BU393 Course Outline PDF

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course outline for BU393...

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Course Syllabus Business 393 Financial Management IIII Depar Departmen tment of Business, School of Business and Economics, Waterloo Campus Fall 2020

Table of Contents 1

Instructor Contact Info............................................................................................................. 2

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Prerequisites............................................................................................................................. 2 Textbook .................................................................................................................................. 2

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Course Description .................................................................................................................. 2

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Course Goals............................................................................................................................ 3

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Student Responsibilities .......................................................................................................... 3

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Instructor Responsibilities ....................................................................................................... 4

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BU393 as an Online Course .................................................................................................... 4

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Grading Scheme ...................................................................................................................... 6

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Homework............................................................................................................................ 6

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Homework Schedule ............................................................................................................ 7

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Tests and Exams .................................................................................................................. 7

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Announcements.................................................................................................................... 9

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Academic Help..................................................................................................................... 9

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Revel Technical Support ...................................................................................................... 9

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Calculators and Computers .................................................................................................. 9

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Schedule and Readings ...................................................................................................... 10

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Online Textbook Access .................................................................................................... 11

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University and Course Policies .......................................................................................... 13

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Instructor Contact Info

1 Name

Section #s

Office

Phone

Email

Bruce Everitt

A4, B2

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4939

[email protected]

Hira Amjad

A5, A6

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2392

[email protected]

Peter Carayannopoulos

A2, B4

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3616

[email protected]

Paquita Freire

B3, B5

---

2581

[email protected]

Jin Wang

A1, A3, B1

---

[email protected]

Prerequisites

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BU283 Financial Management I

Textbook

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Required •

Stanley Eakins and William McNally. Corporate Finance Online – 2nd Canadian Edition (Ontario: Pearson Canada, ©2018). ISBN-13: 978-0134131764. o CFO access instructions are provided through the MyLS.Pearson widget.

Supplemental •

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William McNally. Student Workbook for Corporate Finance Online 1ce (Ontario: Pearson Canada, ©2015). ISBN: 0134174836. o The CFO Workbook is a supplement to the e-text Corporate Finance Online (CFO). The chapter sequencing and the content of each chapter in the workbook matches CFO. Each chapter in the workbook contains a series of questions: some quantitative and some qualitative. The questions guide the reader through the material and highlight the key intuition behind the ideas. Students who are serious about the course but have a weaker quantitative background might find that the workbook is a useful supplement to the e-text.

Course Description

BU393 presents the foundational tools and ideas of corporate finance. It is the second of two prerequisites to all other finance courses. If you plan to major in finance or accounting, this course is central to your program of study. If you do not plan to major in finance or accounting, then this course is still very important. The first third of the course shows students how to evaluate new project ideas. This is critical for getting others to accept and adopt your ideas. It is not enough to have a good project idea, you must show that the idea will add value for the company. The tools presented in capital budgeting will give you the ability to formalize the financial impact of a project.

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The second topic in the course is corporate valuation. This topic is important for two reasons. First, all managers need to understand how the market arrives at its valuation of a company so they can anticipate the market’s response to corporate initiatives and so that they can successfully maximize the market value. Second, valuation is important because the last three topics in the course explore how certain corporate actions impact value. The final third of the course explores three very common corporate activities: 1) borrowing (leverage); 2) cash distributions (dividends and repurchases); and 3) mergers and acquisitions.

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Course Goals

Our (the teaching team’s) overall goals are: 1. That you learn the foundational ideas and techniques of finance: 1) capital budgeting; 2) corporate valuation using the discounted cash flow methodology; 3) capital structure theory; 4) distributions; and 5) mergers and acquisitions. 2. That you develop and/or improve your critical thinking and problem-solving skills by practicing when and how to apply concepts to newly encountered problems in finance. 3. That you develop as a self-directed (self-regulated) learner. That is, that you become better at learning. For a good summary of self-directed learning go here: https://uwaterloo.ca/centre-for-teaching-excellence/teaching-resources/teaching-tips/tipsstudents/self-directed-learning/self-directed-learning-four-step-process 4. That you develop professional capacity. In particular, the ability to follow instructions. This will be particularly important with the computerized homework. This learning objective is consistent with level 6 “Professional Capacity” in the OCAV guidelines for undergraduate learning expectations. One dimension of professional capacity in finance is the ability to follow instructions.

