mime-version: 1.0 date: Thu, 27 Aug 2009 13:58:55 -0500 content-transfer-encoding: quoted-printable content-location: file://C:\Documents and Settings\syedk\Local Settings\Temporary Internet Files\Content.Outlook\A9DFGIFM\Fin392-TitmanButler.html x-mimeole: Produced By Microsoft MimeOLE V6.00.2900.5579 from: subject: HTMLsyllabusMBA content-type: text/html; charset="iso-8859-1" FIN 394 2-FINANCIA= L STRATEGIES-TITMAN Energy Finance (Financial Strategy)=20

Sheridan Titman titman@mail.utexas.edu 232-2787= =20
and
John Butler=20 butlerjc@mccombs.utexas.edu 232-6821=20

TA: Chishen Wei chishen.wei@phd.mccombs.utexas.edu=20

Office Hours:
Titman: After = class or=20 by appointment, CBA 6.266
Butler: MW 3:30-4:30 = pm and=20 by appointment, CBA 6.438
Wei: After class or b= y=20 appointment, CBA 5.334N=20

Description: This course is primarily focused on the initiation,= =20 evaluation, financing and hedging of major investments.=20

Pre-requisite: Before starting the class students should have a = good=20 understanding of the following material:=20

  1. Chapters 9-13 in the Grinblatt and Titman text --- although we will = be=20 spending considerable time discussing these concepts, you should underst= and=20 how to estimate cash flows and discount rates and be somewhat familiar w= ith=20 certainty equivalent cash flows and how they relate to forward prices.=20
  2. Chapters 14-17 in the Grinblatt and Titman text --- You should under= stand=20 the Modigliani and Miller theorem, why corporate taxes create a preferen= ce for=20 debt financing, and how financing affects the cost of capital.=20
  3. The valuation of forwards, futures and commodity options – You= should be=20 familiar with the binomial option pricing model.


Requirements: The class consists of lectures and case=20 discussions.  You should form groups consisting of approximately 4 st= udents=20 each for the purpose of writing up and discussing the cases.  &n= bsp;=20 Each group will be required to turn in a 3 page executive summary of their= =20 analysis along with the appropriate exhibits that provides more details ab= out=20 their work.  Each student is expected to be actively involved in the = case=20 discussions.  If for any reason you are not adequately prepared to=20 contribute to the discussion in a class, please let me know before class a= nd I=20 will not call on you.=20

Guest speakers: When we have guest speakers, the appropriate dre= ss is=20 business casual.=20

Readings: Valuation: The Art and Science of Corporate Investment= =20 Decisions, (Titman and Martin) and Case Packet.  The books and cases = will=20 be available at the University Coop.  I will post lecture notes and o= ther=20 readings on Blackboard.=20

Grades: 35% case discussion and write-ups, 50% exams, 15%=20 participation=20

Tentative Schedule: Please note, some of the dates are likely to cha= nge=20 due to scheduling conflicts with our guest lecturers.=20
Meeting Date Topic Readings
1 26-Aug Discussion of the valuation process TM Chapter 1
2 31-Aug Valuation methodologies:  Simulation and Scenario analysis TMChapter 2-5
3 02-Sep Valuation methodologies:  Simulation and Scenario analysis
4 09-Sep Case: Globalizing the Cost of Capital and Capital Budgetingat AES<= /TD>
5 14-Sep Case: Southport
6 16-Sep Valuation with Comps TM Chapter 6-7
7 21-Sep Guest: Jeff Kennedy - Deloitte
8 23-Sep Firm Valuation
9 28-Sep Intro to Real Options
10 30-Sep Real Options/spread sheets TM Chapter 10
11 05-Oct Guest: George Vaughan - CoP TM Chapter 11
12 07-Oct Real Options continued
13 12-Oct Accounting and Valuation TM Chapter 9
14 14-Oct Case: MW Petroleum
15 19-Oct Mid term
16 21-Oct Strategic Options TM Chapter 12
17 26-Oct Case: CEPA
18 28-Oct Capital Structure
19 02-Nov Calpine Corporation
20 04-Nov Alternative Energy Presentations
21 09-Nov Alternative Energy Presentations
22 11-Nov Alternative Energy Presentations
23 16-Nov Risk Management GT Chapter 21
24 18-Nov Case:Risk Management at Apache
25 23-Nov Quantifying Risk Exposure
26 25-Nov Guest Speaker
27 30-Nov Case: Financing the Mozal Project 
28 02-Dec Review