每周課程進度與作業要求 Course Schedule & Requirements

 Course Outline

(1) Introduction

(2) The CFO’s views on Financial Management

Reading Materials:

1. Can You Say What Your Strategy Is? David J. Collin and Michael G. Rukstad, Harvard Business Review, April, 2008. (一句話說策略？大衛．柯里斯及麥可．拉克斯塔德，哈佛商業評論全球繁體中文版新第38期，2009年10月號)

2. The Finance Function in a Global Corporation, Mihir A. Desai, Harvard Business Review, July, 2008. (跨國運籌的財務長，米赫．德賽，哈佛商業評論全球繁體中文版新第23期，2008年7月號)

Case Study

Case: HBR Case Study: Play It Safe or Take a Stand? Nov 1, 2010, R1011X-PDF-ENG.

Assignment Questions:

1. What are the responsibilities and functions of a Chief Financial Officer?

2. If you were Scott Beckett, the vice president of Oil and Gas Products, what decision would you expect from Shirley?

3. If you were Walter Albright, VP of research and development, what decision would you expect from Shirley?

4. If you were CEO, Carl Switzer, what recommendation would you expect from Shirley?

5. Before Shirley makes a decision, what does she need to take in account?

6. Should Shirley simply moderate the debate or recommend a course of action?

(3) Working Capital Management and Business Strategy

  Reading Materials:

   1. Working Your Assets to Boost Your Growth, Miles Cook, Pratap

     Mukharji, Lorenz Kiefer, and Marco Petruzzi, Finance Basics for

     Managers, HBR Guide to Finance Basics for Managers, Harvard

     Business Press Books, Oct 9, 2012 (活化資產以促進成長，邁

     爾斯．庫克，普拉塔普．穆克哈吉，羅倫斯．基佛，馬

     可．沛楚基，哈佛商業評論全球繁體中文版，2016年04)

2. What's Your Working capital Model?A Case Study, John

  Mullins and Randy Komisar, Finance Basics for Managers, HBR

  Guide to Finance Basics for Managers, Harvard Business Press

  Books, Oct 9, 2012 (你的營運資金模式為何？個案研究：道

  瓊公司，約翰．穆林思與藍迪．高米沙，哈佛商業評論全

  球繁體中文版，2016年04月)

3. Are You the Weakest Link in Your Company's Supply Chain?

  Reuben E. Slone, John T. Mentzer, J. Paul Dittmann, Harvard

  Business Review, Sep 1, 2007, R0709H-PDF-ENG (誰讓供需斷

  了線？魯本．史隆，約翰．曼薩爾與保羅．狄特曼，哈佛

  商業評論全球繁體中文版，2007年09月)

Lecture

1. Predicting a firm's financial distress the Merrill Lynch CO.

  Statement of Cash Flows(‏9B12B011)

2. Dell’s Working Capital, 2003, Ruback, Harvard Business School,

  (9-201-029)

Case Study:

Supply Chain Finance at Procter & Gamble, 2017 (9-216-039) (with spreadsheet supplement)

Assignment Questions：

1. Why did P&G extend its payment terms for suppliers in April 2013?

2. What was the likely impact of the new payment terms on P&G’s financial statements and its funding needs? on Fibria’s financial statements and funding needs?

3. Why did P&G simultaneously launch the SCF program in April 2013, along with the new payment terms? How does the SCF program work and who benefits from it? Is the SCF financing rate competitive?

4. P&G claims that SCF is a win-win-win program? Is that true? Does anyone lose?

5. Should Fibria continue to use the SCF program?

6. (Optional) In general, should large buyers pay smaller suppliers with extended terms? What is the argument for having P&G pay its A/P quickly?

(4) Financial Diagnosis and Analysis

   Reading Materials:

1. Assessing a Company’s Future Financial Health, Thomas R.

  Piper, May 2012, 9-911-412.

2. Innovation Killers: How Financial Tools Destroy Your Capacity

  to Do New Things, Clayton M. Christensen, Stephen P.

  Kaufman, and Willy C.Shih, Harvard Business Review, January

  2008

3. Which Levers Boost ROI? Margeaux Cvar and John A. Quelch,

  Harvard Business Review, Jun 1, 2007, F0706B-PDF-ENG (妙手

  拉抬投資報酬率, 哈佛商業評論繁體中文版，10期, 2007

  年 6月號)

Case Study

AT&T Versus Verizon: A Financial Comparison, 2017, 9-917-514

Assignment Questions:

1. What trends do you see in the overall wireless and wireline industry? Will wireline communication networks eventually disappear? Describe the overall strategy for each firm and what you expect to see going forward.

