FIN 40610 - Security Analysis

Professor Shane A. Corwin

scorwin@nd.edu

Fall Semester 2012

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Announcements:

• Final Grades: Click here to view final grades for the valuation project and final exam, as well as final semester grades.  

Course Syllabus:

• Download the syllabus (in pdf format) and instructions for the valuation project.

Lecture Notes:

• Course notes will either be provided in class or made available for download from this site.  Additional Notes and Examples will be posted below as they become avaiable.

• Lecture 1 - Introduction to Valuation
  Present Value examples
  Introduction to Bloomberg
  Warren Buffett letter to the Berkshire Hathaway shareholders (2011) (Discussion Questions)
       Legg Mason Article - Common Errors in DCF Valuation
       McKinsey Article - The Right Role for Multiples in Valuation
  Nike Notes to Financial Statements and full 10K for fiscal year 2011, ending May 31, 2012
• Lecture 2 - DCF Valuation: Estimating the Cost of Capital
       Financial Times Article - Life without a Risk-Free Rate (related video)
       Click here to download an example excel spreadsheet for calculating implied premium using the solver function.
       Click here to download an example spreadsheet related to Beta calculations. 
  Click here to download price data for Nike
• Lecture 3 - DCF Valuation: Estimating and Forecasting Cash Flows
  Additional Operating Lease and Expense Capitalization Examples
  
• Lecture 4 - DCF Valuation: Forecasting Earnings Growth and Estimating Terminal Value
• Lecture 5 - DCF Valuation: Final Issues and Examples
  Additional notes related to Pension Acccounting
  
• Lecture 6 - Relative Valuation

Homework, Suggested Problems, and Textbook Supporting Materials:

• Throughout the semester, I will provide example problems associated with the material we cover in class. Solutions to these example problems will be available below.  Aswath Damodaran also provides extensive data and information to support his textbook.  This information can be accessed at:  Investment Valuation (3rd edition) web page. 
  

Lecture Summaries and Suggested Example Problems	Answers to Suggested Problems
Lecture 1 - Introduction to Valuation	Lecture 1
Lecture 2 - Cost of Capital	Lecture 2
Lecture 3 - Cash Flows	Lecture 3
Lecture 4 - Growth and Terminal Value	Lecture 4
Lecture 5 - Final Issues and Examples	Lecture 5
Lecture 6 - Relative Valuation	Lecture 6

• Information related to the graded homework assignments is provided below:

Homework Assignments and Due Dates	Homework Solutions
Homework 1 (Nike Notes to Financial Statements and full 10K for fiscal year 2011, ending May 21, 2012)	Homework 1
Homework 2 (Nike prices for use in the homework)	Homework 2
Homework 3	Homework 3
Homework 4	Homework 4
Homework 5	Homework 5
Homework 6	Homework 6

Exams:

• Exam 1 was held on Monday, September 24th. Click here to view the solutions for Exam 1. 
• Exam 2 was held on Wednesday, October 31st. Click here to view the solutions for Exam 2.
• The Final Exam will be held on Friday, December 14th from 1:45-3:45 p.m. in DeBartolo room 155.     
• You will need a calculator and a formula sheet for all exams.
• Click here to download sample exams and quizzes from previous semesters:  Quiz 1, Quiz 2, Quiz 3, Quiz 4, Quiz 5, Midterm, and Final Exam (Taser Financials).
• Additional sample quizzes/exams:  Quiz 1 (answers), Quiz 2, Quiz 3, Quiz 4, Quiz 5, Midterm Exam (answers), Final Exam (answers).

The Valuation Project:

• The final version of the valuation model is due on Thursday, December 6th at 5:00 p.m.  Click here to download the instructions for the Valuation Project.
• Group presentations will be held on Monday, December 3rd and Wednesday, December 5th. Check back here to view the presentation schedule.  You are required to attend only the presentation during which your group is presenting.  Please note that the one-page valuation tear sheets (summary pages) are due on the day of your presentation.
• Valuation Project Assignments:
• Assignment 1 - Business and Industry Description (due Wednesday, September 5th).
• Assignment 2 - Bloomberg Information Collection and Financial Ratio Analysis (due Wednesday, September 19th).
• Assignment 3 - Cost of Capital Analysis (due Monday, October 8th).
• Assignment 4 - Cash Flow Analysis (due Monday, November 5th).
• Assignment 5 - Growth Analysis (due Tuesday, November 27th Monday, November 19th).
• Additional Resources:
• Click here to download my example valuation spreadsheet for Home Depot including both FCFF and FCFE valuations. 
• Click here to download Damodaran's example valuation spreadsheets based on FCFF and FCFE.  Numerous other spreadsheets and datasets are available on Damodaran's web site. 
• Click here to download my Black-Scholes spreadsheet.
• Click here to download an Excel Example for calculating Beta.
• Click here to download default spread data as of August 19, 2011. Click here for previous yield spread data as of August 9, 2010 and June 10, 2009.

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Other Useful Links:
duLac: A Guide to Student Life
The Notre Dame Academic Code of Honor Handbook
Professor Corwin's Page of Finance and Business Links
Books Related to Markets, Trading, and Careers in Finance
Professor Corwin's Home Page
The Finance Department Home Page
The Mendoza College of Business Home Page
The Notre Dame Home Page