Phone: (204) :30 p.m. 3:30 p.m. Mondays and Wednesdays or by appointment

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1 UNIVERSITY OF MANITOBA I.H. ASPER SCHOOL OF BUSINESS DEPARTMENT OF ACCOUNTING AND FINANCE FIN 3480 CORPORATE FINANCE THEORY AND PRACTICE Winter 2014 Instructor: Dr. Ying Zhang Office: 466 Drake Centre Phone: (204) Office Hours: 2:30 p.m. 3:30 p.m. Mondays and Wednesdays or by appointment PREREQUISITES: Required: Recommended: Corporate Finance FIN 2200 (C+) Students are assumed to have a working knowledge of Microsoft Excel and the creation of spreadsheets. COURSE OBJECTIVE: The purpose of this course is to give students a deeper understanding of finance theory and techniques and their applications to corporate financial policy. Topics include cost of capital, capital budgeting, capital structure, dividend policy, leasing, real options, and mergers and acquisition. REQUIRED MATERIAL: 1. J. Berk, P. DeMarzo, and D. Stangeland, Corporate Finance, Second Canadian Edition, Pearson Canada, Texas Instruments BAII Plus financial calculator or equivalent. GRADING AND EXAMINATIONS: Final grades are based on the student s weighted mark and performance relative to other students in the class. Assignments Two assignments worth 10% each 20% Midterm Exam Thursday, March 6 th, 2014, from 7:00 p.m. to 9:30 p.m. 30% Final Exam Location and time TBA 50% Students are not allowed to miss the assignment, or examination unless a valid medical excuse is provided. Students with valid medical excuses must complete and submit the Medical Absenteeism Form attached at the end of this syllabus. Both the student and the attending physician must sign the document otherwise the excuse will be deemed invalid.

2 There will be no make-up assignments or examinations. Students who miss a component and have a valid medical excuse will have the weight of that component added to the final examination. Students who miss a component without a valid medical excuse will receive a mark of 0% on that component. COURSE MATERIALS: Most supplemental material to the course (lecture notes, text book solutions, 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 On the University of Manitoba homepage ( click on current students. 2 On the current students page, click on Desire2Learn (D2L) link. 3 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 ( If you are having problems logging into your course visit the Accounts Office in 010 Dafoe Tunnel, contact the support desk by phone (204) or support@umanitoba.ca. 4 Once logged on to your D2L page, click on the FIN 3480 course title. For more information on how to use D2L read Student D2L Help Files when you are logged into D2L. Assignments: There will be two assignments during the term (each worth 10% of your final grade). Assignments will be made available during the term on the D2L as the term progresses. Assignments are due on the date and time specified below. Early submission of assignments may be made with no penalty. Late assignments receive a mark of zero. Tentative Assignment schedule: Assignment 1 due February 24 th, 2014 in class Assignment 2 due April 9 th, 2014 in class 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.) 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.

3 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 s 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 understanding the material as it is taught. It is the student s responsibility to read the assigned material prior to the relevant class. Dates Description Relevant Reading Jan. 6 Review of past concepts Jan. 8 Class cancelled Jan. 13 Inflation, real and nominal returns Ch. 5 pg Jan. 15 to 22 Cost of capital Ch. 12 Jan. 27 to Ch. 7, Ch. 7 Free cash flows and capital budgeting 29 Appendix Feb. 3 to 5 Sensitivity, scenario, and break-even analysis Ch. 7.5 Feb.10 to 12 Feb. 24 to 26 Mar. 3 to 5 Mar. 6 Mar. 10 to 12 Mar. 17 to 26 Mar. 19 Mar. 31 to Apr. 2 Apr. 7 to 9. Capital structure Midterm Break, Feb. 18 Feb. 21 Capital budgeting and valuation with leverage: WACC, FTE, and APV Leasing Ch. 25 Midterm exam 7:00 p.m. to 9:30 p.m., room to be announced. Payout policy Ch. 17 Ch. 14, Ch. 15, Ch. 16 Ch. 18, Ch. 18 Appendix Option valuation and Real options Ch. 21 Ch. 22 Last day for VW Equivalent periodic cash flows Mergers and acquisitions Ch. 28

4 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. Page 28 of 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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