UNIVERSITY OF MANITOBA I.H. ASPER SCHOOL OF BUSINESS DEPARTMENT OF ACCOUNTING AND FINANCE FIN 2200 - CORPORATION FINANCE (3 credit hours) Winter 2015: A02, Tuesdays & Thursdays, 1:00 pm 2:15pm, 115 Drake Instructor: Chi Liao Office: 458 Drake Centre E-mail: chi.liao@umanitoba.ca Phone: (204) 474-9486 Office Hours: Tuesdays & Thursdays 9:30am 11:30am or by appointment COURSE DESCRIPTION: An introduction to corporate finance regarding the allocation & acquisition of funds. Topics include: discounted cash flows, capital budgeting, financial instruments, cost of capital, risk-return trade-offs, market efficiency, capital structure and the use of derivatives. 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)]. 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, Third Canadian Edition, Pearson Canada, 2014 2. You can use the following calculators in this course: Texas Instrument: TI-BAII Plus. Hewlett Packard calculators: HP-10B, HP-10B2, HP-12C or more advanced HP financial calculators. I will explain how to use only TI-BAII Plus calculator and will use it for examples in class. MYFINANCELAB MyFinanceLab software allows students to practice course material without limit. The software will also help you to identify topics you still need to work on and will create a personalized study plan. We require that you complete a series of online homework assignments in MyFinanceLab. You will need a code to access MyFinanceLab assignments. There are two ways to acquire an access code: 1
1. A code is included with the purchase of a new textbook. New textbooks may be purchased from the Book Store. 2. Students not wishing to use a new hardcopy of the textbook may instead purchase a MyFinanceLab code separately on the internet from MyFinanceLab web page (see below). Course Name: FIN 2200 A02 Winter 2015 Course ID: liao95165 How to Register and Enroll in Your MyFinanceLab Course To join your instructor's course, please complete the following steps: Steps to Register: 1. Go to http://pearsonmylabandmastering.com and click Student under Register. 2. Click Register Now. 3. Enter the course ID: liao95165, and click Continue. 4. Sign in with an existing Pearson account or create an account: If you have used a Pearson website (for example, MyITLab, Mastering, MyMathLab, or MyPsychLab), enter your Pearson username and password. Click Sign in. If you do not have a Pearson account, click Create. Follow the instructions to create your account. Your ID should be the following: UMNetID@fin2200w15, where UMNetID is the id you use to log into Jump and D2L. For example, if a student s UMNetID is umsmithj, he/she should set his/her MFL id to umsmithj@fin2200w15 Write down your new Pearson username and password to help you remember them. 5. On the Register page, select one of the following access options: o Use an Access Code that came with your textbook or that you purchased separately from the bookstore. 1. Click Access Code and paste the entire access code into the first box. 2. Click Finish to complete your registration. o Purchase Access Online 1. Under Use a Credit Card or PayPal, click the button for the access level you want. For example, a product might be offered with or without an ebook. The button shows the subtotal for your order. 2. Select whether you want to pay with a credit card or use PayPal, then enter payment information. 3. Click Review to review your order details. If you need to change anything, click Change. Click Cancel if you decide not to complete your purchase. 2
4. Click Make Payment to submit your order. o If available, request Temporary Access for 14 days without payment: 1. Click Get temporary access without payment for 14 days at the bottom of the Register page. 2. When a confirmation message appears, click Yes to complete your registration. You will receive a confirmation email with payment instructions. 6. Click Go to Your Course on the Confirmation page. Under MyLab & Mastering New Design on the left, click FIN 2200 A02 Winter 2015 to start your work. Need to enroll in another course based on the same textbook as that in a current or previous course? Enter your existing Pearson Account Profile to enroll. You do not need to use a new access code or make a payment. To enroll in another course you should: 1. Go to https://register.pearsoncmg.com/userprofile and sign in on the Pearson Account Profile page. 2. Under the list of MyLab & Mastering products, click Enroll in a Course. 3. Enter the course ID from the instructor of the new course, confirm the course information, and click Continue. If prompted to provide an access code or purchase course access using a credit card or PayPal, the course materials do not match the previous course. Contact the instructor. 4. Click Enter Course Now to start using the new course. To sign in later: 1. Go to pearsonmylabandmastering.com. 2. Click Sign in. 3. Enter your Pearson account username and password. Click Sign in. 4. Under MyLab & Mastering New Design on the left, click FIN 2200 A02 Winter 2015 to start your work. Additional Information See Students > Get Started on the website for detailed instructions on registering with an access code, credit card, PayPal, or temporary access. Important Note: All communication with me should be done only via regular university email! Check announcements on D2L regularly. 3
