FIN401 Course Outline Sec 701E Thur W2021A PDF

Preview

Summary

Course Outline 2021 Winter....

Description

FIN 401 Managerial Finance II – Winter 2021 (ONLINE) Instructor: Edward H. Blinder Class Time: Section 701E, Thur 6:30PM-9:30PM Office Hours: after class Course Website: my.ryerson.ca (D2L) E-mail: [email protected] PREREQUISITE: FIN 300 or ECN 320 or HTA 602 E-MAIL USAGE & LIMITS: Only Ryerson email accounts are to be used for all email correspondence with me. Emails from any other domain (Hotmail, Gmail, etc.) will not be opened or answered. Please be sure to include your full name, student number, and section number in all correspondence. Emails will usually be answered within 1 business day. If you have not received a response within 2 business days, please send me a follow-up e-mail or see me during office hours. COURSE DESCRIPTION: This course builds on the material in Finance 300. The topics cover various aspects of corporate decision making, including capital budgeting and cost of capital, leasing, capital structure, dividend policy, raising capital, and mergers and acquisitions, with the fundamental concept of value maximization being emphasized throughout. In addition, students are introduced to derivative securities and their uses for corporate risk management. The course concludes with an examination of issues in corporate governance and financial ethics. COURSE OBJECTIVES: Upon completion of the course, students will be able to: 1. Understand more fully the role of capital budgeting, leasing, and mergers and acquisitions in the corporate financial decision-making process. 2. Understand the issues involved in the capital structure and dividend policy decisions, why the decisions are not irrelevant, and what types of financing are available to firms. 3. Understand the importance of risk management in the corporate financial decision-making processes. 4. Be able to recognize some of the ethical issues inherent in corporate financial decision making. 5. Read the Financial Section of the newspaper. REQUIRED TEXT AND MATERIALS: Textbook: Berk, DeMarzo, Harford, Stangeland, and Marosi, 2019. Fundamentals of Corporate Finance , Third Canadian Edition, Pearson. MyFinanceLab Access Code: MyFinanceLab access can be purchased bundled with the course textbook or as a standalone option. A financial calculator or a calculator that performs financial functions is required.

EVALUATION: The grade for this course is composed of the mark received for each of the following four components: Course Component In-Lecture Quizzes MyFinanceLabs Midterm Exam Final Exam TOTAL

Percent/Weight 15% 25% 30% 30% 100%

In-Lecture Quizzes: There are seven quizzes that must be completed by each student online within D2L during allotted class time (after lecture end). The students must do these quizzes individually. Each of the seven quizzes will have 3 to 5 multiplechoice questions covering material from that particular lecture. Only your best 5 out of 7 quiz scores, with each being weighted equally, will be used for grading purposes. You will not be able to take any of the quizzes after their deadlines have passed. Note: if you miss a quiz, no makeup is possible. The information for all quizzes is provided below and will also be posted on D2L. Quiz Number Quiz #1 Quiz #2 Quiz #3 Quiz #4 Quiz #5 Quiz #6 Quiz #7

Associated Week Chapter Coverage Week #4 16 Week #6 16 Week #7 17 Week #9 14 Week #10 13 Week #11 21 Week #12 24

MyFinanceLabs: There are a total of nine MyFinanceLabs that must be completed by each student. The students must do these labs individually. Each of the nine labs is weighted equally for grading purposes. The due dates for all labs are provided below and will also be posted in MyFinanceLab and on D2L. Since the schedule has already

been determined and you can work on any/all of the labs immediately, no extensions will be granted to lab deadlines for any reason and the dates provided are final. You may make a maximum of TWO attempts at any lab. Your best score out of the two attempts will be the one used for grading purposes. However, after the due date has passed, you will not be able to make any additional attempts at the labs for marks. Lab Number Chapter Coverage Lab 1 4, 6, 7 Lab 2 8, 9 Lab 3 12 Lab 4 16 Lab 5 17 Lab 6 14, 15 Lab 7 13, 15 Lab 8 21 Lab 9 24

Deadline (11:59PM EST) Sunday, February 14, 2021 Sunday, February 21, 2021 Sunday, February 28, 2021 Sunday, March 7, 2021 Sunday, March 14, 2021 Sunday, March 21, 2021 Sunday, March 28, 2021 Sunday, April 4, 2021 Sunday, April 11, 2021

Exams: All exams for this course will be taken ONLINE through D2L. The format of the regular midterm and final exams will be 100% multiple choice . Any and all material covered during class time will be examinable, as will any and all material assigned from the readings, whether or not covered during class time. The final exam is cumulative, covering the material from the entire course. Both the midterm and final exams are open book, where you are allowed to have your course notes and textbook for reference. You are also allowed to use a financial (and/or standard) calculator. MISSED EXAMS If a student does not attend the midterm exam for medical or religious/spiritual observance reasons and follows all proper procedures (outlined below, under Health Certificates and Religious, Aboriginal and Spiritual Observance, respectively), the weight of the missed midterm will be automatically added to the weight of the final exam, making the final exam worth 60% of the overall course grade. If the student fails to follow these proper procedures, the student is ineligible to have the midterm weight transferred to the final exam and will thus receive a midterm exam grade of zero. If a student does not attend the final exam for medical or religious/spiritual observance reasons and follows the proper procedures outlined below, they will be eligible to write a makeup final exam. There will be ONE date for the makeup final exam with the date and time to be determined. Students who do not attend the midterm or final exam will receive a grade of zero on that exam unless (1) they submit within three working days completed and approved documents to their program office attesting to their inability to write the test, AND (2) they notify their instructor via e-mail prior to or during the time of the exam . Emails received after the exam time is completed will not be considered. •

Health certificates – If a student misses the date of an exam for health reasons, they should notify their instructor via email before the exam is complete and submit a Ryerson Student Health Certificate AND an Academic Consideration Request form within 3 working days of the missed date. Both documents are available at www.ryerson.ca/senate/forms/medical.pdf.

