FACULTY OF MANAGEMENT FINANCIAL MANAGEMENT MGT 4430 Y SPRING 2017 FRIDAYS, 6 P.M.-8:50 P.M. ROOM: S5021 INSTRUCTOR OFFICE HOURS Grahame Newton, B.A., M.B.A., CFA grahame.newton@uleth.ca Phone 403-681-0035 Fridays 5:00pm 6:00pm (prior to class) by email appointment COURSE MATERIALS Required Textbook: Custom Course Pack: Cases in Financial Management, Spring 2017 (Order through bookstore.uleth.ca) PREREQUISITES/ CO-REQUISITES/EQUIVALENTS MGT 3412 (FUNDAMENTALS OF INVESTMENTS) and MGT 3470 (CORPORATE FINANCE) COURSE DESCRIPTION This is a capstone course in finance which involves financial management and decision making in a corporate environment and incorporating concepts that you have learned in your previous finance courses. Capital budgeting, valuation, loan decisions and other financial topics will be emphasized using case methodology to focus our analysis. Rather than introducing new concepts, the purpose of the course is to integrate the various topics in finance that are covered in the required courses and options in the Finance major. Case studies and discussions will be used to bridge the gap between finance theory and its applications to practical problems in finance, on the assumption that you are already familiar with basic concepts from previous courses. Also, the course will utilize knowledge gained in accounting, statistics, micro-economics, and business finance to analyze real business decisions. MGT 4430 Y Spring 2017 1
COURSE LEARNING OBJECTIVES Upon completion of this course, students are expected to be able to: o Apply fundamental ideas of financial economics to real-life problems of business valuation and financial decisions with all the complexities the real world entails; o Obtain a deeper understanding of the theory underlying corporate finance in order to apply it sensibly to practical situations; o Understand and deal with the ambiguities inherent in financial management; and o Value companies and projects utilizing a variety of methods. METHOD OF ASSESSMENT PERFORMANCE ASSESSMENTS ASSIGNMENT VALUE DUE DATE Class Participation 10% Ongoing Tests (4@10% each) 40% Feb. 3, Feb. 17, Mar. 10, Mar. 24 Group Presentation 20% Various as noted in schedule Final Exam 30% April 21 Total 100% 1. Class Participation This is primarily a case course and students will benefit from regular attendance and active participation in classroom discussion. You will be expected to have read and analyzed the case prior to the class in which it is presented. The instructor may pose questions from time to time and students will be asked for their comments and assessment of the issues raised. You are not expected to speak on every case participation in about 75% of the presentations will be considered sufficient to be eligible for a score of 10. Keep in mind, however, that frequency of participation is not the only assessment criterion. The quality of your comments matters. By necessity, the participation marks will be subjective based on the discretion of the instructor. If you do not speak, you may lose up to 10% of your final grade. 2. Tests There will be four tests in the semester. The tests are individual assessments and are non-cumulative. They will test concepts currently being studied and will be based directly or indirectly on the course cases. If you must be absent for a test for a valid reason (illness, family emergency, etc.), please contact the instructor as soon as possible and arrangements will be made for you to write a make-up test. NOTE: WORK COMMITMENTS OR VACATIONS ARE NOT CONSIDERED VALID REASONS TO MISS A TEST. IF YOU MISS A TEST AND DO NOT HAVE A VALID REASON, A SCORE OF 0 WILL BE AWARDED FOR THAT TEST. 3. Group Presentation This is a group-based assessment. The class will be divided into small groups and each will be assigned one of the course cases. Groups will present an analysis of the assigned case and will be asked to lead the class discussion on the case. Members of the group will be free to choose how to present the case: PowerPoint slides, handouts, whiteboard, or any combination thereof. Marks will be awarded both for the content and quality of analysis, as well as effectiveness of the presentation. 4. Exam The final exam will consist of some or all of the following types of questions: multiple choice, true-false, short-answer, calculation. It will be 2 hours in length. The final exam will relate directly to the cases and the lectures delivered during the course. Students are advised to prepare by reviewing their case notes, lecture material and test results. MGT 4430 Y Spring 2017 2
LATE ASSIGNMENTS There are no individual assignments in this course, but students will be required to participate in a group presentation of one of the cases we will study. The group presentations must be scheduled in advance and no alternate dates are available should any of the presentations be missed. Accordingly, any group that is not prepared to make its presentation on the date scheduled will receive a mark of zero. Members of the group will be expected to establish their own rules and guidelines as to how each student will contribute to the presentation. Any member who does not meet the commitments made to others in the group may, subject to the instructor s judgement, be asked to leave the group and will receive a mark of zero on the assignment. GRADING SCHEME Percent Mark Letter Grade Percent Mark Letter Grade 95-100 A+ 90-94 A 86-89 A- 82-85 B+ 78-81 B 74-77 B- 70-73 C+ 66-69 C 62-65 C- 58-61 D+ 50-57 D 0-49 F COURSE POLICIES 1. Pre-requisites and Co-requisites: It is the responsibility of the student to check the Calendar-mandated pre/corequisites for all courses before registration (link to Course Catalogue: www.uleth.ca/ross/courses). If students are found to be registered in a course where they do not sufficiently meet its associated requisites and that they have not received prior permission from the appropriate program chair to register in it, then they will be de-registered. Should this circumstance occur after the course drop deadline, tuition will not be refunded. 