Course Update 11/27/2012

The course is winding down but we do have a busy few days.  So don't forget we will cover Sampa Video on Thursday and I'm going to also save some time on Thursday to go over valuation using multiples (which we didn't get to on Tuesday).  When I discuss valuation with multiples I will use the handout that I emailed earlier titled Creative Sports.  Here is the Creative Sports problem along with an Excel spreadsheet with financials and the solution:  Creative Sports Inc; Excel Spreadsheet for Creative Sports; Solution for Creative Sports.

As we discussed in class today there was a typo on slide 27 of the valuation PowerPoint slides (i.e., slides titled "Valuation of a Levered Firm" under Week 13, 11/15 below).  The numbers on slide 27 were wrong (better said not consistent).  I also changed the numbers on slides 28 and 29.  There was nothing wrong with the numbers on 28 and 29 I just wanted to make them more consistent with 27.  We haven't covered slides 28 and 29 yet but will do so on Thursday.  You can download the corrected PowerPoint slides below.

We will move quickly on Thursday so that we can wrap up valuation and the rest of the material for the course.

SO READ THE SAMPA CASE AND UNDERSTAND IT BEFORE CLASS.  I WILL NOT SPEND ANYTIME SETTING UP THE CASE.  I WILL ASSUME YOU HAVE READ IT AND ARE FAMILAR WITH THE QUESTIONS BEING ASKED SO THAT WE CAN JUMP RIGHT INTO CRUNCHING THE NUMBERS.

EXIT EXAM INFORMATION

A number of you have asked me about the exit exam so let me give you some information about the exam.  The exit exam is a standardized exam given in Finance 40153.  It consists of 50 multiple choice questions that cover all the different areas in finance that have been part of your coursework here at TCU.  Here is a study guide for the exam - Study Guide Exit Exam.  As I mentioned in class it is not an exam you can study for in the traditional sense.  My advice, and you can take it or leave it, would be to go through the Study Guide and brush up on some of the material that either feels unfamiliar or you haven't seen in a while.  How much time you put into studying for the exam is up to you but at some point my attitude for an exam like this is that you know what you know and putting in a lot of time won't be that helpful.  Again that is my advice and you should use your own judgment in how you want to approach the exit exam.

You are not allowed a formula sheet for the exit exam but you can use a financial calculator so my advice would be to bring one.

Since the Exit Exam is your final exam for the course there are exam times schedule for each class.  Here they are:

For the Tuesday 9:30am - 10:50am class the final is scheduled for Thursday, December 13th from 8:00 am - 10:30 am.  For the Tuesday 11am - 12:20pm class the final is scheduled for Tuesday, December 11th from 11:30 am - 2 pm.  Both final exams will be held in Dan Roger's Hall Room 134 (same room as our class is in).

If you are a graduating senior you must take the final before noon Wednesday of finals week.  Here are a couple of options.  I have reserved our classroom (Room 134) on Thursday December 6th from 9am - 11:30 am so that graduating seniors can take it then.  We can also start a little earlier, 8am, if you have a conflict with another exam later that day. Anybody, including graduating seniors is welcome to take it then (but not required too).  If you are a graduating senior you can also take it on Tuesday December 11th at 11:30am which is the regularly scheduled time for the 11am class.  If you are a graduating senior and neither time works you need to let me know by noon on Friday, 11/30.  We will then have to set up an alternative time if possible.  If you are not a graduating senior then you must take the exam either during the time scheduled for your class or at one of the options above.

Plans for Thursday 11/29

• We will cover the Sampa Video case.  This case is in your Harvard Case packet and is another group assignment.  For Sampa case the group assignments are as follows.  All groups will answer question 1.  For Section 015 Groups A & B will answer question 2 and groups C, D and E will do Question 3.  For question 3 do not worry about determining the end of year debt balances.  For Section 035 Groups A & B will answer question 2 and groups C and D will do Question 3.  For question 3 do not worry about determining the end of year debt balances.

• The questions to address along with a spreadsheet to help with some of the analysis are posted below under Week 15, 11/29.

Plans for Tuesday 12/4

• Exam 4.  Remember everyone must take Exam 4.  I will not drop this exam.  Similar to the other exams this will cover all the material we have gone over in class since Exam 3.  This includes all the material on capital structure (Chapter 16) and also all the concepts we covered with respect to valuation (Chapter 18).  Let me point out there was a lot of material regarding both capital structure and valuation not covered in the book that you are responsible for.  There are some problems below to help reinforce the ideas we covered when discussing capital structure (See Week 13, 11/5 below) along with the solutions.  I've also posted a valuation problem and solution below (see Week 15, 11/27) as another example of doing a valuation.

• My advice, which is identical to the previous exams, is to study the material we covered in class and not spend anytime on material that is in the book but we didn't go over in class.

• Keeping to form as with the other exams you will be allowed to bring a 4 x 6 card with any information you would like.  Also, bring a financial calculator.  I'm not going to provide any formulas.

Here is a template that you can use to keep track of your grades for the course.  It contains all the group assignments and also provides the grade curve and distribution for all the exams up until now - Course Grade Template.  I'll talk about it briefly in class.

As mentioned above I've set up a course on the HBS web site where you can download cases.  The course link is http://cb.hbsp.harvard.edu/cb/access/14608722.  I think it should be pretty straight forward getting the cases.

If you want some additional information on time value calculations and also instructions on how to use different financial calculators and information on how to use Excel to do time value problems here is a link to a useful web site http://www.tvmcalcs.com/.