•

Religious, Aboriginal and Spiritual Observance – If a student needs accommodation because of religious, Aboriginal or spiritual observance, they must submit a Request for Accommodation of Student Religious, Aboriginal and Spiritual Observance AND an Academic Consideration Request form within the first 2 weeks of the course or, for a final examination, within 2 weeks of the posting of the examination schedule. Both documents are available at http://www.ryerson.ca/senate/forms/relobservforminstr.pdf.

Academic Accommodation Support – Before the first graded work is due, students registered with the Academic Accommodation Support office (AAS) should provide their instructors with an Academic Accommodation letter that describes their academic accommodation plan. Ryerson University acknowledges that students have diverse learning styles and a variety of academic needs. If you have a diagnosed disability that impacts your academic experience, connect with Academic Accommodation Support. Visit the AAS website or contact [email protected] for more information. (Note: All communication with AAS is voluntary and confidential and will not appear on your transcript.)

COURSE OUTLINE AND SCHEDULE: Please note that most materials posted on D2L Brightspace under the heading of Course Materials will be used during class, and that you are responsible for all of them. You should also review those materials in advance of attending each class. Problems assigned from the text are not evaluated. You should do them as a helpful exercise but you do not submit them. The planned schedule is as follows: Week Topic and Class Preparation 1

Introduction to FIN 401 Introduction to the Course; Review of Selected Topics from FIN300 Readings: Ch. 3 (sections 3.3 & 3.4), 4 (all), 6 (sections 6.1 – 6.3), and 7 (sections 7.1 – 7.4) Problems: Ch. 3: 18 – 21, 24 – 29; Ch. 4: 1, 2, 7 – 19, 26 – 29, 31, 37, 39; Ch. 6: 1 – 3, 5 – 8; Ch. 7: 1, 4 – 15, 18 – 20

2

Investment Decision Rules and the Fundamentals of Capital Budgeting Readings: Chapters 8 (all) and 9 (all) Problems: Ch. 8: 1 – 11, 13, 15 – 19, 21, 23 – 27, 30 – 34, 38; Ch. 9: 1 – 17

3

Determining the Cost of Capital Readings: Chapter 12 (all) Problems: 1 – 3, 5 – 25

4

Capital Structure – Part I Readings: Chapter 16 – sections 16.1 and 16.2 Problems: 1 – 3, 4a, 5 – 8

5

WINTER READING WEEK – NO CLASS

6

Capital Structure – Part II Readings: Chapter 16 – sections 16.3 to 16.7 Problems: 9, 11 – 29, 31 – 33

7

Payout Policy Readings: Chapter 17 (all) Problems: 1 – 25

8

MIDTERM EXAM (covering Chapters 4, 6-9, 12, 16, and 17) No teaching will be done in this class.

9

Raising Equity Capital and Debt Financing Readings: Chapters 14 (all) and 15 (section 15.1) Problems: Ch. 14: 1 – 22

10

Options Readings: Chapter 13 (sections 13.1 – 13.3) and “Convertible Provisions” section of Ch. 15 Problems: Ch. 13: 1 – 9; Ch. 15: 11, 12

11

Risk Management Readings: Chapter 21 (sections 21.2 – 21.3, excluding “Swap-Based Hedging”)

Problems: 5 – 9

12

Mergers and Acquisitions Readings: Chapter 24 (all) Problems: 1 – 8

13

Corporate Governance & Executive Compensation Readings: Chapter 25 (all)

METHOD OF INSTRUCTION: This course will incorporate a combination of lectures, discussion, and problem solving. You will find that I encourage both questions and answers from my students. I will encourage you to think, analyze, evaluate, and problem solve, not memorize. I will generally assume that you have prepared for class (i.e., have read the assigned materials and have attempted the assigned problems) and I invite you to attend my virtual office hours or make an appointment if you have any problems with the material. You will find that if you don’t prepare for class, the classes may be tough to follow. Historically, this course has had a high failure rate. Effective preparation before class will really help.

POLICIES & COURSE PRACTICES: Recording of Lectures The live lectures on Zoom will not be recorded. However, video clips and other resources containing the more important material may be posted on D2L or in a Google shared folder. For privacy and academic integrity reasons, video recording of the class lectures is NOT allowed. Course Management Every effort will be made to manage the course as stated. However, adjustments may be necessary during the term at the discretion of the instructor. If so, students will be advised, and alterations will be discussed prior to implementation. Students will be advised through the use of in-lecture announcements and/or by an announcement on D2L. University Policies Students must be reminded that they are required to adhere to all relevant university policies found in their online course shell in D2L and/or on the following URL: http://ryerson.ca/senate/course-outline-policies

Academic Grading Policy Evaluation of student performance will follow established academic grading policy outlined in the Ryerson GPA Policy http://www.ryerson.ca/senate/policies/pol46.pdf. The grading system is summarized below: Definition

Excellent

Good

Satisfactory

Marginal

Unsatisfactory

Letter Grade

Grade Point

Conversion Range

A+

4.33

90-100

A

4.00

85-89

A-

3.67

80-84

B+

3.33

77-79

B

3.00

73-76

B-

2.67

70-72

C+

2.33

67-69

C

2.00

63-66

C-

1.67

60-62

D+

1.33

57-59

D

1.00

53-56

D-

0.67

50-52

F

0.00

0-49...