UNIVERSITY OF MANITOBA I. H. ASPER SCHOOL OF BUSINESS

UNIVERSITY OF MANITOBA
I. H. ASPER SCHOOL OF BUSINESS
DEPARTMENT OF ACCOUNTING AND FINANCE
FIN 4400 - FINANCIAL MANAGEMENT PRACTICES
2013/14 Term 1, Section A01
Instructor:
Room:
Phone:
Office Hours:
E-mail:
Web site:
Dr. S. Abeysekera
444 Drake Centre
474-8427
Tuesday and Thursday 10:00 – 11:00 a.m. or by appointment.
[email protected]
http://umanitoba.ca/faculties/management/faculty b/sarath.abeysekera/
COURSE OBJECTIVE AND DESCRIPTION:
To deepen and consolidate the understanding of the basic concepts of finance acquired at the introductory and
intermediate level courses, and to apply this knowledge via case simulations and actual business situations.
Broader issues discussed will include ethics, corporate social responsibility, corporate governance, and
leadership. Critical thinking and teamwork will play important roles in case analyses.
COURSE MATERIALS:
Text:
Custom ordered Case Book available in the UofM Book Store.
Recommended:
Benninga, Simon, Financial Modeling, 3e, MIT Press, 2008.
Berk, J., P. DeMarzo, and D. Stangeland, Corporate Finance (Canadian Edition), Pearson Canada, 2010. [BDS]
Brealey, R., S. Myers, Principles of Corporate Finance, 7th Edition, McGraw-Hill Ryerson, 2003.
Chew, Jr. Donald H. (Ed.), The New Corporate Finance: Where Theory Meets Practice, Third Edition,
McGraw-Hill (2001).
Copeland, T., T. Koller and J. Murrin, Valuation: Measuring and Managing the Value of Companies,
John Wiley & Sons, 1990.
Dobbins, Richard and Stephen F. Witt, Practical Financial Management, Basil Blackwell, 1988.
Lusztig, P., W. S. Cleary and B. H. Schwab, Finance in a Canadian Setting, 6th Edition, John
Wiley & Son, 2001.
Ross, S. A, R. W. Westerfield, J. F. Jaffe and G. S. Roberts, Corporate Finance, Third
Canadian Edition, McGraw-Hill Ryerson, 2003.
Santomero, A. M., and D. F. Babbel, Financial Markets, Instruments, and Institutions ,
McGraw-Hill Irwin, 2001.
Note: Additional reading and reference materials will be handed out in class.
PREREQUISITE:
Financial Theory and Practice – FIN 3480.
COURSE REQUIREMENTS:
Seating and Identification:
It is suggested that the students find a permanent seat by the second day of classes. Every student is required to
display his/her nameplate on the desk during all classes.
Class Participation:
Each class will consist of discussion of a case study with the entire class participating. The students, therefore,
are expected to have thoroughly analysed a given case before arriving in class. In this regard, questions
provided in advance could be used as minimal guidance in the analytic framework adopted.
Regular attendance is expected of all students. Department procedures may be initiated and a failing
grade may be assigned to those who miss 10 or more classes.
Recommended Reading:
It is expected that everyone is familiar with literature related to the topic/s of discussion on a given day.
Students are encouraged to broaden their understanding of these topics through Recommended Readings and
other relevant sources.
Reports on Case Analyses:
Three written case analyses are due in class, on the dates indicated in the Course Schedule below. No reports
will be accepted after the given deadline.
Author of each report is solely responsible for the content and analysis presented, and therefore
no group effort is assumed in writing a given report. All suspected cases of violations of academic
integrity are subject to disciplinary action. (See page 5)
All reports must be “word-processed” and they will be retained in our Department.
Examination Liability:
Final examination will be a case analysis.
GRADING:
Report 1: Spreadsheet
Report 2: Case Analysis
Report 3: Case Analysis
Class Participation and attendance
Final Examination (Case Analysis)
Total
05%
15%
20%
25%
35%
100%
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TENTATIVE COURSE SCHEDULE: TENTATIVE COURSE SCHEDULE:
Date
Sept 5
Sept 10
Sept 12
Case / Topic
Introduction
“Sophisticated Petites”/
Comprehensive size-up of a firm
and Assessment of financing
needs
Sept 15
“Chef’s Toolkit Inc.” /
Assessment of cash needs
Report #1 Due
Sept 19
“Palmer Limited” / Lending
decision
Sept 24
Sept 29
“Warner-Lambert Canada Inc.” /
Credit management
Oct 1
“B.C. Telecom: the Cost of
Capital”
Cost of capital
Oct 3
Capital Structure Management
Oct 8
“Borders Hotel Corp.”
Oct 10
Capital Budgeting / Valuation I
Oct 15
Report #2 Due
Suggested Reading
•
•
•
Tips for case analysis,
http://tlt.its.psu.edu/suggestions/cases/studenttips/index.html
Ross et al., Corporate Finance, Third Canadian Edition,
Chapter 2, “Accounting Statements and Cash Flow”
http://sbinfocanada.about.com/od/cashflowmgt/
Cash_Flow_Management.htm
•
Ross et al., Corporate Finance, Third Canadian Edition, Chapter
27, “Short-term Finance and Planning”
•
•
www.creditguru.com/CreditT.shtml
finance.commerce.ubc.ca/~wang/comm371/Lecture%205Credit%20Policy-questions.pdf
• Ross et al., Corporate Finance, Third Canadian Edition,
Chapter 29, “Credit Management”
• Sartoris and Hill, “Generalized Cash Flow Approach to
Short- Term Financial Decisions,” Journal of Finance, May
1983.
