Sept. 19,1998

Dear Sir or Madam:

I taught Mr. Dai Tongzhi Corporate Finance, and I am writing in support of his application for acceptance into your graduate school.

In my class, Mr. Dai stood out for the penetrating questions he asked. The course emphasized practical skills, with a lot of in-class discussions and a heavy load of homework in the form of case studies. Mr. Dai was more often than not the first to talk, and no discussion ever ended in class without his well-reasoned input. Once I asked the students to analyze a case of investment in a new washing powder. Most of them only worked out the net present value of this investment scheme according to its return. But Mr. Dai not only worked out the NPV, but also considered the risk of it and revised the NPV taking in account the Certainty Equivalent Factor of the washing powder industry. He concluded that the company should use the new type of washing powder to replace its old one on the market. He carefully analyzed the cost of producing and marketing the new brand, considering, for example, the opportunity cost of the production of the new brand. He reasoned, among other things, that the production of the new variety would necessitate the use of the storeroom, which could otherwise be rented to others. Few other students analyzed the case as thoroughly as Mr. Dai did.

One of the things that distinguishes Mr. Dai from other students is his strength in mathematics. Whatever convoluted cases he had to deal with, he never ever made a single mistake in his computation and mathematical deduction. This put him at a distinct advantage over other students, as evidenced by his grade of 96 in my course, the highest among over 100 students who took part in the final exam.

Mr. Dai has a strong ability to put theory into practice. Because I specialize in practical economics, he has often asked me questions on stocks and shares. Making good use of his spare time, he has made small investments in some stocks to test his judgments. To give himself hands – on experience, he has taken up some part-time job with some small companies. Heeding my advice, he worked for the Special Appliances Company in Chengdu, his hometown, in the summer of 1998, and the company has found his advice very valuable.

I am pleased when he told me he would like to pursue advanced studies in economics in your university. I am sure that your distinguished program will help stand him in good stead in his future career.

Sincerely,

Jiao Shou
Associate Professor of Economics
Tsinghua University