Case Studies in Financial Management
Instructor: Mia Twu
Office: 1017, Business School
Required textbook: Chew, Donald, The new corporate finance: where theory meets practice, 3rd ed. (??)
This is a course where theory meets practice. It covers the major topics of corporate finance, including capital budgeting, capital structure, external financing, risk management, corporate governance, and merger and acquisition. Students are required to apply what they have leaned about financial theories on practical cases. Three students are formed as a team in studying and solving each case. Every week, one to three teams will be withdrawn randomly to present the case assigned for the week and every team has to hand in a formal written paper report. In each class, every student is required to join the discussion on every topic. In addition to the regular reports, each team is required to give two term reports of local cases. The midterm report should be a case related to capital budgeting, capital structure, or external financing. The final report should be a case related to risk management, corporate governance, merger and acquisition, or spin-offs.
Grading:
Regular reports 30%
Participation 40%
Term Reports 30%
Tentative Schedule:
9/14 Introduction
9/21 The theory and practice of corporate finance: evidence from the field, JFE, 2001, 187-243
Proposals for midterm reports
9/28 No class
10/5 The theory of stock market efficiency: accomplishments and limitations
Market Myth
The challenge of investor communication: the case of CUC International, Inc., JFE, 1995, 111-140
10/12 Finance Theory and Financial Strategy, Chew
Capabilities and capital investments, Chew
The economics of organizational architecture, Chew
Euroland Foods
10/19 The EVA financial management system, Chew
EVA round table
Coke vs Pepsi, 2001
10/26 The Modigliani-Miller Propositions after thirty years
Round table on the link between capital structure and shareholder value
Rocero Acero S.A
11/2 Williams, 2002
Massey-Ferguson
The dividends cut : Heard round the world “: The case of FPL, Chew
11/9 Raising capital: Theory and evidence, Chew
IPO pricing in dot-com Bubble, Journal of Finance 58, 2003, 723-752
Planet Copias & Imagem
11/16 Midterm paper presentation
11/21 Are banks loans different? Chew
Convertible Bonds: matching financial and real options, Chew
Arley Merchandise Corporation
11/28 Strategic risk management, Chew
Rethinking Risk Management, Chew
Proposals for final reports
12/5 Value at risk: uses and abuses, Chew
Roundtable on derivative and corporate risk management, Chew
Tiffany & company (1993)
12/12 To Purchase or to pool: does it matter, Chew
Some new evidence that spin offs create value, Chew
Spin-off and wealth transfers, JFE, 1997, 241-274
12/19 Value creation and corporate diversification: the case of sears, Roebuck & Co., JFE, 2000, 103-137
An analysis of value destruction and recovery in alliance and proposed merge of Volvo and Renault, JFE, 1999, 125-166
Chrysler corporation: Negotiations between Daimler and Chrysler
12/26 Deregulation and the adaptation of governance structure: the case of the U.S. airline industry, JFE, 1999, 79-117
Selling company shares to reluctant employees: France Telecom’s experience, JFE, 2004, 169-202
Ownership Structure: Corporate governance, and firm value: evidence from East Asian financial crisis”. Journal of Finance 58, 2003, 1225-1468.
1/4 Final report presentation