UNIVERSITY OF MANITOBA I.H. - ASPER SCHOOL OF BUSINESS Alok Dua

UNIVERSITY OF MANITOBA I.H. - ASPER SCHOOL OF BUSINESS
DEPARTMENT OF ACCOUNTING AND FINANCE
FIN 2200 - CORPORATION FINANCE
Summer Session 2014
Section A01
Professor:
Office:
E-mail:
Website:
Office Hours:
Alok Dua
376 Drake Centre
ph: 204-474-8104
[email protected]; [email protected]
home.cc.umanitoba.ca/~duaa
Mondays and Wednesdays, 6:15PM to 7:00PM, or by appointment.
PREREQUISITES & COREQUISITES:
Required Prerequisites: [ACC 1100 (or 009.110) (D)] and [MATH 1500 or MATH 1520 (C)] and
[STAT 1000 or STAT 1001 (C)] and [ECON 1010 (C) and ECON 1020 (C) or the former ECON 1200 (or
018.120) (C)].
Note: All students are required to have completed Calculus and Linear Algebra before entering the
Bachelor of Commerce program through track 1; track 2 students are to have completed these
courses immediately upon entry into the Bachelor of Commerce program. Knowledge of Calculus
and Linear Algebra is assumed and required for FIN 2200. Non-Commerce students who do not
have this background are encouraged to consult with the professor as needed when concepts from these
subjects are used in class.
COURSE OBJECTIVE:
This course introduces students to the fundamentals of finance and presents theories and tools to be used in
addressing corporate finance problems and issues.
REQUIRED MATERIALS:
1. J. Berk, P. DeMarzo, and D. Stangeland, Corporate Finance, Second Canadian Edition, Pearson
Canada, 2011
2. Hewlett Packard HP-10BII (course notes support HP-10BII) financial calculator or a higher level
HP calculator (such as HP 12C). You may use other financial calculators (for e.g. Texas Instruments
BA II Plus). Just make sure it has the IRR function capability.
RECOMMENDED READING:
It is suggested that you begin reading about current business activities. This will enable you to see the
course material applied in real business situations. Two suggested sources of current business information
are (1) The National Post (Financial Post), and (2) The Globe and Mail (Report on Business).
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1.
MARK ALLOCATION:
Midterm Exam
Final Exam
7:00PM-9:00PM, Wed, June 4
6:00PM-9:00PM, Friday, June 20, 2014; Room TBA
The final exam is cumulative
40%
60%
These represent the only marks available to the students. Make-up or extra work to improve your grade is
not possible. Final grades will depend on the total marks accumulated during the semester and on the overall
performance of the class.
EXAMINATIONS:
Students who miss the midterm examination can apply to have the midterm examination marks added to the
final by providing official documentation within 5 days of the examination date. Late submission of
official documentation will result in a score of zero for the midterm. Attached to this course outline is a copy
of the I. H. Asper School of Business Medical Absenteeism Form, which must be submitted in case of
absences due to illness. Both student and attending physician need to sign this form, otherwise it will be
deemed invalid.
Students may not have in their possession at the time of writing any examination in this course:
textbooks, dictionaries, translators, cell phones, PDA’s, additional notes, or other extraneous material
(e.g. scrap paper) designed to supplement their own knowledge of course material. Each student will be
allowed to use calculators (without text storage capability), pens and pencils.
Formula sheets will not be provided for the examinations. For the Mid-term students are permitted to bring
in one (for the final 2) 8.5 by 11 inch sheet of paper on which they can write any formulas on both sides.
Formula sheets must be hand written (both sides permitted). NO word-processed or photocopied
material is allowed on your formula sheet. Improper formula sheets will be confiscated at the exam;
offending students will be allowed to complete the exam without any formula sheet. After the exam,
offending students will be referred to the Dean’s office on a violation of academic integrity.
RE-MARKING:
Any request for remarking the midterm examination must be made within 5 working days of the class when
it was returned.
LABS:
Corporate Finance Labs will be held on Wednesdays. Labs begin on Wednesday, May 7th. The structure of
a typical lab will be solving one to six or so problems (depending on the size of the problems). Note that
since most of the problems discussed at the labs are more advanced and do not overlap with those on the
assignments, you miss those labs at your own peril. The Lab instructor may reserve, at their discretion, 1020 minutes at the end of labs to answer student questions. Labs are there to help students to prepare for tests
in a less formal environment than lectures themselves.
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It is essential for students to prepare for labs by working through extra practice problem sets. Tentative lab
schedule is given below:
Lab Date Material Tested
Lab #1 May 7 Chapter 1, 3
Lab #2 May 14 Chapter 3, 4
Lab #3 May 21 Chapter 5
Lab #4 May 28 Chapter 6, 8, 8A, 9
Lab #5 June 4 Chapters 7, 10
Lab #6 June 11Chapter 11
Lab #7 June 18 Chapter 12, 14, 15, 16
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TENTATIVE COURSE SCHEDULE:
You will find that the course progresses quickly and the material covered builds on earlier material. It is
important to stay current in your studies otherwise you will not understand the new material as it is
presented. If you read the text in advance of the relevant classes, you will have a much better chance of
understanding the material as it is taught. It is the student’s responsibility to read the assigned material
prior to the relevant class.