2. For each company, consider the consolidated financial results and provide a margin analysis. What themes are being played out for either or both companies? Please describe them.

3. Please describe any adjustments you would make when considering the data.

4. Create a reorganized balance sheet for each company showing net operating assets. Next, create a separate table showing net working capital and the net working capital ratios for each of the respective line items.

5. Has either, or both, company(s) been reinvesting in its business? Please provide your evidence.

6. Provide a set of modified DuPont ratios for each firm. What is each firm’s return from financial leverage and operating leverage? Assume the pre-tax cost of short-term borrowing is 2% and the marginal corporate tax rate is 40%.

7. Calculate the unlevered free cash flow for each firm.

8. For each firm, what is the trend in postpaid wireless subscribers and total wireless subscribers? What is the trend in average revenue per user (ARPU), as well as EBIT and EBITDA margins?

9. What are the driving factors behind each firm’s wireless and wireline performance? Explain the likely relationships.

     (5) Case Study Report (Midterm I)

 Assigned Case: Manish Enterprises: A Growth Versus  

 Profitability Dilemma, Aug 22, 2014, W14389-PDF-ENG. (with spreadsheet supplement)

 (Students will work in groups on the case study report. Each

 group has to turn in the PPT. and study report before the class)

             (6) Capital Budgeting and Cost of Capital

        Reading Materials:

1.  Do you know Your Cost of Capital, Michael T. Jacobs and Anil Shivdas, Harvard Business Review, July-August 2012 (投資前的計算題，麥可．賈可布斯及亞尼爾．許達沙尼，哈佛商業評論全球繁體中文版新第78期，2013年2月號)

2. Finance Reading: Cost of Capital, Timothy A. Luehrman, Harvard Business School Publishing - Higher Ed, May 4, 2017, 8293-PDF-ENG

    Case Study:

Globalizing the cost of capital and capital budgeting at AES, Mihir Desai, 2006 (9-204-109) (with spreadsheet supplement)

    Assignment Questions:

1. How would you evaluate the capital budgeting method used historically by AES? What's good and bad about it?

2. If Venerus implements the suggested methodology, what would be the range of discount rates that AES would use around the world?

 3. Does this make sense as a way to do capital budgeting?

4. What is the value of the Pakistan project using the cost of

  capital derived from the new methodology? If this project

  was located in the U.S., what would its value be?

5. How does the adjusted cost of capital for the Pakistan project reflect the probabilities of real events? What does the discount rate adjustment imply about expectations for the project because it is located in Pakistan and not the U.S.?

             (7) Corporate IPO and fund raising Strategy

                         Reading Materials:

1. Google's CEO on the Enduring Lessons of a Quirky IPO，Eric Schmidt，Harvard Business Review, May 1, 2010, R1005J-PDF-ENG. (Google另類上市啟示錄, 哈佛商業評論繁體中文版，45期, 2010 年 5月號。)

 2.1. Give My Regrets to Wall Street, Harvard Business Review

 Case, Feb 1, 2004, R0402X-PDF-ENG (哈佛個案研究：悔教公

 司拚上市？馬克．富里戈，喬爾．利特曼，哈佛商業評論

 全球繁體中文版，2014年7月)

 2.2. Give My Regrets to Wall Street (Commentary for HBR Case

 Study), Harvard Business Review Case Discussion, Feb 1, 2004,

 R0402Z-PDF-ENG (哈佛個案研究評論篇：悔教公司拚上市？

 徐贊，艾德．納斯包姆，約翰．穆希林，湯姆．科普蘭，

 哈佛商業評論全球繁體中文版，2014年7月)

 Case Study:

 Alibaba’s IPO Dilemma: Hong Kong or New York? W14598-

 PDF-ENG (with spreadsheet supplement)

Assignment Questions:

1. Describe dual-class share structure. Is Alibaba’s “partnership structure” different from dual-class share structure? Does “voting premium” mean that “minority” shareholders are losing money?

2. Why do NYSE and NASDAQ allow dual-class share structure while HKEx does not? If you were Charles Li, what would you do?

3. What are the pros and cons of listing in Hong Kong versus New York? If you were Jack Ma, where would you list? Under what conditions?