2. Makeup Examinations and Quizzes: Alternative arrangements for writing a missed, non-final, examination (e.g. inclass test, quiz, or midterm) may be made at the discretion of the instructor. Deferrals may only be granted in extenuating circumstances beyond the student s control. 3. Final Examinations: Students who are unable to write a Registrar-scheduled final exam due to extenuating circumstances or for other reasons beyond their control, must: (1) complete a Special Final Examination Request Form (link: www.ulethbridge.ca/sites/default/files/special%20final%20examination%20v%201.pdf) (2) enclose evidentiary support of legitimate absence (e.g. doctor s note for severe illness), and (3) submit all compiled documentation to their respective Academic Advisor for review. The final decision for the student s Special Final Examination Request will be made at the Dean s level. Requesting an alternate final examination time for personal reasons (e.g. work commitments, holidays, traffic, the purchase of a non-refundable airline tickets etc.) is not a legitimate reason for missing a final exam. 4. Conduct of Examinations: The instructor may articulate regulations for late entry to and early exit from the examination room. Instructors may also prescribe or restrict materials that may be used during the exam. No material aids including such items as: mobile phones, computers, or other digital devices, may be brought into the examination site without prior approval from the instructor. Please see additional examination policies in the 2016/2017 University Calendar page 82-83 (www.uleth.ca/ross/sites/ross/files/imported/academic-calendar/2016-17/part04.pdf). MGT 4430 Y Spring 2017 3
COURSE POLICIES (Cont.) 5. Student Conduct: Special care should be taken to understand the university s position on academic and nonacademic misconduct as listed in part 4, sections 4 through 8 of the 2016/2017 Academic Calendar (www.uleth.ca/ross/sites/ross/files/imported/academic-calendar/2016-17/part04.pdf). It is the responsibility of the student to read, familiarize, and comply with these policies. Students will respect the basic standards of intellectual integrity, including, but not limited to, refraining from plagiarism, cheating or duplicating someone else s work. In addition, students are expected to take an active role in encouraging other members of the academic community to refrain from academic dishonesty, and are asked to advise the instructor if they are aware of any such violations. This provision applies to any work submitted as a group project. 6. Academic Dishonesty and Plagiarism: Academic Dishonesty and Plagiarism will not be tolerated and will automatically result in a zero grade for the submission. Any student caught plagiarizing may also be subject to additional University sanctions. CLASSROOM EXPECTATIONS Students are strongly encouraged to attend classes regularly. Infrequent or sporadic attendance will affect your class participation mark, as well as your ability to understand the concepts presented and your overall success in the course. As mentioned, this is primarily a case discussion course and students are encouraged to discuss the issues among themselves and with the instructor. Please be considerate by respecting others points of view and allowing them to express their opinions before responding. The key to realizing the maximum benefit from the course is to participate. You will gain much more if you play an active role rather than just listening to others. LIBERAL EDUCATION & HOW IT APPLIES TO THIS COURSE Liberal education has been a community tradition at the University of Lethbridge since its founding. Our principle of liberal education is based on four pillars: (1) encouraging breadth of knowledge; (2) facilitating connections across disciplines; (3) developing critical thinking skills so that our graduates can adapt to ever-changing employment and social conditions; and (4) emphasizing engaged citizenship in our communities at all levels from the local to the global. We help students become creative explorers, innovative critical thinkers, and leaders who can navigate through complex global issues and who use the breadth, connections, and skills developed here to make our world a better place for all. This course will address the liberal education pillars in the following ways: By presenting case studies highlighting techniques and analytical tools frequently employed in business to give students practical experience in developing the skills needed to succeed in the professional world. By encouraging students to discuss and debate current issues in finance to assist them in analyzing and understanding economic trends and developments and how they affect business. By emphasizing the importance of continuing education and encouraging student involvement in community and industry organizations (e.g., CFA Society) aimed at promoting ethical and professional conduct within the financial services sector. MGT 4430 Y Spring 2017 4
CLASS SCHEDULE Below is a tentative outline. Recognizing that teaching excellence requires a degree of flexibility and responsiveness to both students' needs and emergent circumstances, adjustments to the course outline may sometimes be necessary, provided no student is disadvantaged by the change. DATE TOPIC PRE-CLASS READING Wk 1 Jan. 13 Course Introduction and Overview Lecture: Cost of Capital Wk 2 Jan. 20 Case Study: Cost of Capital Lecture: Capital Budgeting Wk 3 Jan. 27 Case Study: Capital Budgeting Lecture: Capital Structure and Financing Wk 4 Feb. 3 Group Case Study Presentations TEST #1 Wk 5 Feb. 10 Lecture: Raising Capital and Dividend Policy Wk 6 Feb. 17 Group Case Study Presentations TEST #2 Feb. 24 READING WEEK NO CLASS Wk 7 Mar. 3 Lecture: Valuation Methods Wk 8 Mar. 10 Group Case Study Presentations TEST #3 Wk 9 Mar. 17 Lecture: Loan Requests Wk 10 Mar. 24 Group Case Study Presentations TEST #4 Wk 11 Mar. 31 Lecture: Mergers and Acquisitions Encana Corp. Fortune Minerals Borders Hotel Rocky Mountain High Ski Resort Telus Corporation JetBlue Airway IPO Rushway Brothers Rajat Bhatia s Business Plan Sophisticated Petites Envy Rides Inc. Wk 12 Apr. 7 Case Study UGG Ltd. Apr. 21 FINAL EXAM MGT 4430 Y Spring 2017 5