINGS FROM THE COURSE PACKET:

1. VALUING CASH FLOWS IN AN INTERNATIONAL CONTEXT

Page 19: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTUESDAY, APRIL 3, 2012

CLASS 19 – DIVERGENCE OF GOALS – PE Exits

CLASS LECTURE: Private Equity Exits1. M&A vs. IPO

CASE: ELLER MEDIA S-SB-101

STUDY QUESTIONS:

1. Should Eller Media launch an IPO or sell to Clear Channel?

2. Why has the company been so successful? Would you have backed Karl Eller?

3. What industry ‘rules of thumb’ for valuations might billboard companies use to value themselves?

4. Relate Eller Media’s financial strategy to the DuPont analysis decomposition of ROE.

5. How much is Eller Media worth and which option do you think each of the stakeholders will support?

READINGS FROM THE COURSE PACKET:

1. A NOTE ON EXITS2. A NOTE ON THE INITIAL PUBLIC OFFERING PROCESS

Page 20: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTHURSDAY, APRIL 5, 2012

CLASS 20– ROLLING, ROLLING, ROLLING…ROLL-UP

CLASS LECTURE: ROLL-UPS (CONSOLIDATIONS)1. Poof vs. Buy & Build Strategy

CASE: Project “Dial-Tone” HBS 9-897-003

STUDY QUESTIONS:

1. What industry characteristics are favorable for roll-ups?

2. What are the characteristics of these three companies that make a roll-up attractive?

3. What does each of the players bring to the table? Can you still do the roll-up if all three companies do not agree to be acquired? Why or why not?

4. What should Hellman do?

READING IN THE COURSE PACKET:

1. THE CONSOLIDATION OF HIGHLY FRAGMENTED SERVICE INDUSTRIES: ROLLUPS

2. ACCOUNTING FOR BUSINESS COMBINATIONS: PURCHASE METHOD

Page 21: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTUESDAY, APRIL 10, 2012

CLASS 21– CHANGING OF THE GUARD (MBO)

LECTURE: MANAGEMENT BUYOUTS1. Financing and Deal Structure

CASE: John M. Case Company

STUDY QUESITONS:

1. What price should the managers offer?

2. As the owner, would you accept this price or put the company up for auction?

3. What are the Key Success Factors (KSF’s) for the company?

4. What is the NPV of the diversification strategy and how key is it to their future plans?

5. Can the managers put together a deal structure that meets their goals?

READINGS FROM THE COURSE PACKET:

1. A NOTE ON LEVERAGED BUYOUTS

Page 22: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTHURSDAY, APRIL 12. 2012

CLASS 22 – USING YOUR STOCK AS CURRENCY – EXCHANGE RATES

LECTURE: M&A BASICS1. ACCRETION/DILUTION ANALYSIS2. EXCHANGE RATES3. FORECASTING AND SHARING SYNERGIES

CASE:Automated Intelligence Corp.

READING FROM THE COURSE PACKET:

1. A Note on Mergers and Acquisitions and Valuation2. Evaluating M&A Deals – Equity Consideration

STUDY QUESTIONS:

1. See Study Questions at the End of the Case.

2. What are AIC’s expectations of value and what do they believe they are bringing to the table? What does PCI bring to the table?

3. What would be the maximum number of shares of PCI that AIC can expect to get in exchange for their shares?

4. Would your exchange rate be accretive or dilutive to the shareholders of PCI?

BLACKBOARD: MERGERS & ACQUISITIONS.PPT

ASSIGNMENT: Your Second Take Home Exam WILL BE HANDED OUT THIS CLASS AND IS DUE IN ONE WEEK.

Page 23: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTUESDAY, APRIL 17, 2012

CLASS 23 - IS THE WHOLE EQUAL TO THE SUM OF ITS PARTS?

LECTURE: BREAKUP VALUE1. Sum of the Parts Valuation

CASE: Interco

STUDY QUESTIONS:

1. What is the highest price per share that you would pay for Interco?

2. Which valuation method did you use and why?

3. Why has Interco been successful? If you were to restructure, how would you propose to do it?

4. Do you trust Wasserstein Perella? Do you find any problems with their presentation and analysis?

READINGS FROM THE COURSE PACKET:

1. NOTE ON SUM-OF-THE-PARTS VALUATION

Page 24: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTHURSDAY, APRIL 19, 2012

CLASS 24 – PLAYING HARDBALL

TURN IN: Second Take Home Exam Due at Beginning of Class

LECTURE: ETHICS IN NEGOTIATIONS & FINANCE1. Discussion of the Difference in Moral, Ethical and Legal

CASE: Devon Industries, Inc. (A) & (B)

STUDY QUESTIONS:

This case is about ethics and negotiations and should provoke a lot of class discussion. There are not any numbers to analyze.

1. What is the difference between what is moral, ethical, and legal?

2. Does payment or the amount of money involved influence your decision?

3. Would you use the information on the political contributions in your negotiations for the sale of the business?

READINGS FROM THE COURSE PACKET:

1. ETHICS IN FINANCE 2. BRINKMANSHIP IN BUSINESS

ASSIGNMENT: Fill out your answers to the Devon “B” case.