4. What is your valuation of Alibaba?

5. When is the optimal time for Alibaba to go public?

     (8) Capital Structure

        Reading Materials:

                         1. Use Customer Cash to Finance Your Start-Up, John Mullins,

           Harvard Business Review, Jul 1, 2013, F1307A-PDF-ENG (五

            大模式取得金援（Use Customer Cash to Finance Your

            Start-Up），約翰．穆林思 John Mullins，哈佛商業評論全

            球繁體中文版新第期，2013年7月號)

 2. MANAGEMENT OF FINANCIAL POLICY DECISIONS: CAPITAL

           STRUCTURE POLICY, April, 2016, Darden Business Publishing,

   UV7078.

        Case Study:

        1. FINANCIAL STRATEGY AT BAA PLC (A), 2010, IMD438

        2. FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS

          OF PHILIP II (B)

       Assignment Questions

       BAA Case:

        1. How would you characterize BAA’s business? How profitable

        is it? Has the company invested wisely over the last few years?

        Is the financial policy aligned with the overall company

        strategy?

2. What is BAA’s optimal capital structure? In particular, given the characteristics of the firm’s assets, which financial structure would you recommend to Margaret Ewing?

        3. Is BAA a good takeover target?

       Ferrovial Case:

1. How does the M&A market act as a discipline device for   CFOs? What is the value created by financial policy?

2. How do credit markets work? Why is syndication an  attractive mechanism to raise debt?

3. What is project-based lending? How is project finance  different from traditional corporate finance?

        4. What is the role of financial acquirers (Goldman Sachs)

        compared with corporate acquirers (Ferrovial)?

    (9) Dividend Policy

       Reading Materials:

1. Is a share buyback right for your company, Harvard Business Review, 2001.

        2. Controlling Stockholders and Disciplinary Role of Corporate

       Payout Policy: a Study of the Times Mirror Company, 2000,

DeAngelo and DeAngelo, Journal of Financial Economics 56,  153-207.

Case Study:

Financial Policy at Apple, 2013 (9-214-085) (with spreadsheet supplement)

Assignment Questions:

1. From the beginning of 2000 until its peak in 2012, Apple’s stock price rose from $27.97 to $702.10, an increase of over 25 times. What specific attributes of their operational performance account for this stock performance?

2. Apple’s stock price decreased by 37% from its peak in September 2012 until the end of March 2013, from $702.10 to $442.66. Again, what specific attributes of their operational performance account for this stock performance?

3. Why does Apple hold so much cash? How much “excess” cash do they have? How much cash would they have after five years if they distributed all of their “excess” cash to shareholders in 2012? Use Exhibit 10 to forecast Apple’s financial status over the next five years.

4. If Apple chose instead to commit to an annual dividend from 2012-2017, how much do you think they could afford to distribute each year?

5. Quantitatively compare the results of a share repurchase, dividend, and iPref issuance. Assume that Apple will use all excess cash for share repurchases, dividends and, in the case of iPref, will issue five per share. For the iPref analysis, assume a constant P/E ratio of 10.0x as Einhorn did. How does this assumption impact the analysis?

6. What should Cook and Oppenheimer do?

   (10) Case Study Report (Midterm II)

       Assigned Case: Airbus A3XX: Developing the World's Largest

        Commercial Jet (A), (9-201-028) (with spreadsheet supplement)

       (Students will work in groups on the case study report. Each

       group has to turn in the PPT. and study report before the class.)

   (11) Corporate Governance

                        Reading Materials:

1. Whatever Happened to the Take-Charge Manager? Nitin Nohria, James D. Berkley, Harvard Business Review, Jan 1, 1994, 94109-PDF-ENG (負責任的經理人到底出了什麼事，詹姆斯．柏克利，林汀．諾瑞亞(哈佛商業評論精選/領導第八章)，Jan. 1, 2007)

2. Governance and Performance Changes after Accusations of Corporate Fraud 2006, Financial Analysis Journal.

3. Corporate Governance 2.0, Guhan Subramanian, Harvard Business Review, March 2015

Case Study:

Milking Money out of Parmalet, Francesca Toninato, 2005 (0-305-041, IES119)

Assignment Questions:

        1. How were the foundations of Parmalat laid? What were Mr.

          Tanzi’s major business intuitions?

        2. What were the roots of Parmalat’s financial problems? What

          was the “usual mechanism” used at the base of the scandal?

