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Course Summary

Course Summary. Week 15 – April 27, 2006. FBE 532: Case Course. Goal: Understand implications of financial theory in real situations Objectives: Students take a position on a financial policy or strategy and defend their decision using financial theory

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Course Summary

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  1. Course Summary Week 15 – April 27, 2006

  2. FBE 532: Case Course • Goal: Understand implications of financial theory in real situations • Objectives: Students take a position on a financial policy or strategy and defend their decision using financial theory • By-product: Gain exposure to a wide variety of financial issues in a broad range of market contexts (e.g. domestic and international) and many “war stories”

  3. Review Cases: Investment Banking • Eskimo Pie • Continental Carriers • Hostile Bid for Red October

  4. Review Cases: Venture Capital • The John Case Co. • Trendsetters

  5. Review Cases: Risk Management • For risk management, we had more lecture coverage of technical background: • Measuring risk exposure • Techniques for risk management • Derivative securities: futures and forward contracts, options, and swaps • Liabilities Management at Union Carbide

  6. Review Cases: Financial Strategy • PPL • Clarkson Lumber • Avon Products

  7. Review Cases: • International Capital Markets • Huaneng Power International • Corporate Governance • Circon (A) • Value-Based Management • Vyaderm

  8. Summary • Value and valuation is the key in finance • Cash flows, discount rates, and present values are the critical tools and assumptions for each are the main points of debate • Accounting concepts (like income) and numbers are important inputs but finance is forward-looking and requires assumptions • Finance theory is essential in framing a convincing argument, either as benchmarks for analysis or in assessing real-world departures from assumptions underlying finance theories

  9. Advice from Professor • Common sense precedes careful analysis and analysis must be measured against plausibility and reasonableness • It is important to enjoy what you are doing, more important than anything, do not adopt other people’s concept of success • Balance is essential: finance is a partial view of the world, your job is in many ways the least important part of your life

  10. Examination – May 4, 2006 • Coverage is 2/3 on material since midterm and 1/3 before midterm • Two-hour examination: final counts twice and midterm once, drop lowest of three • Review cases to identify key issues • Review weekly objectives and vocabulary • Review syllabus to focus attention on important finance theories used in cases

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