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Student Responsibilities

With this course, we expect students to be self-directed, experienced learners. The design of the course requires that students plan and allocate their time to suit their learning needs. In the context of this course, this generally means working steadily, doing a little finance every day, reading the textbook before class sessions, completing the weekly homework on schedule, and being prepared for exams well in advance. To the topic of preparation for lecture, it is critically important that students read the textbook before class. This course is designed so that information transmission begins outside of class (through the online textbook) and that idea assimilation happens primarily in-class through discussion and the process of working on problems. To participate effectively in problem solving sessions, having the right tools is key: a laptop with a spreadsheet program is recommended, as many problems will be answered via a browser-based application. Finally, the best preparation for this course is to read this syllabus carefully and pay special attention to instructor e-mails and course news postings, to ensure that you are aware of all course policies and updates. We will endeavor to provide you with updates as the needs arise. If you have any questions about the course, it is best to ask your instructor as early as possible.

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Instructor Responsibilities

We will help you learn by providing the following: • A rich on-line learning environment with explanations of course concepts, video lectures, downloadable excel templates, interactive activities, and lots of practice problems with detailed solutions. • A list of clear and reasonable learning tasks and outcomes, with in-class activities appropriate for achieving these tasks and outcomes; • Assessment tools that treat all students equally, have academic integrity, clearly assess the stated learning tasks and outcomes, and provide useful and timely feedback so that you can learn from mistakes and move forward; • Sufficient contact time with the instructor through email and office hours.

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BU393 as an Online Course

Due to the COVID-19 pandemic, our regular in-class routine has been disrupted, and as such, the class will be held online through the Zoom video conferencing platform. Each instructor has created a Zoom meeting for the sections they will be teaching. The Zoom meetings are scheduled at the same time as the class lecture schedule. Using the course homepage on MyLearningSpace, you should be able to find a “Zoom Meetings” menu in the top menu bar (along with “Content”, “Grades”, etc.,). This heading will take you to a list of scheduled of meetings which you can join at specified start times. NOTE: before you can join your class meetings you must FIRST activate your Laurier Zoom account. To do this, go to https://zoom.wlu.ca and click on 'Sign In' then use your Laurier username and password to login. This will activate your account. Many of the instructors are delivering the course remotely for the first time, so instructions for meetings, office hours, and in-class evaluations will be delivered as we navigate our way through the term. We will do our best to communicate in a timely, accessible fashion any material and schedule updates. Video Lectures – Information Security and Recordings Synchronous (live) class sessions will be delivered in this course through the Zoom conferencing platform. Steps have been taken to protect the security of the information shared. For more information about Zoom, please visit ICT’s Tech Support and Services page. Class sessions may be recorded with the video and audio (and in some cases transcription) made available to students in the course in MyLearningSpace for the duration of the term. The recordings may capture your name, image or voice through the video and audio recordings. By attending in these live classes, you are consenting to the collection of this information for the purposes of administering the class and associated course work. If you are concerned about the use or collection of your name and other personal information in the class, please contact the course instructor to identify possible alternatives. You are not authorized to make a copy of the recorded class; it is provided for viewing purposes of students enrolled in the class and further distribution of sharing is strictly prohibited. To learn more about how your personal information is collected, used and

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disclosed by the University, please see Laurier’s Notice of Collection, Use and Disclosure of Personal Information. Weekly Work Schedule In general, finance is a problem-based discipline. That is, the majority of the learning you’ll do occurs while you work on problems; as such, this should dictate how you approach the course. Keeping a regular schedule can be difficult when there is no physical in-class regimen to follow, so we offer some pointers on how best to keep to a schedule of your own. Readings: To get the most out of this course we recommend that you approach each week as follows. At the beginning of the week you should do the assigned readings. A how-to approach to finance readings can be found via video here: https://youtu.be/3V-t7XFkoOE. On your first pass of a chapter your goal is to understand the basic learning objectives and the big ideas within each objective. Get comfortable with the basic terminology. Practice Problems (Not Graded) The textbook provides a wealth of practice problems (not graded), which are great practice while you’re reading through the material. Be sure to read each of the learning objectives through one at a time. Go through each of the examples and watch the appropriate videos if you do not understand the written description. After you are finished reading the learning objective, you should attempt some of the practice problems for that learning objective. When you are stuck, look back through the text for help. There might be a worked example on a similar problem. When working on problems, we strongly recommend that you do not look at the Revel solution tools until you have worked through the problem and have your own answer. Peaking at the learning tools can create the illusion of learning when none has occurred. Homework (Graded) Once you feel confident that you understand the material, its time to complete the graded assignment associated with the chapter. See the “Homework Schedule” section for due dates. A recent study of student performance in introductory finance found that a student’s grade improves with the number of questions attempted and with the number completed correctly. 1 So, try to do as many of the available problems as possible. (Do them all if you can!)