Lecture
May 5
May 7,12, 14
Topic
Chapter
Course outlines;
The Corporation,
Introduction to Financial Statement Analysis
Arbitrage and Financial Decision Making
Note: students are to study Chapter 1 material
and the related class notes available on the first
day in class (these notes will also be posted on
D2L early in the term); Chapter 2 is considered
self-study (there are no class notes posted
relating to Chapter 2).
Time Value of Money; Present Values, Future
Values
Annuities & Perpetuities: Regular and Growing
Interest Rates,
Continuous Interest Rates
NO CLASS ON MAY !( MAKE UP CLASS ON FRIDAY MAY 23)
May 21, 23(FRI) ist Valuing Bonds,
half
Valuing Stocks
Forward Interest Rates
May 23 2nd half,
26,28
Investment Decision Rules,
Fundamentals of Capital Budgeting
May 28 2nd half,
June 2
Risk return and Portfolio theory
June 4 (Wed)
Midterm exam from 7:00pm to 9:00pm in the
class room include
Optimal Portfolio Choice
The Capital Asset Pricing Model (CAPM)
June 9, 11
June 16
Capital Structure in a Perfect Market;
Debt and Taxes;
Financial Distress, Managerial Incentives, and
Information
June 18
Options
Futures & Forwards
June 20, Friday: Final Exam from 6pm - 9Pm (Room TBA)
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1
2 (self study)
Chapter 3, 3A (omit pp. 88 to
90 “Arbitrage with
Transaction Costs”)
Ch 3 contd
4, (Omit 4.6)
5
8 (omit pp. 246 to 249 “Time
and Bond Prices”), 8A, 9
(omit pp. 280 to 283
“Dividends versus Investment
and Growth” and 9.3-9.4)
6, 7 (omit references to capital
gains on pp. 213 to 214, omit
remainder of the chapter from
pp. 216 to the end including 7A)
10 (omit pp. 328 to 330
“Standard Error”),11 (omit pp.
381 to 383)
material covered until May 28
11; 12 (omit 12.5 and 12.6, only
read pp. 430 Weighted
Average Cost of Capital in
12.7)
14 (omit 14.4 – 14.5),
15 (omit 15.5),
16 (omit 16.8)
20 (omit pp.722 to 723 topics
“Straddle” and “Butterfly
Spread”, 20.5 and 20.6)
30.2
ACADEMIC INTEGRITY:
It is critical to the reputation of the I. H. Asper School of Business and of our degrees that everyone associated
with our faculty behaves 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. 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 unauthorized materials into an examination or term test (e.g., crib notes)
 using any unauthorized materials in an examination or term test (e.g., 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 I. H. Asper School of Business require group projects.
Students should be aware that group projects are subject to the same rules regarding academic dishonesty.
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 I. H. Asper School of Business all suspected cases of academic dishonesty are passed to the Dean's
office in order to ensure consistency of treatment.
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UNIVERSITY OF MANITOBA
Faculty of Management
Medical Absenteeism Form
Student Identification: (please print clearly)
______________________________
Last Name
___________________ ___________ _______________________________
First Name
Middle Initial U of M Student Identification Number
I hereby authorize ________________________________ to verify with the attending physician or his/her
(Name of Instructor/Administrator)
staff or colleagues that the contents of this form are true.
________________________________________
_______________________________________
Student’s Signature
Date
To be completed by the attending physician: (after the above section is completed)
________________________________________
______________________________ ________________
Physician’s Last Name (please print clearly)
Physician’s First Name
Middle Initial
___________________________________________
Street Address
________________________________ __________________
City, Province
Postal Code
___________________________________________
Telephone Number
_________________________________
Fax Number
To the attention of the physician: Your evaluation of the student’s condition is being used for the purpose of
determining whether or not the student has a valid reason to miss an important exam or assignment. Your
professional evaluation is necessary to ensure that only valid cases are excused.
I certify that the nature of the student’s condition is severe enough to prevent the student from taking an exam or completing an assignment. If
requested, my associates or I will verify for the above-named instructor/administrator that this information is accurate.
The student’s condition will likely span the following dates:
____________________________
(indicate start date)
until ____________________________
(indicate end date)
___________________________________
_________________________________
Physician’s Signature
Date
Notes to physician:

Please make a note in the student/patient’s file indicating that the student has given the above-named
instructor/administrator permission to verify with you, your staff, or your colleagues, that the information
contained on this form is correct. Thank you for your professional evaluation of this student’s condition.
 PLEASE ATTACH THIS FORM TO YOUR REGULAR OFFICE STATIONERY THAT INDICATES
THE STUDENT VISITED YOUR OFFICE.
 The use of this form is at the option of the student. However, in order to obtain an excused absence
for an assignment or exam, the student must obtain a doctor’s certification that the student’s
condition is severe enough to prevent the student from taking the exam or completing the assignment
 It is NOT SUFFICIENT to provide a note that only indicates the student visited the doctor’s office.
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