GRADING AND EXAMINATIONS: Final grades are based on the student s weighted mark and performance relative to other students. Assignments available on MyFinance Lab 10% (homework) Bloomberg Project details will be provided in late February to early March, follow 10% in-class and D2L announcements Midterm Exam Saturday, March 7, 2015, 9 am 11:30 am, Location TBA 35% Final Exam Location and time TBA 45% COURSE MATERIALS Most supplemental material to the course (lecture notes, text book solutions, old exams, etc.) will be available on the course s Desire2Learn (D2L) site. Students are responsible for checking D2L and downloading the relevant material before each class. Follow the instructions below to log on to D2L: 1. Go to https://universityofmanitoba.desire2learn.com/ 2. Log into D2L using your UMnetID (formerly called your ccu account) account. You must have previously claimed your UMnetID account in order to log into D2L. If you have not done so, claim your UMnetID account by clicking on the ClaimID link under Current Students on the University of Manitoba homepage (www.umanitoba.ca). If you are having problems logging into your course visit the Accounts Office in 010 Dafoe Tunnel, contact the support desk by phone (204) 474-8600 or email support@umanitoba.ca. 3. Once logged on to your D2L page, click on the FIN 2200 course title. For more information on how to use D2L read Student D2L Help Files when you are logged into D2L. MyFinanceLab Homework Assignments (these are graded!) Assignments will be available throughout the term. You can access them through the MyFinanceLab (MFL) account, which requires your registration (see above). Pay attention to the assignments start and due dates and times. Late assignments will not be accepted. Check for course announcements on D2L regularly. Students experiencing difficulties with assignments are further encouraged, after thoroughly reading the text and reviewing class notes, to contact their instructors for assistance (see office hours). Tentative availability dates are as follows: Assignment Date Available Date Due Material Covered 8:00 am 7:00 pm 1 Jan 6 Jan 19 Chapters 1, 2, 3 2 Jan 6 Jan 26 Chapters 4 3 Jan 6 Feb 2 Chapters 5 4 Jan 6 Feb 23 Chapters 6,7 5 Jan 6 Mar 2 Chapters 8,9 6 Jan 6 Mar 23 Chapter 10, 11 7 Jan 6 Mar 30 Chapters 12 8 Jan 6 April 10 Chapter 17, 18, 19 4
Extra Practice on D2L (these are not graded but highly recommended): For your added benefit, you will have access to eight extra practice assignments and eight extra practice quizzes based on these assignments on D2L in Extra Practice and Quizzes folders, respectively. Neither these assignments nor quizzes are graded. You will have unlimited attempts at the quizzes. Once a practice set or a quiz shows up on D2L, it will stay there for the rest of the course (for your unlimited use). Even though quiz attempts are unlimited, there will be a time limit for each attempt. You will be able to see all this information (number of questions, time limit, etc.) when you click on a quiz and before you press Begin button to start taking it. Below is the availability of the optional quizzes and practice sets: Labs: Optional Practice Sets and Quizzes Date Available 12:00 am Material Covered 1 Jan 6 Chapter 1,2,3 2 Jan 6 Chapter 4 3 Jan 6 Chapters 4, 5 4 Jan 6 Chapters 6, 6A, 7 5 Jan 6 Chapters 8, 9, 9A 6 Jan 6 Chapters 10, 11 7 Jan 6 Chapter 11,12 8 Jan 6 Chapters 17, 18, 19 Corporate Finance Labs will be held on Fridays. Labs begin on Friday, January 9th. Each lab corresponds to a course section. Students are to show up for the lab that corresponds to the course section they are registered for. 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 usually more advanced than and generally do not overlap with those on the assignments, you miss those labs at your own peril. Lab instructors may reserve, at their discretion, 10-20 min 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. It is essential for students to prepare for labs by working through extra practice problem sets and quizzes (see above) in advance and to show up for labs regularly. Tentative lab schedule is given below: Lab Date Material Tested Lab #1 January 9 Chapter 3 Lab #2 January 16 Chapter 4, 5 Lab #3 January 23 Chapter 4, 5 Lab #4 January 30 Chapter 4, 5 Lab #5 February 6 Chapters 6, 6A, 7 Lab #6 February 13 Chapter 6, 6A, 7 Lab #7 February 27 Chapter 8, 9, 9A Lab #8 March 6 Chapter 8, 9, 9A Lab #9 March 13 Chapter 10, 11/Bloomberg Lab #10 March 20 Chapter 10, 11 Lab #11 March 27 Chapter 11,12 Lab #12 April 10 Chapter 17, 18, 19 5
