The format for the presentation and report is as below:

1. Industry overview

2. SWOT analysis of the company

3. Financial statement analysis (ratios, Dupont-type analysis and their trends) over the

past 3-5 years

4. Firm and equity valuation using one or more of the methods discussed in class: DDM,

DCF and Residual Income. You can use analysts' consensus forecasts for coming up

with the value. In case you have used only one valuation method, you have to justify

the choice: in case you have used more than one, suggest which is more appropriate

and justify. Also, show how you arrived at the cost of capital you have used. You may

want to use the Fama French factors on value (HML), size (SMB) as well as

momentum (MOM). The data is available at:

http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/data_library.html.

5. Sensitivity analysis: provide a range of equity values for the companies based on

variation in one or more of the valuation parameters. Discuss the results.

6. Accounting and governance flags: separately discuss accounting quality and any

concerns about the corporate governance of the company.

7. Based on the analysis above, you should have a buy/hold/sell recommendation.

However, I am also looking for how well you have understood the firm's past

performance and what is expected in the future. So try to have some compelling

arguments to support your conclusion - both when you present it to the class as well

as in your report. Comparing and contrasting the two companies is required.

Other administrative details

• Course materials will be posted on moodle. Graded exams will be available at the

PGP office for student review.

• Students are expected to come to every class. Proxy attendance will not be

tolerated under any circumstances.

• Emails must include a short description of the issue in the subject area.

• All students are expected to behave with honesty and integrity. Do not plagiarize

and cheat in either projects or exam.

Class Schedule

Clas

s Topic Description Companies Source

1 Introduction

Present value

concepts

2

Intrinsic Valuation

-1

Dividend discount

model Verizon Self

3

Intrinsic Valuation

- 2 Free cash flow model

Anheuser-Busch and

InBev Sandretto

4

Intrinsic Valuation

-3

Abnormal earnings

model Borders and B&N Self

5

Financial

Statements -1

Statements and line

items ConEd Self

6

Financial

Statements - 2 MD&A, Notes Apple

Self/

Sandretto

Quiz 1

7 Ratio Analysis - 1 Dupont breakdown Roche Self

8 Ratio Analysis - 2 Reformulated ratios

9 Parameters - 1 Cost of capital

10 Parameters - 2 Growth Krispy Kreme HBS

11

Relative Valuation -

1 Definitions

Restaurant Industry

Ratios HBS

12

Relative Valuation -

2 PE vs PB drivers Google Self

Quiz 2

13

Contingent

Valuation - 1 Option pricing models

14

Contingent

Valuation -2 Real options MW Petro HBS

15

Special situations -

1 M&A, LBO Seagate HBS

16

Special situations -

2

Negative earnings,

IPO GM; UPS

Self/

Sandretto;

HBS

17 Forecasting Simple vs Detailed

18 Quality

Accounting and

Governance Barclays Sandretto

19 Review For Final Exam

20 Presentation Project presentation

Please note that the cases sourced from “Sandretto” are still being processed for

procurement. In the event these are not available, I will provide alternative companies for discussion.

11. Investment Analysis and Portfolio Management (FI-262)

INDIAN INSTITUTE OF MANAGEMENT CALCUTTA

Investment Analysis and Portfolio Management

Term IV, 2014-2015

Course Outline, Instructor: Prof. Nivedita Sinha

Objective: This course has been designed to introduce students to the area of investment in financial assets. No

other segment of finance has been impacted more by the ‘theories’ of finance as this one. The course is a

judicious blend of theory and practice. The latter will be brought in through exposure to various institutional

practices and also through discussion of contemporary cases. The students, in this course, will be equipped with

tools for determining investment objectives, combining individual assets into portfolios, managing the portfolio,

mitigating risks through derivatives and finally, measuring the portfolio performance. Students will have an

opportunity to put into practice some of the tools and also exploring original ideas in actually managing a

dummy portfolio.

Those who are interested in fund management in asset management companies or in financial institutions will

find this course useful. Also this will come in handy for those who aim for personal financial advising in an

institution or in individual capacity.

Recommended Textbook: Investments - Bodie, Kane, and Marcus, 9th

edition McGraw Hill

Additional Material: Investment Analysis and Portfolio Management – Reilly & Brown, 9th

edition

(International Student Edition), Thompson South-Western.

Tentative lecture schedule is as follows.

Lecture # Topics

1 Introduction to Investment Marketplace

Reading: Chapters 1,2,3,4

2 Portfolio Theory

Reading: Chapter 7

3 Portfolio Theory continued

Reading: Chapter 7

4

Asset Pricing Models

Reading: Chapter 8

5 Factor Models

Reading: Chapter 8

6 Case discussion: Dimensional Fund Advisors

7 Alternative Investments

Reading: Chapter 10

8

Technical Analysis

Reading: Chapter 27, ‘Technical Analysis in the Indian Capital Market – A survey’ –

Sehgal & Gupta, Decision, vol 32, no. 1, 91-122.

9 International Diversification

Reading: Chapter 25

10 Tutorials I (On Portfolio Optimization) & Assignment I presentation

11 Bloomberg Exercises I

12 Passive Management & Theory of Active Portfolio Management

Readings: Chapter 27

13 Equity markets

Readings: Chapter 17,18,19

14 Fixed Income securities

Readings : Chapter 14,15,16

15 Derivatives in Portfolio Management

Reading: Chapter 20,21,22,23

16 Investment Management Process, Portfolio Allocation, Market timing and Sector Rotation

17 Portfolio Performance Measurement

Reading: Chapter 24

18 Portfolio Performance Measurement continued

Case/ Article on Portfolio Performance Measurement

19 Tutorials II (on excel ) & Assignment II presentation by groups

20 Bloomberg Exercises II

Articles, cases and Chapters may be added, rescheduled or substituted as and when it becomes necessary. You

are expected to be familiar with the reading material prior to attending the class. Questions will be provided to

groups as part of Bloomberg exercises.

Evaluation and distribution of weights:

Individual Activity

Quiz (1) : 20%

Final Examination : 30%

Group Activity

Bloomberg Exercises (2) : 20%

Assignments (2) : 20%

Case & Article Presentation : 10%

12. Corporate Restructuring (FI-265)

Course Name Corporate Restructuring

Term PGP II, Term IV

Name of Course Coordinator Prof. Ashok Banerjee

Name of the Instructor Prof. Ashok Banerjee

Objectives The objective of the course is to aware students about the various strategic ways to achieve

superior corporate performance. Many Indian companies have adopted “maximising long-

term shareholder value” as the central corporate objective. Enhancing long-term shareholder

value involves managing costs, driving margins, managing capital structure, and inorganic

growth through acquisitions and divestiture. The course would start with cost management

issues- making students aware that cost consciousness is vital to sustain profitability. Then it

would discuss several value creating strategies- creating shareholder value to unlocking

shareholder value. Finally, we would study the linkage between employee performance and

corporate objective- how employees can be motivated to act as owners.

Session Plan:

Session Description 1 Shareholder Vs. Stakeholder Theory

Agency theory and problem of free cash flows

Excess capacity problems

Essence of Corporate Restructuring

Strategic Control Map

Readings : a) Agency costs of Free Cash Flows, Corporate Finance and takeovers

b) Value maximizations, Stakeholder Theory & the corporate Objective

c) Petroleum after the mega mergers

d) Bank of America round table on Corporate Finance

e) U.S. Corporate Governance: Accomplishments and Failings