HD and Dean's List Full Course Notes

Description

HD and Dean's List Extensive Complete Course Notes. Covering every topic and lecture for the whole term. Topics Covered: Module 1 (Weeks 1 to 3, Strategic Value Creation): Week 1 (Introduction to Value and the Purpose of Business): Definition of value (relational, not intrinsic), the three C-suite perspectives on value creation (CFO: investment and financing decisions, management vs financial accounting; CMO: marketing as revenue generator; CIO: IS vs IT distinction), Porter's Value Chain (five primary activities and four support activities, value chain linkages), purpose of business frameworks comparison table (Shareholder Value Maximisation and Friedman 1970 including three implicit conditions and advantages vs disadvantages; Corporate Social Responsibility; Creating Shared Value and Porter and Kramer; Pieconomics and Alex Edmans Grow the Pie with three-condition test; Triple Bottom Line; Integrated Reporting and six capitals), shareholders as residual claimants, agency theory. Week 2 (Value from Market Opportunities): Value proposition definition and the Osterwalder Value Proposition Canvas (Customer Profile: jobs, pains, gains; Value Map: products, pain relievers, gain creators; fit concept), VP writing formula, worked examples (Uber, Netflix, Amazon Prime), the five-stage marketing process, four types of value created by marketing (functional, experiential, symbolic, cost minimisation), Segmentation-Targeting-Positioning (STP): segmentation bases (demographic, geographic, behavioural, psychographic), targeting criteria (market attractiveness and company fit), effective segmentation requirements (measurable, accessible, substantial, differentiable, actionable), targeting strategies (undifferentiated, differentiated, concentrated, micromarketing, individual marketing), positioning and perceptual mapping (Australian supermarket sector example: Aldi, Woolworths, Coles, Harris Farm, IGA), Ansoff Matrix (market penetration, market development, product development, diversification), design-to-value, Customer Experience, communicating and capturing value. Week 3 (Value from Technology and IS/IT Strategy): IS vs IT vs Digital distinction, three generations of IS (efficiency, effectiveness, competitiveness), IT assets vs IS capabilities vs digital strategy vs dynamic capabilities, Porter's Five Forces (rivalry, new entrants, buyers, substitutes, suppliers) with IS/IT implications across all five forces, Resource-Based View and VRIN framework, three IS/IT competencies from Treacy and Wiersema (operational excellence: Amazon; customer intimacy: Netflix; product leadership: Apple), Porter's four generic competitive strategies (cost leadership, differentiation, cost focus, differentiation focus), digital platforms and network effects, digital transformation (three levels: digitization, digitalization, transformation), e-business modes (pureplay, click and mortar, brick and mortar), IS/IT value creation case studies (Amazon Web Services, Netflix recommendation algorithm, Apple supply chain and App Store). Module 2 (Weeks 4 to 5, Financial Foundations): Week 4 (Time Value of Money): Why money has time value (opportunity cost of capital), three rules of time travel, compounding and future value (FV = PV x (1+r)^n), discounting and present value (PV = FV/(1+r)^n), APR vs EAR conversions (EAR = (1+APR/m)^m minus 1), comparing rates of different compounding frequencies (credit card vs personal loan worked example), real vs nominal interest rates and the Fisher Equation (R = (r minus infl)/(1+infl), 1975 Australia example), ordinary annuity PV and FV formulas, loan instalment formula, $500,000 mortgage worked example, outstanding loan balance at intermediate dates, annuity due PV = ordinary PV x (1+r), deferred annuity, ordinary perpetuity PV = C/r, growing perpetuity PV = C/(r minus g), growing annuity formula, extended TVM problems (retirement planning, saving for university). Week 5 (Equity Valuation Models and Bonds): Common shares (ownership, voting, limited liability, dividends), share repurchases and effect on EPS, preferred shares (hybrid features, cumulative vs non-cumulative), one-period DDM (P0 = (D1+P1)/(1+r)), total return decomposition (dividend yield plus capital gains rate), infinite horizon DDM, Gordon Growth Model (P0 = D1/(r minus g), cost of equity rearranged as Re = D1/P0 + g, Gordon Growth sensitivity analysis showing 8x price range for 1% to 9% growth), two-stage DDM (high-growth then stable, terminal value at end of Stage 1, technology company worked example: of value from terminal), payout policy decision rule (g = RR x ROI; retain if ROI greater than r; pay dividends if ROI less than r; Modigliani-Miller if equal), total payout model (MVE = Total Payout1/(r minus g)). Bonds: coupon bond pricing (semi-annual convention: P = C x annuity factor + F/(1+r)^n), price relationships table (at par, at