        3. Keeping in mind that the Parmalat investigation is still under

          way, and no sentence has yet been handed down, can you

          briefly summarize the major players involved and their

          respective responsibilities?

        4. Do you think Parmalat is a purely Italian scandal? Was the

          Collecchio Group aligned with Italian corporate governance

          best practices?

   (12) Mergers and Acquisitions

       Reading Materials:

   1. Lessons from Master Acquirers: A CEO Roundtable on Making

   Mergers Succeed, Dennis Carey, Harvard Business Review, May 1,

   2000, R00312-PDF-ENG. (向收購大師汲取經驗: 探討成功合併

   課題的執行長圓桌會議, 2002, 哈佛商業評論．)

       2. Stock or Cash? The Trade-Offs for Buyers and Sellers in Mergers and

      Acquisitions, Alfred Rappaport, Mark L. Sirower, Harvard Business Review,

      Nov 1, 1999, 99611-PDF-ENG. (股票或現金？併購過程買賣雙方的

       交換，2002，哈佛商業評論．)

       3. Are You Paying Too Much for That Acquisition? Robert G.

       Eccles, Kersten L. Lanes, Thomas C. Wilson, Harvard Business

       Review, Jul 1, 1999, 99402-PDF-ENG. (你是收購交易的冤大頭

       嗎？2002, 哈佛商業評論)

       Case Study:

        Buffett’s Bid for Media General’s Newspaper (9-213-142) (with

         spreadsheet supplement)

Assignment Questions:

1. Why does Warren Buffett want to buy MEG’s newspaper division?

2. Is MEG’s newspaper division worth $142 million?

  a. Start by valuing the newspaper division, assuming the cash

    flow forecast in Exhibit 10 is reasonable. For the purposes of 

    this analysis, assume a market risk premium of 6%, a debt

    beta of 0.20, a closing date for the transaction of January 1,

    2012 (you can ignore half-year discounting), and a reduction

    of $30 million in your valuation of the entire newspaper

    division to reflect the fact that the The Tampa Tribune is

    excluded from the purchase agreement.

  b. Are the cash flow forecasts reasonable? What are the

    critical assumptions you need to make for the newspaper

    division (again, less The Tampa Tribune) to be worth $142

    million? To be worth more than $142 million?

3. How much value, if any, does Buffett derive from the credit agreement?

4. As a current lender to MEG, would you refinance the $225 million term loan that is coming due? Would you refinance the term loan as a new lender?

5. What should MEG’s CEO Marshall Morton do? What are his options?

   (13) Corporate Restructuring and Ethics

       Reading Materials:

       1. Good directors and bad behavior, Prentice, 2012, BH496-PDF-

       ENG.

       2. The bottom-line benefits of ethics code commitment, Gilley,

       Robertson, and Mazur, 2010, BH366-PDF-ENG.

       Case Study:

       Marriott Corporation (A), 9-394-085            

       Assignment Questions:

       1. Why is Marriott's chief financial officer proposing Project

       Chariot?

       2. Is the proposed restructuring consistent with management's

       responsibilities?

       3. The case describes two conceptions of managers' fiduciary

       duty (p. 9). Which do you favor: the shareholder conception or

       the corporate conception? Does your stance make a difference

       in this case?

       4. Should Mr. Marriott recommend the proposed restructuring

       to the board

   (14) Bankruptcy and Restructuring

       Reading Materials

       1. What a Toys "R" Us Comeback Could Look Like, Kevin M Dulle,

         B Joseph Pine II, Harvard Business Review Digital Article, Nov

         30, 2018, H04OEP-PDF-ENG (重返市場的玩具反斗城如何重

         生，凱文．杜勒 Kevin M. Dulle , 約瑟夫．派恩二世 B.

         Joseph Pine II，哈佛商業評論全球繁體中文版, 2019/01/16)

       Case Study:

       Restructuring JAL (9-214-055)

        Assignment Questions:

       1. How did JAL get into this situation? What are Seto’s options?

       2. How does bankruptcy work? What tools/rights would be

         available to Seto? What is the economic rationale behind these

         tools?

       3. What are the costs of being in bankruptcy? Do any of these

         costs start before bankruptcy? How does this affect a firm’s

         capital structure decision outside of distress? 

       4. What should Seto do?

       5. Discuss bankruptcy as an institution designed to address the

         frictions highlighted in class.

