Course Syllabus BUS 172A (Investment Analysis), Spring 2014 (Thursday, Jan 23 – Tuesday, May 13, 2014) Section 02 : Tu, Th 1:30PM – 2:45 PM Room: BBC 220 General Information Instructor: Dr. Jang H. Cho Office: BT 854 Office Hours: TH 9:30 AM – 10:30 AM, or By appointment Phone: 408-924-3489 Fax: 408-924-3463 E-mail: [email protected] Course Materials   Textbook: Required custom edition of Bodie, Kane, and Marcus (BKM) “Essentials of Investments”, 9th edition, McGraw-Hill AND online homework platform Connect Plus. - The custom edition of the textbook WITH Connect Plus is available at the SJSU bookstore. You can either buy the printed (loose leaf) version with access code for Connect Plus or you can buy the ebook version with access code for Connect Plus. - DO NOT BUY the full version of the BKM “Essentials of Investments”, 9th edition. The version used in this course is a customized edition of the textbook: less chapters and lower cost! Course reader in the school printing center - BUS 172A, Spirng 2014 Ed. Author: Dr. Jang H Cho It is mandatory to bring this workbook to each class Course Prerequisites   BUS 170 with minimum grade of “C“, (prerequisites are strictly enforced!). It is also assumed that students are familiar with basic concepts of accounting and algebra. Furthermore, it is assumed that students are sufficiently computer-literate to generate EXCEL-spreadsheet analyses of the problems and cases addressed in the course. Also, if you do not have any knowledge of College Algebra and Principles of Statistics, then it is not recommended to take this course. Grading Exam #1 Exam #2 Monday, May 19 1215-1430 Team based Case Analysis Presentation Homework via Connect Plus Participation Total Letter Grade A+ Range [97-100%) Letter Grade A AB+ B 25% 30% and 25% Range [94-97%) [90-94) [87-90) [84-87) 15% 5% 100% Letter Grade BC+ C C- Range [80-84) [77-80) [74-77) [70-74) Letter Grade D+ D DF Range [67-70) [64-67) [60-64) [0-60) Exams (55%)    Examinations are non-cumulative. Bring your scantrons. Bring your financial calculator and make sure that your calculator works. Don’t ask how to use the calculator on the exam day. Homework (15%)  The graded homework will be administered for each chapter and graded through Connect Plus, the online homework platform from McGraw-Hill. A Financial Calculator is necessary during examinations.  The log-on period to do the homework is over the five days after the chapter is covered. Do not miss any homework. Participation / Classroom Etiquette (5%)  The following behaviors during classes will be penalized. Some of the behaviors will be pointed out; others will be just marked on a grading sheet during the class.   Coming late to the class  Text messaging Eating foods except for beverages  Sleeping during classes  Unpermitted conversations with classmates  Leaving early before the class ends Going outside of the classroom more than once before the class ends (or before a break time begins)  Working on other class materials, reading newspapers, etc.  Using laptops in the class  Case Analysis and Presentation (25%)  The objective of the case method is to use the logic of financial theory to reach sensible conclusions when faced with real world problems.  There is no absolutely right answer to a case. Theories and findings of empirical evidence are all dependent on the assumptions made for the models. Different assumptions and theories can lead to different conclusions. Although there are no absolute right answers, there are good arguments and bad arguments. The lessons of this course will help distinguish between sensible and senseless arguments. Case ID Title Product number 1 Marriott Corp.: The Cost of Capital 289047-PDF-ENG 2 Beta Management Co. 292122-PDF-ENG 3 Mercury Athletic: Valuing the Opportunity 4050-PDF-ENG  Each team (with five members) has to report and present the analysis of assigned case. Determine your team members before the second week of the course and report the list of members by the third week session.  There will be around ten teams among which only three teams will make the presentations. The presentation will be determined by the first come will first serve basis. The presenting team will be awarded 5 points more than other teams that do the same project.  Go to http://hbr.org/case-studies and purchase the cases. Each team should purchase all the cases – not just the case assigned to your team. When you make the purchases, you will need the titles of the cases and product numbers.  Show the purchased cases in the fourth week to the instructor.  The raw data in the Excel format, if any, will be posted on Canvas for each case.  The schedule for case reports and presentation is shown in the table of course schedule and subject to change.  Although the assigned team makes the scheduled presentation, all other students are expected to read each case and participate actively in class.  During the case presentation and the following Q&A session, all members of the team must evenly contribute.  To ensure that all team members evenly contribute to the case analysis, report and presentation, each member of the team should report peer evaluations on other team members of the team a the point ranging from 5 to 10. Report the peer evaluations on or before the final exam date. General Comments on Case Report and Presentation  Each team is required to submit their conclusions (and answers to suggested questions) in at most two-page executive summary.  Use the “Case cover page”, available on Canvas, and write the names of all team members who participated on the cover page.  The font size should be no smaller than Times New Roman 12. Any numbers of appendices are allowed.  Case reports should be clearly typed using the Word processor with correct spelling and grammar. Wrong spelling and blunt grammatical errors will earn penalties.  Identify the objective and the main issues of the case in the report write-up.  Supporting computations and tables must be included in an appendix. All of the assumptions and formulas used should be provided in an appendix.  Suggested case questions are available in “Introduction to cases and suggested questions” on Canvas. Those will help focus your analysis. The questions outlined therein are meant to be suggestive but not exhaustive and, therefore, neither the substance nor the organization of your report write-up should be limited because of the question set.  Although you answer to the suggested questions, the main body of your analysis should be self-explanatory and reasonably self-contained. That is, the reader should be able to replicate your results by tracing through the writeups/spreadsheets. Course Schedule The following course schedule will change. Topics Topics to be covered Assigned Readings 1 Investments: Background and Issues Chapter 1 2 Asset Classes and Financial Instruments Chapter 2 3 Securities Markets Chapter 3 4 Mutual Funds and Other Investment Companies Chapter 4 Midterm Exam (Ch. 1, 2, 3, 4) 5 Risk and Return: Past and Prologue Chapter 5 6 Efficient Diversification Chapter 6 8 WACC Case: Marriot CAPM Case: Beta management Case report due (Marriott, Beta mgmt) Case Presentations and Q&As 9 Firm and Equity Valuation Case: Mercury, Inc. 7 Lecture handouts Chapter 7 Chapter 13 Case report due (Mercury, Inc) Case Presentations and Q&As Final Exam (Lectures after midterm) Disability Notice  If you have a disability and need assistance, please contact the Disability Resource Center (DRC) at the Administration Building room 110. Upon contact, the Disability Resource Center will review your request and contact your professors or other personnel to make arrangements for appropriate modification and/or assistance.