Note: Problem and other assignments will be made during class sessions.L&M and IV Textbooks,Week 1Valuation Basics IV, Chs 1 & 2Week 2Week 3Week 4Week 6Week 7Week 8Week 9Week 10Mergers & Acquisitions IV Ch 25Week 11Week 12Week 13Week 14Week 15Week 16UNIVERSITY OF COLORADO SEMINAR IN INVESTMENT BANKING Leeds School of Business FNCE 4820, Section 801; Fall 2003 Prof. Ronald W. Melicher Wednesdays 3:30-6:15 PM Office: Room 462 Classroom: BUS 124 Office Hours: T & W 1:00-2:30 PM, E-Mail: [email protected] & by Appointment Phone No. 303-492-3182Course Description and Objectives:Investment bankers advise firms on the type and pricing of securities. Investment bankers also market to the public a firm’s stocks and bonds via an underwriting arrangement. Stock underwriting includes by initial public offerings (IPOs) and seasoned issues. Investment bankers also help firms design hybrid securities such as convertibles, bonds with warrants, and other exotic securities designed to meet a firm’s specific project financing need or to appeal to particular investor desires or niches. Investment bankers advise and assist firms to: acquire other firms, sell their own firms, spin-off or sell specific operating unity, go private through leverage buyouts (LBOs) and management buyouts (MBOs). This course helps prepare a student for a career in investment banking. Required Materials:A. Textbooks: J. Chris Leach and Ronald W. Melicher, Entrepreneurial Finance, First Edition (Mason, Ohio: South-Western Publishing, 2003) [referred to as L&M]. We use selected chapter from this text to develop skill sets relating to financial statements forecasting, determining additional financing needs, estimating the value of a firm using discounted cash flow (DCF) methods, and developing a basic understanding of the relevant laws that govern the issuance of securities.Aswath Damodaran, Investment Valuation, Second Edition, University Edition (New York: John Wiley &Sons, 2002) [referred to as IV]. This text serves as an important reference text for determining the cost of financial capital, further understanding of the use of discounted cash flow (DCF) approaches to value firms, determining firm values using relative valuation methods (e.g., revenue and earnings multiples), and valuing non-equity securities. B. Case Packet: A collection of investment banking-related Harvard Business School and Darden Business School cases is available at the CU Campus Bookstore. Reference Textbooks:Richard A. Brealey and Steward C. Myers, Principles of Corporate Finance, Seventh Edition (McGraw- Hill/Irwin, 2003).Stephen Ross, Randolph Westerfield, and Jeffrey Jaffe, Corporate Finance, Sixth Edition, Irwin McGraw-Hill/Irwin, 2002).Eugene F. Brigham and Michael C. Ehrhardt, Financial Management, Tenth Edition (Dryden Press, 2002).General Readings:Miriam Naficy, The Fast Track (Broadway Books, 1997).Michael Lewis, Liar’s Poker (Penguin Books, 1990).John Rolfe and Peter Troob, Monkey Business (Warner Books, 2001).Peter L. Bernstein, Capital Ideas (The Free Press, 1992).Peter L. Bernstein, Against the Gods (John Wiley & Sons, 1998).Procedures and Expectations:Students are expected to abide by the University of Colorado Student Honor Code, attend all class sessions, be prepared to discuss each day’s assigned topic or subject matter, and behave in a professional manner. Honor code information is available at http://www.colorado.edu/academics/honorcode. Thehonor code pledge is: “On my honor, as a University of Colorado at Boulder student, I have neither given nor received unauthorized assistance on this work.” Students with disabilities who qualify for academic accommodations must provide a letter from Disability Services (which determines accommodations based on documented disabilities) and discuss specific needs with the professor, preferably during the first two weeks of class. See: http://www.colorado.edu./sac/disabilityservices . The classroom behavior policy is available at and University policies regarding academic and behavior issues can be reviewed at: http://www.colorado.edu/policies/index. Classroom attendance and participation is expected and required. Students are expected to display their “name card” at each classroom session. Class participation in case discussions (both voluntary and involuntary through cold calls) is important to the class take-away. Assignments:Students will self-select into teams or groups of four. Each group will be responsible for submitting two major (bolded) and two minor (bolded or non-bolded) case write-ups and presenting one of the two majorsand leading the discussion in one of the minor cases. A signup sheet will be provided. Additionally, each group will develop and prepare analysis and presentations materials to support a “pitch” to a corporate client preparing for an initial public offering. The corporate client will be designated during the latter part of the course. These presentations will be rehearsed and professional with multimedia content. The pertinent background information for the client pitch will be provided during the course. This part of the course is a competition and therefore groups are cautioned regarding too much sharing of approach and presentation strategy. Students must also be involved in the preparation and delivery of the Investment Banking Forum.While you may freely reference outside sources including other groups of students, each write-up must be a group’s own product and no portion can be copied or extracted from existing or other groups’ write-ups.Major written case analyses (excluding the final IPO project) should be in an executive summary format and consist of a written analysis of approximately four (4) pages plus up to four (4) pages of figures, tables, and/or spreadsheet output. The Oral presentation of a case should be 20-25 minutes. Minor case write-ups should be in the form of a one page executive summary and one page of exhibits or analysis. Grading Procedures:The final grade will be based on:Case analyses, Write-ups, and In-class Presentations (40%)Written and Oral Presentation of the Client-Pitch IPO Project (40%)Individual Class Participation [including Forum preparation] (20%)COURSE OUTLINE: Note: Problem and other assignments will be made during class sessions.L&M and IV Textbooks, Date Topics Case Packet Cases, & Misc. Week 1Aug. 27 Course Objectives &