Syllabus

Robert Elliott, Adjunct Professor

relliott@depaul.edu

OFFICE HOURS BY APPOINTMENT ONLY: appointments may be made in class or by email

Course description and objective:

The objective of this course is twofold: first, to explore, in critical terms, the principles of financial valuation, and second, to learn the basics of building a corporate finance model. The focus of the first part of the course is construction of a corporate finance model to yield pro-forma financial statements for a business and a forecast of free cash flows for that business. We will explore various applications of the corporate finance model: to value a business enterprise (and its equity capital); to prepare financing plans for the firm, and to conduct capital structure analysis. The focus of the second part will be on valuation of a business enterprise and its equity capital. We will investigate and critique the discounted cash flow (DCF) valuation model in substantial detail.

Required reading:

Brodersen, Stig and Preston Pysh: Warren Buffett Accounting Book: Reading Financial Statements for Value Investing. Pylon Publishing, 2014 (ISBN-13: 978-1939370150)

Tjia, John S., Building Financial Models, Second Edition, McGraw-Hill, 2009 (ISBN-13: 978-0-07-160889-3)

Other Requirements:

Students must have individual access to EXCEL for each class session.

Students should also review dealbook.nytimes.com on a regular basis for current news on private equity, M&A

Prerequisites:

FIN 310, 311, and a basic course in Probability and Statistics. Course can be taken concurrently with FIN 333. .

Performance evaluation:

Student performance will be evaluated on the basis of three assignments which will require students to construct financial models in Excel; oral participation in class, and spontaneous, periodic quizzes/exercises. Final grades will be weighed as follows:

Assignment 1: 25%

Assignment 2: 25%

Assignment 3 (final): 35%...