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“Determinants of Performance in a Hybrid Finance Course” with Brian F. Smith. 2010. Advances in Financial Education. Vol. 8, Issues 1&2, pp. 22-34.

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The average student should expect to spend six or seven hours outside of class reading, watching videos and working on problems. Students with weaker quantitative skills may need to spend more time. Since this is a relatively large amount of time, students should do a little every day.

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Grading Scheme

The course follows the grading scheme in the table below.

Homework Test 1 Test 2 Final Exam Total Grade

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Mark Breakdown 20% 20% 20% 40% 100%

Homework

There will be homework regularly delivered through Revel. The graded homework can be found under the Assignments menu on the left-hand navigation bar of the main Revel page. The graded homework assignments are just a subset of the problems available for each chapter. The homework can be started and stopped as desired and answers will be saved. The homework can be completed on any computer. For the Homework, numeric questions can be attempted an unlimited number of times. The numeric homework questions are algorithmic. Each student’s homework assignment has the same questions, but the questions have different numbers. Each time a question is regenerated it will have different numbers. Most qualitative homework questions can only be answered once (these are multiple choice or with drop-down menus). Homework Mark Each student’s homework mark will be constructed as follows: ฀฀ ฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀฀ ฀฀฀฀฀฀฀฀ = min � , 100� ฀฀ − 10 Where k is the number of points earned and N is the total number of points possible across all assignments. If there are 160 questions and you answer 120 correctly, then your homework and quizzes mark is 120/(160-10) = 82.6%. The 10 subtracted questions (in the denominator) are ‘gimme’ marks. You can miss up to 10 questions without penalty. The maximum mark is 100. With so many deadlines, there are many events that might cause you to miss a deadline. For example, your home internet connection might fail, your computer might break, you might sustain a sports injury, you might have a health problem or a family emergency. Regardless of the reason, no extensions will be given to students who cannot complete an assignment on time. The 10 ‘gimme’ marks (described above) are provided to mitigate the loss associated with one of these

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events. No additional gimme marks will be provided. To reduce the risk that a problem interferes with completing homework, you should start the assignments well before the deadlines.

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Homework Schedule

All homework will open on Revel at the beginning of the semester, so that you can work on them earlier than the week that the topics are covered, if you wish. Some homework questions can be done simply by reading and understanding the chapter, while others the may require some in-class discussion and practice before they can be satisfactorily completed. PRACTICE HOMEWORK TITLE Homework: Chapter 11

DUE SEP 26 OCT 03

Homework: Chapter 9

OCT 17

Homework: Chapter 10

OCT 31

Homework: Chapter 14

NOV 07

Homework: Chapter 17

NOV 21

Homework: Chapter 13

DEC 05

Homework: Chapter 12

DEC 9

Homework: Chapter 19

DEC 9

Homework: Chapter 20

IN CASE OF DISCREPANCIES, THE DATES AND TIMES ON REVEL ARE OFFICIAL.

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Tests and Exams Name Test 1 Test 2 Final

Date Oct 19/20 Nov 16/17 TBA

Time In Class In Class TBA

Duration (mins) 75 75 150

Weight 20% 20% 40%

We have scheduled two tests and a final exam throughout the term to help spread out the evaluations across the material of the term. Because the course is online, we feel that two tests that are designed to be shorter than a typical midterm partitions the material in more manageable blocks. These tests and the final exam will be delivered through MyLearningSpace.

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The tests will be conducted with/on laptops, so students can use Excel. Students may not communicate with anyone with any software (i.e., Facebook or Google Chat.). The final exam will be open book. A formula sheet will NOT be provided with the exam. While the tests allow you to access material to aid you, you should not rely on being able to look-up facts or techniques. The test will have more questions than can reasonably be looked up and answered in the time allotted. Thus, the more you look up the fewer questions you can complete. Students who are better prepared will answer more questions and score higher. More information on the content and procedures for each evaluation will be provided closer to each evaluation date. Missed term work If a student misses a test because of illness, or for some other unexpected major life event, such as a death or a serious illness in their immediate family, the student must complete both of the following steps: 1. Give immediate email notice of student illness or unexpected major life event to the instructor prior to the scheduled test start time. (An Email to [email protected] will suffice). 2. Within 48 hours after the start time of the test, complete the self-declaration form found here. https://web.wlu.ca/illness/ Provided the student fulfills both steps 1 and 2 with sufficient detail to confirm the existence of illness or unexpected major life event and no other contradictory information becomes known to the instructor, then the weight of the test will be transferred to the final exam. In all other cases, the student will receive zero on the midterm exam...