• Gitman and Vandenberg, “Cost of Capital Used by Major
U.S. Firms”
• Bruner et al., “Best Practices in Estimating the Cost of
Capital: Survey and Synthesis”
• Miller, “The Modigliani-Miller Propositions After Thirty
Years”
• Drobetz and Fix, “What are the Determinants of the Capital
Structure? Some Evidence for Switzerland”
• Mittoo and Bancel, “The Determinants of Capital Structure
Choice: A Survey of European Firms”
•
• Chapter 15 of Damodaran “Valuation”
Damodaran, “The Dark Side of Valuation: Firms with no
Earnings, no History and no Comparables Can Amazon.com
be valued?
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Date
Oct 17
Case or Topic
“Champion Road Machinery” /
Dividend decision
Suggested Reading
•
Baker, Powell and Veit, “Revisiting Managerial Perspectives on
Dividend Policy”
• See the readings for Valuation.
• Graham and Harvey: “The theory and practice of corporate
finance: Evidence from the field”
Oct 22
Oct 24
Valuation II
“Laurentian Bakeries” /
Valuation
Oct 29
Real options
•
•
Oct 31
Nov 5
Nov 7
“CNS Company” / Real options
“Saskferco Products Inc.”
Management of foreign exchange
risk
•
•
•
•
Nov 12
Nov 14
Report #3 Due
“Advance Technologies” / Risk
management
Nov 19
“Tom.com”
Nov 21
Nov 26
Nov 28
Dec 3
“Primus Automation Division”
“Columbia Pine Pulp Company,
Inc.”
TBA
Review
Baker and Powell, “Determinants of Corporate Dividend
Policy: A Survey of NYSE Firms”
Damaodaran, “The Promise and Peril of Real Options”
Amran, M. and N. Kulatillake, Real Options: Managing
Strategic Investment in an Uncertain World, Harvard
Business School Press, 1999.
See above for Real Options.
See readings for valuation
Belk, “The Organization of Foreign Exchange Risk
Management: A Three Country Study
Duangoploy, “The Management of Foreign Exchange Risk in
U.S. Multinational Enterprises: An Empirical Investigation
•
Wallace, “Best Practices in Foreign Exchange Risk
Management”
•
•
The Value of Synergy, Aswath Damodaran
The Value of Control: Implications for Control Premia,
Minority Discounts and Voting Share Differentials
Aswath Damodaran
•
The Value of Control, Aswath Damodaran
•
A Survey of Corporate Leasing Analysis, T. K.
Mukherjee
Using Automotive Applications to Improve Instruction
in Leasing, W. M. McDaniel
•
Comprehensive case covering several topics/concepts covered
over the semester.
* TBA – To be announced
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Academic Integrity
It is critical to the reputation of the Faculty of Management and of our degrees, that everyone associated with our faculty
behave with the highest academic integrity. As the faculty that helps create business and government leaders, we have a special
obligation to ensure that our ethical standards are beyond reproach. Any dishonesty in our academic transactions violates this
trust. Page 31 of the University of Manitoba General Calendar addresses the issue of academic dishonesty under the heading
"Plagiarism and Cheating". Specifically, acts of academic dishonesty include, but are not limited to:
-
using the exact words of a published or unpublished author without quotation marks and without referencing the source of
these words
-
duplicating a table, graph or diagram, in whole or in part, without referencing the source
-
paraphrasing the conceptual framework, research design, interpretation, or any other ideas of another person, whether
written or verbal (e.g., personal communications, ideas from a verbal presentation) without referencing the source
-
copying the answers of another student in any test, examination, or take-home assignment
-
providing answers to another student in any test, examination, or take-home assignment
-
taking any unauthorised materials into an examination or term test (crib notes)
-
impersonating another student or allowing another person to impersonate oneself for the purpose of submitting academic
work or writing any test or examination
-
stealing or mutilating library materials
-
accessing tests prior to the time and date of the sitting
-
changing name or answer(s) on a test after that test has been graded and returned
-
submitting the same paper or portions thereof for more than one assignment, without discussions with the instructors
involved.
Group Projects and Group Work
Many courses in the Faculty of Management require group projects. Students should be aware that group projects are subject
to the same rules regarding academic dishonesty. Because of the unique nature of group projects, all group members should
exercise special care to insure that the group project does not violate the policy on Academic Integrity. Should a violation
occur, group members are jointly accountable unless the violation can be attributed to a specific individual(s).
Some courses, while not requiring group projects, encourage students to work together in groups (or at least do not prohibit it)
before submitting individual assignments. Students are encouraged to discuss this issue as it relates to academic integrity with
their instructor to avoid violating this policy.
In the Faculty of Management all suspected cases of academic dishonesty are passed to the Dean's office in order to ensure
consistency of treatment.
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