Finance Lecture Note SeriesFinancialMarkets and

Investment AnalysisCourse Syllabus

Cho, Seung Mo1

School of Economics and Finance, Yeungnam University

Fall 2015

© Copyright 2015 Cho, Seung Mo

1Assistant Professor, School of Economics and Finance, YeungnamUniversity; Room No. 224, College of Business and Economics, YeungnamUniversity, 280 Daehak-ro, Gyeongsan-si, Gyeongsangbuk-do 712-749,Republic of Korea; choseungmo@yu.ac.kr;http://financialeconomics.tistory.com

1. Course OutlineWe study how to evaluate the fair value of a stock(a valueinvestment technique) and how to calculate the defaultprobability of a corporation(a credit analysis technique).Through such activities, we can(1) see a method of value investment,(2) perform credit analysis for corporations,(3) indirectly experience what financial analysts do, and(4) have higher chances to get employed either by financial

institutions or by general corporations.※ No corporate visit and no team project will be endowed. Thelectures will only be delivered in English and will be recordedto be open to the public through the university web, theinstructor’s blog, and the KOCW web.

2. Course Objectives

(1) We can evaluate the fair value of a stock.(2) We can evalute the credit staus of a corporation.(3) We can write an analyst report(No corporate visit and no

team project!).(4) We can understand managerial or financial activities of a

corporation(No corporate visit and no team project!).(5) We can enhance our chances to get employed either by

financial institutions or by general corporations.

3. Course Style

I The course consists of lectures using slides athttp://financialeconomics.tistory.com(No corporate visitand no team project!).

I We rule out high level mathematics such as calculus andprobability relying only on some 10 mathematicalformulae. All lecture contents are explained at least twicein English. No Korean words will be used in class.

I Using a free educational SNS service named Classting, wepromote communication among the students and betweenthe students and the instructor. Outside the class, theinstructor will intervene only in case a problem cannot besolved through Classting discussion among students.

4. CourseMaterials

Lecture slides at http://financialeconomics.tistory.com

5. Prerequisites

No prior knowledge on mathematics, finance, or economics isrequired.

※장애학생의요구가있을경우장애유형에따라편의제공을한다.관련사항문의 :장애학생지원센터 810-1161∼2

6. Evaluation

Total Score(100 Points) =Midterm Exam(100 Points × 0.35)+ Final Exam(100 Points × 0.35)+ Class Participation(50 Points × 0.2)+Assignments(200 Points × 0.05)+Attendance(50 Points × 0.2).

6. Evaluation

I All the problems for the midterm and the final will besimilar to the lecture slide contents and the examples onthe lecture slides and

I students should bring an electronic calculator to the tests.I No partial score will be admitted and only solutions with a

correct answer and a correct solving procedure will beregarded correct.

I Students with the highest scores in the midterm exam willbe awarded honors diploma by Prof. Cho.

I All the answers for the midterm and the final should bewritten in English and answers written in Korean will beregarded wrong.

6. Evaluation

I For the class participation score, your solving a problem onthe black board in class will give you 5 points.

I If you cannot solve your problem, then you shouldnominate a student of the opposite sex you like to solve theproblem.

I The nominated student has the right to refuse hisnomination and if the noiminated student solves theproblem, then he/she will be titled “Mr. Investment” or“Ms. Investment” and awarded 5 class participation points.

I If there are many such students, we will title them with자축인묘진사오미신유술해 as in “Ms. Investment자”, “Ms.Investment축”, “Ms. Investment인”, and so on.

I If the nominated student cannot solve the problem, thenyou should either sing, dance, or write your name withyour hips. Here, possible songs will be limited to thepopular songs released within the latest 3 years.

6. Evaluation

I If you point out errors on the solution on the black boardor on the contents of the lecture slides, then you will obtain1 point.

I The class participation score is limited to 5 points for eachof the 75-minute class hours.

I The certificates of appointment for “Mr. Investment” or“Ms. Investment” will be awarded in the next class.

I Honors diplomas will be awarded to the most active classparticipants.

I The pictures for the ceremonies will be shared throughClassting.

6. Evaluation

I Assignments will consist of 2 problem sets, each of whichwill be scored with the full score of 100 points.

I Attendance will be scored 50 points regarding one absenceas −3 points and one lateness as −1 point.

I Attendance will be checked through the electronicattendance system and the corrections can only be madethrough the system within a week with objective evidencessuch as witnesses, documents, pictures, and so on.

6. Evaluation

I Based on the total score, grading will be made with therates of A+:50% and B+ or lower:50% but some studentsmay get F in the following cases:(1) 0 point for the midterm or the final.(2) Absence by more than 1/4 of the entire semester.(3) Dishonest acts including report plagiarism or report

purchase.(4) Ill-mannered actions harming other students or the entire

class.(5) No personal information on the answer sheet covers.(6) All Korean answers.

Here, a total score lower than the highest one endowedwith F will downgrade the corresponding grade from + to0.

6. Evaluation

I Regarding the actions against dishonest acts, we willfollow the university rules below:

[학업이수에관한규정]제11조의 2(시험부정행위자처벌)①시험에부정행위를한자는아래의구분에의하여처벌한다. 1.대리시험의경우는청탁자와응시자쌍방의당해학기시험전과목을무효로하고

무기정학에처한다.시험장외답안지작성의경우도동일하다. 2.기타부정행위는당해과목을실격하고그이후시험과목도 6학점을더하여실격처분한다.다만,해당과목이후분이 6학점미만일때에는해당과목이전으로소급하여실격처분한다.②이규정에의한처벌은교수회의를거치지않고

감독교수의증언,증거물에의하여소속대학학장이처벌하고그결과를총장에게보고한다.다만,총장은처벌량을조정할수있다.

6. Evaluation

I In the first class, a class leader will be selected based on thescissors-rock-paper game after the candidates’ shortcampaigns in English.

I The missions of the class leader will include preparationand arrangement of the class, teaching assistance, and soon. And as a reward, the class leader will be awarded 50class participation points and the appointment letter byProf. Cho.

I The ceremonial pictures will be shared through Classting.

7. Schedule

I Course SyllabusI Lesson 1. IntroductionI Lesson 2. Time Value of MoneyI Lesson 3. Valuation and Credit AnalysisI Midterm ReviewI Midterm ExamI Midterm SolutionI Lesson 4. Corporate Valuation in PracticeI Lesson 5. Agency Problem, M&A, and Capital StructureI Special Lecture. Why SMEs?I Solutions for Assignment 1I Solutions for Assignment 2I Final Exam