   (15) Corporate Value, Investor Relations and Communications, and

       Transformation Driver

       Reading Materials

       1. How to Win Investors Over? Baruch Lev, Harvard Business

         Review, Nov 1, 2011, R1111B-PDF-ENG (經理人與投資人雙贏,

         巴魯克．列夫 Baruch Lev，哈佛商業評論全球繁體中文版,

         2011年11月號)

       2. Managing Investors, Samuel J. Palmisano, Justin Fox, Harvard

         Business Review, Jun 1, 2014, R1406E-PDF-ENG (管理投資人，

        山姆．帕米沙諾 Sam Palmisano , 採訪者：賈斯汀．福斯

        Justin Fox，商業評論全球繁體中文版，2014年6月號)

       Case Study:

       Generating Higher Value at IBM (A) (9-215-058) (with

         spreadsheet supplement)

        Assignment Questions:

       1. Why did IBM create and publicly announce the 2010 EPS

         Roadmap in May 2007?

       2. How would you assess IBM’s financial performance both

         before (from 2004-2006) and after (from 2007-2009)

         announcing the 2010 Roadmap? Analyze case Exhibits 1, 2, and

         3 for levels, trends, changes in financial performance. Hint:

         what has happened to IBM’s ROE (return on equity) and cash

         flow over the 10 years? Why and how did they change?

       3. Was the 2010 Roadmap successful?

       4. How does the 2015 Roadmap differ from the 2010 Roadmap?

         Has the 2015 Roadmap been successful so far (up to May

         2014)?

       5. What should CEO Rometty and CFO Schroeter do as of May

         2014: affirm the 2015 EPS Roadmap (and the $20 target),

         adjust it, or abandon it?

       6. What should Sofia Johnson recommend to her clients—buy,

         hold, or sell IBM shares?

   (16) Financial Decision and Value Creation

       Reading Materials:

       1. Framework for Financial Decision, March-April 171,

       Harvard Business Review, No. 71211

       Case Study:

       Northampton Group Inc. : How to Increase Shareholder Value,

       2011, Ivey, W1104

       Assignment Questions:

       1. How would you describe Northampton’s current financial

       situation? What role is being played by the current economic

       conditions in which Northampton finds itself? How does

       Northampton’s position compares to that of its competitors?

       2. Why does Patel believe that Northampton is currently

       undervalued?

       3. What are the costs and benefits of the alternatives that

       Patel is considering to improve the value being provided to

       Northampton’s shareholders?

       4. What alternative should Patel recommend to the board of

       directors? What arguments should be made to support this

       choice?

   (17) The Optimal Financial Decision and Strategies

       Reading Materials

       1. Structuring Corporate Financial Policy: Diagnosis of

       Problems and Evaluation of Strategies, Robert F. Bruner, Sean

       Carr, Katherine L. Updike, University of Virginia Darden School

       Foundation, Apr 5, 1994, UV0102-PDF-ENG

       Case Study:

       Molycorp: Financing of Production of Rare Earth Minerals (A)

        (9-214-054) (with spreadsheet supplement)

        Assignment Questions:

       1. What are the key elements of Molycorp’s business plan? What

         are the key risks facing Molycorp as it implements its plan?

       2. What is a reasonable (market value) leverage ratio for

         Molycorp? In your opinion, is Molycorp currently at its optimal

         leverage ratio?

       3. What is Molycorp’s total external financing need between July

         2012 and December 2012? What is its financing need in 2013?

         Develop a comprehensive funding plan to meet Molycorp’s

         financing needs through the end of 2013. Specifically, of the

         three alternatives listed on page 5 of the case, which one or

         ones would you issue, in what amounts, and when? Explain

         your reasoning.

       4. Is Molycorp’s equity fairly priced at $11.49 per share? What  

         terminal value assumptions would be consistent with an

         $11.49 share price, assuming the cash flow forecasts in Exhibit

         9 are reasonable? Assume a market risk premium of 6.0%, a

         corporate tax rate of 35%, and a debt beta of 0.30.

       5. Would you invest in Molycorp in August 2012? Why or why

         not? What are the most important risks that you would take

         into account in making this decision?

    (18) Case Study Report (Final)

 Assigned Case:

 FANUC Corporation: Reassessing the Firm's Governance and

 Financial Policies May 3, 2017, (216042-PDF-ENG) (with

 spreadsheet supplement)

 (Students will work in groups on the case study report. Each

  group has to turn in the PPT. and study report before the

  class)