Course DescriptionMany lawyers routinely operate in a world that demands they understand the value and inner workings of the business organization. Whether working in a bank, a law firm, a prosecutor's office, an agency or an investment manager, lawyers must often get up to speed with scant information other than public information and financial statements. Unfortunately, very few lawyers are trained to undertake this important task, and those who do it well-very well-are highly valued. Not surprisingly, many of these lawyers end up running organizations, whether it be a law firm, a corporation or an agency.This is a high-level course for those who have previously had experience in corporate finance and accounting. It is designed give the advanced law student a deeper dive into important concepts relating to equity valuation and financial statement analysis. Familiarity with numbers is essential.The areas of focus include:1. Equity Valuation Process2. Discounted Dividend Valuation3. Free Cash Flow Valuation4. Market-Based Valuation: Price Multiples5. Residual Income Valuation6. Financial Reporting Mechanics7. Financial Reporting Standards8. Advanced Topics in Understanding the Income Statement9. Advanced Topics in Understanding the Balance Sheet10. Advanced Topics in Understanding the Cash Flow Statement11. Financial Analysis Techniques12. International Standards Convergence13. Financial Statement Analysis: Applications14. Inventories15. Long-Lived Assets16. Income Taxes17. Long-Lived Liabilities and Leases18. Employee Compensation: Postretirement and Share-Based19. Intercorporate Investments20. Multinational Operations21. Evaluating Financial Reporting QualityCourse MaterialsThe two primary texts are Equity Asset Valuation (CFA Institute Investment Series), by Stowe, Robinson, Pinto and McLeavey (Wiley, 2007), and International Financial Statement Analysis (CFA Institute Investment Series), by Robinson, van Greuning, Henry and Broihahn (Wiley, 2009). Handouts and problem sets will be distributed in class. Problem sets will be graded.Course Requirements1. Class Attendance and Preparation.Students are expected to attend all sessions. You should read appropriate materials prior to class.2. Problem Sets.Problem sets will be assigned throughout the class. Most of these will be graded. Some problems will not be graded and will be done in teams.3. Examinations.There will be a three-hour mid-term examination on the Equity Valuation section of the course and a three-hour final examination on the Financial Statement Analysis section.4. Grading.Final course grades will be determined by the following allocation:25% Class Participation25% Problem Sets25% Mid-Term Exam25% Final Exam5. The Honor Code.You are expected to follow the Duke University Honor Code. Specific issues concerning homework and the final examination will be discussed in the first class meeting.6. Schedule.Mondays for 1-1/2 hours and Wednesdays for 1-1/2 hours.7. Prerequisites.One of the following courses (or their equivalents): Corporate Finance, Financial Information or Fixed Income Markets and Quantitative Methods.
Spring 2013
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