WINTER 2014
FIN 501 Syllabus
Instructor: András Marosi
2-32F Business Building (780) 492-5365
[email protected] Office:
Phone:
E-mail:
Office hours: T Th 11:50AM to 12:50PM (right after class)
Objective: This course is intended to provide a framework for analyzing major types of financial decisions made by corporations. The lectures, readings, and assignments will provide an introduction to discounted cash flow techniques, financial asset valuation, capital budgeting and option valuation problems.
Text: Corporate Finance, 2nd Canadian Edition by Berk, DeMarzo and Stangeland, 2011, Pearson Canada.
Office Hours: See above. I am also available by appointment, via e-mail or through the class message board.
Grading: Course grades will be determined by combining points earned for participation, assignments, a midterm and a final examination. The weights given to the assignments and exams are:
% of total grade
Participation 10%
Assignments 20%
Midterm 30%
Final 40%
Total 100%
Each topic will have a set of assigned problems, which will be graded. I require one submission from each group. Assignments will be posted to the course website at least two weeks prior to the deadlines (see the schedule below for deadlines). Please solve these and submit them before class on the deadline date. Hard copies are preferred. Electronic submissions are acceptable but must be properly formatted for printing (especially Excel spreadsheets). Late submissions will not be marked and awarded zero. While each student does not have to hand in a solution, each student has an interest in knowing how to do the problems.
If you miss the midterm or the final, I require notification of the reason you missed the exam as soon as possible. If you missed the exam due to incapacitating illness, or if you have official documentation to support your request for excused absence (court documents, police report etc.), the weight of the midterm will be applied to your final exam. If you miss an examination due to unacceptable reasons (vacations, weddings, travel arrangements), you will receive a zero on that exam. A student who is absent from the final examination for a legitimate reason may apply for a deferred examination. (The deferred final exam is tentatively scheduled for May 15, 2014; there will be no “early final exams” or other alternative scheduling arrangements: students must take the exam either at the regularly scheduled time or on the deferred exam date.) Please refer to the University Calendar for further details regarding absence from exams:
http://www.registrar.ualberta.ca/calendar/Regulations-and-Information/Academic-Regulation/23.5.html#23.5 These represent the only marks available to students. Make-up or extra work to improve your grade is not possible. Once assigned, the final grade in the class will not be changed except in the case of a recording error.
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If you feel that your grade is incorrect, you must notify me in writing during the one-week period following the receipt of your marked exam. (Grades will be available within one week of exams.) After that, the problem will not be researched. Please note that a request to have a question on your exam re-graded entails a request to have the entire exam re-graded.
Students will be allowed to bring one double-sided 8½×11 inch "cheat sheet" to the midterm and two such cheat sheets to the final exam. There are no restrictions on what students can put on these sheets but they must be in human handwriting or regular size font (Times New Roman 11, Arial 10 etc.) and may not be mechanically altered (i.e. reduced by a photocopier). Personal computers (notebooks, laptops etc) are not allowed in exams.
Programmable calculators must be "de-programmed" before exams. If you have a programmable calculator, I suggest that you bring a different calculator for exams if you want to retain any programmed information.
The final exam will be non-cumulative, though questions could use concepts discussed during the first half of the course.
A financial calculator, while useful in this class and allowed during exams, is not required. A calculator that has yx, ex and lnx functions is sufficient.
Readings and Class schedule: The schedule may be modified as the semester progresses, if some topics take more or less time than budgeted. Readings and/or chapters from the text may be added or deleted at a later date.
Please try to read the relevant materials before each session.
Topic Chapter Date
Introduction 1, 2, 3 January 7
The Time Value of Money 4 January 9
Time Value of Money Continued 4 January 14
Time Value of Money Cont’d 5 January 16
Valuing Bonds 8 January 21
Valuing Bonds Cont’d (Assignment 1 Due) 8
(also Duration in 30.4) January 23
Valuing Stocks 9 January 28
Valuing Stocks 9 January 30
NPV and Alternative Investment Rules 6 February 4
NPV & Alt. Inv. Rules Cont’d (Assignment 2 Due) 6 February 6
Capital Budgeting /Midterm Review 7 February 11
Midterm Exam 1-5, 8-9 February 13
Capital Budgeting Cont’d 7 February 25
Capital Budgeting Cont’d 7 February 27
Risk, Return and Capital Markets, Portfolio Choice 10 March 4 Risk, Return and Capital Markets, Portfolio Choice 10, 11 March 6 The Capital Asset Pricing Model (CAPM)
(Assignment 3 Due)
11 March 11
Introduction to Options 20 March 13
Option Pricing 21 March 18
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Cost of Capital 12 March 20
Capital Structure (Assignment 4 Due) 14 March 25
Capital Structure Cont’d 15 March 27
Capital Structure Cont’d 16 April 1
Payout Policy 17 April 3
Market Efficiency and Long Term Financing Review (Assignment 5 Due)
13, 23, 24 April 8
Final Exam April 22