Exams: Formula sheets will not be provided for the examinations. Instead, students are permitted to bring in one 8.5 by 11 inch sheet of paper on which they can write anything on both sides. For the final examination, each student may bring in an additional sheet of paper (8.5 x 11 inches) on which he/she can write anything. (Thus for the final, you may bring in a total of two sheets of paper.) You should begin preparing your formula sheet immediately. 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; 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. If you disagree with your midterm exam marking or believe that there was a miscalculation of the score, you have until Thursday, March 19, (inclusive) to ask your instructor to review your concerns and make necessary corrections if any. After March 19 we will no longer make any corrections to your midterm mark. General Academic Regulations on Missed Exams If you miss a mid-term examination or any other graded component of the course for personal or medical reasons, you must report to your instructor as soon as possible and provide written proof supporting your absence from that component or mid-term examination. Missing an examination is serious. Students who miss a component and have a valid medical excuse will have the weight of that component added to the final examination (for the definition of a valid medical excuse see policy, in bold, for final exams below). Students who miss a component without a valid medical excuse will receive a mark of 0% for this component of the course. If you miss a final examination for medical or compassionate reasons, you may be granted a deferred examination. Travel plans are not an acceptable reason to miss examinations. University 1 or your home faculty/school, as appropriate, can arrange a deferred examination for you. To make this arrangement, you must apply for a deferred examination after the examination has been missed within 48 hours of the date of the missed examination (see "Deadlines", below), and provide written proof (such as a medical certificate) supporting your reason for the missed examination. The dates of your illness or affliction must correspond to the dates of the examination. Students with valid medical excuse must complete and submit the Medical Absenteeism Form attached at the end of this syllabus. Both the student and the attending physician must sign this document, otherwise the excuse will be deemed invalid. Deadlines for Requesting a Deferred Final Exam (for medical or compassionate reasons) Exam Day Monday Tuesday Wednesday Thursday Friday Saturday Deadline to Request Deferral Wednesday Thursday Friday Monday (extended from Saturday) Monday (extended from Sunday) Monday 6
If your request is approved, you will, in most cases, be offered the opportunity to write another examination within 30 working days from the end of the examination series from which the examination was deferred. More information about this may be found in the General Academic Regulations and Requirements of the Calendar. PROFESSIONAL CONDUCT Students are expected to demonstrate professional conduct for the duration of the course. Some aspects of this include the following: attending each class and arriving on time, restricting discussions in class to the current course material, keeping mobile phones in the off or silent modes, and not placing or answering calls, text messages, or emails during class time. Unprofessional conduct is disruptive to the learning environment and makes mastering the course material more difficult for all students. 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 keeping pace with the material. It is the student s responsibility to read the assigned material prior to the relevant class. Lecture Topic Chapter Course outline (read it thoroughly!). Chapter 1 is a self-study. To refresh the material from the prerequisite accounting course, ACC 1100, study Chapter 2 on your 1,2 (self-study) own. The knowledge of material from chapters 1 and 2 will be assumed; it will not be covered in class. Jan 6-8 (2 days) Arbitrage and Financial Decision Making Chapter 3, (omit 3.7) Jan 13-27 (5 days) Time Value of Money, Interest Rates 4 (omit 4.6), 4A, 5 (omit 5.4) Jan 29 - Feb 10 (4 days) Valuation of Bonds and Stocks 6, 6A (omit Liquidity Preference Theory), 7(omit 7.3-7.4) Feb 12-26 (3 days) Capital Budgeting 8, 9 (omit 9.5) Mar 3 17 (5 days) Risk, Return, and Portfolio Theory 10, 11 Saturday, Mar 7 Midterm: 9 am 11:30 am, Location TBA 1, 2, 3, 4, 4A, 5, 6, 6A, 7, 8, 9 March 19 Last date for voluntary withdrawal Mar 19-24 (2 days) Capital Asset Pricing Model (CAPM) 11 (omit 11.6), 12 (omit 12.5-12.6, only WACC from 12.7) Mar 26 - Apr 2 (3 days) Capital Structure 17 (omit 17.4), 18 (omit 18.5), 19.1-19.4 Apr 7-9 (2 days) Derivatives 14 (omit Combinations of Options from 14.2, omit 14.5-14.6) TBA Final Exam: 3 hours Cumulative 7
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. 8
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