F INANCIAL V ALUATION AND M ANAGEMENT FIN 501 B1 Winter 2020
Tuesday 2:00pm to 4:50pm
Vikas Mehrotra
Office: 4-20F Bus Bldg
Office Hours:11:00am to Noon, Tuesdays and by appointment E-mail: [email protected]
Phone: 780-492-2976
Course Objective
The objective in this course is to familiarize the student with the world in which financial managers operate. We will start with an examination of a financial manager’s job description. We will then move on to valuation of cash flows and bonds. The Capital Asset Pricing Model will be introduced, and we will study stock valuation. Next, the NPV rule will be applied to valuation of capital investments. In examining issues in portfolio diversification, knowledge of basic statistics and spreadsheets will be essential and assumed. We will also discuss issues in dividend policy, capital structure, and options pricing.
Textbook
Corporate Finance by Ross,Westerfield, Jaffe and Roberts, McGraw-Hill Ryerson, 8th Canadian edition.
Exams
There will be one midterm exam and a final exam. I shall also assign some weight to periodic assignments. Exams etc. have the following weights:
Mid-term Exam 120 minutes : 35 Final Exam 120 minutes : 35 Assignments Best 3 of 4 : 30
Total : 100
Grading
Grading will be based on a combination of relative and absolute understanding of the material.
The final grade will be based on the total course mark determined as per the following formula:
Course Mark = Max
{
(Mid-term + Finals + Assignments), (2xFinals + Assignments)}
Course Rules
Rule 501.1 Make-up Exams: If you miss the mid-term exam, the marks are automatically carried over to the final exam. If you miss the final exam, I will need a medical certificate to arrange a make-up exam. The make-up exam is scheduled for the week of July 13-17, 2020.
Rule 501.2 Exam Aids: You are allowed to carry a one-page (8½x11) sheet of paper with as many formulas as you can cram onto it. You may write on both sides. Personal computers (notebooks, laptops etc) are not allowed in exams. Financial calculators are allowed.
Rule 501.3 Email Policy: The instructor will respond to emails within two business days under normal circumstances.
Rule 501.4 Assignments: A total of four (4) assignments will be handed out. Of these, the best three scores will count towards the 30 points allocated to assignments.
Rule 501.5 Assignment Submissions: All assignments must be submitted on type written paper.
Electronic submissions (email attachments) are not acceptable. Assignments are due 6:30pm a week from the day they are handed out. Late submissions will not be marked and awarded zero.
Class Schedule
Jan 7 Ch. 1 Introduction to Corporate Finance
Jan 14 Ch. 5 Discounted Cash Flows
Jan 21 Ch 6 Bonds and Stocks Assignment 1
Jan 28 Ch 7&8 NPV and Capital Investments Assignment 2
Feb 4 Review of material for Exam 1 Feb 11 Exam 1 (Ch 1, 5, 6, 7, 8, 9 and 10)
Feb 18 READING WEEK – NO CLASS Feb 25 Ch 10&11 Risk and Return
Mar 3 Ch 13 Cost of Capital Assignment 3
Mar 10 Ch 20&21 Raising Capital Mar 17 Ch 16&17 Capital Structure
Mar 24 Ch 19 Dividends Assignment 4
Mar 31 Ch 23 Options
Apr 7 Review Session
Apr 22 EXAM 2 (comprehensive) 9:00AM – 11:00AM
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