discount, at premium, approaching maturity), bond duration and interest rate risk (Macaulay duration, modified duration, percentage price change approximation, five duration properties), yield spreads and credit ratings table (AAA through CCC with typical spreads). Brand equity: Aaker's five drivers (loyalty, awareness, perceived quality, associations, proprietary assets), price premium as proxy. Customer Lifetime Value: CLV = minus AC + sum of (retention^t x margin)/(1+r)^t, perpetuity shortcut CLV = m/(r + churn), full subscription business worked example (CLV sensitivity to churn showing 56% fall when churn rises from 8% to 12%). Module 3 (Weeks 6 to 7, Value Capture and Investment): Week 6 (Pricing and CVP Analysis): The pricing tripod (perceived value ceiling, cost floor, competitor range), True Economic Value (TEV = cost of next best + value of performance differential) with FurBall pet lodge worked example, cost behaviour types (variable, fixed, mixed, cost driver, cost object), single-product CVP formulas (CM per unit, CMR, BEP units, BEP revenue, target profit quantity, after-tax to pre-tax conversion), multi-product CVP (weighted average CM, BEP total units, pro-rating by sales mix, four-step process), margin of safety (units and percentage), degree of operating leverage (DOL = CM/Profit, interpretation), value-adding vs non-value-adding activities, advanced CVP (step costs with logistics company example, product mix shift impact showing BEP increase). Week 7 (Investment Decision Rules): Capital budgeting overview (incremental cash flows, sunk costs irrelevant, opportunity costs included, cannibalism and synergies), NPV (NPV = sum CFt/(1+r)^t, decision rules, Excel warning for CF0, NPV profile and crossover rate analysis), IRR (solve NPV=0, accept if IRR greater than required rate, three situations where IRR fails: non-standard cash flows, mutually exclusive projects, capital rationing, crossover rate worked example), payback period (limitations: ignores TVM, post-payback cash flows, arbitrary cutoff), ARR, Profitability Index (PI = NPV/Cost, capital rationing application with five-project worked example), real options (delay, expand, abandon, switch), Equivalent Annual Annuity (EAA = NPV/AF, Machine A vs B worked example), incremental cash flow mistakes checklist (sunk costs, opportunity costs, cannibalism, financing costs, accounting profit, working capital). Module 4 (Weeks 8 to 9, Risk, Return, and Cost of Capital): Week 8 (Risk, Return, and Portfolio Theory): Holding period return (HPR = (Div + P1 minus P0)/P0), multi-period total HPR, geometric vs arithmetic average returns (use cases and relationship, Jensen's inequality), sample variance and volatility, normal distribution confidence intervals (.7 rule), volatility and mean scaling with time (sqrt(time) vs linear), systematic vs idiosyncratic risk comparison table, the Systematic Risk Principle, two-asset portfolio return and variance formula (Var(Rp) = w1^2 x s1^2 + w2^2 x s2^2 + 2 x w1 x w2 x rho x s1 x s2), diversification benefit across rho values (rho=+1 no benefit, rho=0 partial, rho=-1 maximum), portfolio beta as weighted average, minimum variance portfolio weights formula and worked example, Beta formula (Beta_i = rho_iM x sigma_i/sigma_M), CAPM (E[Ri] = Rf + Beta_i x MRP), Security Market Line, beta estimation in practice (regression, Blume adjustment: x raw beta + , comparable company approach), MRP estimation approaches (historical: 6 to 7% for Australia, survey, forward-looking implied), empirical CAPM anomalies (size, value, momentum, Fama-French three-factor model). Week 9 (Cost of Capital and Firm Valuation): Cost of equity: two methods (DGM: Re = D1/P0 + g; CAPM: Re = Rf + Beta x MRP with pros and cons of each), cost of debt (YTM, after-tax cost = Rd x (1 minus Tc), interest tax shield), cost of preferred (Rp = Preferred Div/Price, no tax adjustment), WACC formula (WACC = we x Re + wp x Rp + wd x Rd x (1 minus Tc)), enterprise value components (MVE, MVP, MVND = Debt minus Cash), always use market value weights, full WACC worked example (), project cost of capital methods (company WACC, pure play approach, subjective adjustment, divisional WACC), target vs current capital structure, WACC vs APV approaches (WACC for stable structure, APV for changing structure like LBOs), DCF firm valuation (EV0 = FCFF1/(WACC minus g), multi-stage model with terminal value, full DCF worked example: $ intrinsic vs $8 market, sensitivity analysis showing TV range, DCF sanity checklist of 8 items). Extended Analysis and Integration: Agency problem and corporate governance (board oversight, executive compensation, monitoring, market for corporate control), stakeholder analysis and mapping (seven stakeholder groups with primary interests and leverage points), digital marketing ecosystem and key metrics (CTR, CPC, conversion rate, CPA, ROAS, CLV/CPA ratio), Modigliani-Miller payout irrelevance theorem.