Page 25: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTUESDAY, APRIL 24, 2012

CLASS 25– RIDING THE WAVE

CASES:1. Star Cablevision (A) HBS N9-293-036

2. Star Cablevision (B) HBS N9-293-037 (Bring the B case with you to class but do not read it before class. We will discuss the A case and you will read the B case in class).

READING FROM THE COURSE PACKET:

1. Capital Market Myopia HBS 9-288-005

STUDY QUESTIONS:

1. What should Don Jones do?

2. How much of the company, if any, should he harvest?

3. How should he proceed?

4. What is Star Cablevision worth? How do you know if you are in an asset bubble? If you are playing for the long haul, does it matter?

ASSIGNMENT: Project teams should schedule a meeting with Professor Nolen to present their consulting project.

Page 26: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTHURSDAY, APRIL 26, 2012

CLASS 26 – THE PERFECT STORM

CASE: 1. Star Cablevision (C) N9-293-038

Bring the Star Cablevision (D) case with you to class and we will read in class. Do not read the (D) case before we discuss the (C) case.

2. Star Cablevision (D) N9-293-039 – Do not read the D before we discuss the (C) case.

READINGS:

NONE

STUDY QUESTIONS:

1. What should Don Jones do?

2. How would you negotiate with the senior and junior debt holders? What are your options for restructuring?

ASSIGNMENT: Project teams should schedule a meeting with Professor Nolen to present their consulting project.

Page 27: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTUESDAY, MAY 1, 2012

CLASS 27– LESSONS LEARNED

LECTURE: NONE

CASES: 2. STAR CABLEVISION (E & F) N9-293-040 & N9-293-

041 Read and prep both cases.

STUDY QUESTIONS:

1. What are the lessons learned from Jones’ adventure.

2. Could all of this been avoided? How? Could it have been predicted? How?

3. When you die, what do you want written on your tombstone?

ASSIGNMENT: Project teams should schedule a meeting with Professor Nolen to present their consulting project.

Page 28: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTHURSDAY, MAY 3, 2012

CLASS 28– LESSONS LEARNED, COURSE SURVEY

LECTURE: COURSE REVIEW TEACHER EVALUATION

CASE: None

ASSIGNMENT: Your study team and project team peer evaluation forms will be handed out for you to complete and return.

McCombs Teacher Evaluations

Hand out Final Exam Case for take-home final. (DUE NEXT THURSDAY, MAY 10TH, AT 2:00 in the Finance Department office CBA 6.222)

Each student (except those who elected at the beginning of the semester to do the consulting project) should submit a written analysis of the final exam case. You may use spreadsheet templates developed in your study groups but your work on the midterm case should be an individual effort.

Your analysis should be word processed and double spaced with at least a 12 point font. Your analysis and spreadsheet work should not exceed 10 pages.

Do not put your name on the front of your analysis as I grade it blindly. Put your NAME on the back of the last page and staple. You are to return the case with your typed case analysis to the Finance Department before 2:00 PM on THURSDAY, MAY 1OTH. (THE FINANCE DEPARTMENT CLOSES FOR LUNCH AT NOON).

Discussing the case with other students in this or other classes is a violation of the honor code. Looking up what happened to the company on the web is also a violation of the honor code.

Study Questions will be attached to the final exam case to be handed out at the end of this class. You can e-mail me with any questions you have on the final case.

FOR TEAMS DOING THE CASE CONSULTING PROJECT:If you elected to do the project in lieu of the final exam:

YOUR TEAM’S FINAL WRITTEN ANALYSIS OF YOUR CASE IS DUE ON THURSDAY, May 10th AT 2:00 PM IN THE FINANCE DEPARTMENT OFFICE (CBA 6.222).

Page 29: ASSIGNMENT SHEET · Web view(HTTP://COURSES.UTEXAS.EDU/) AND LOOK AT THE EXTERNAL LINKS AND COURSE DOCUMENTS POSTED. Case Exhibits Case Solutions Valuation Templates Valuation External

ASSIGNMENT SHEETTHURSDAY, MAY 10, 2011

Your PROJECT team should have signed up for a one hour presentation of your project to me in my office and I will give your feedback prior to the final deliverable. Meeting times will be offered during the two week period prior to the due date of the final deliverable.

TURN IN:

1. Study Team Peer Review

2. Project Team Peer Review (IF APPLICABLE)

3. TURN IN FINAL CASE ANALYSIS & RETURN FINAL CASE TO THE FINANCE DEPARTMENT OFFICE (CBA 6.222) BY 2:00 P.M.

4. PROJECT TEAMS SHOULD TURN IN THEIR FINAL DELIVERABLE TO THE FINANCE DEPARTMENT OFFICE (CBA 6.222) BY 2:00 P.M.

GRADES WILL BE POSTED TO BLACKBOARD AND THE REGISTRAR’S OFFICE BY WEDNESDAY OF NEXT WEEK.