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UNIVERSITY OF MANITOBA I.H. ASPER SCHOOL OF BUSINESS DEPARTMENT OF ACCOUNTING AND FINANCE FIN 2200 - CORPORATION FINANCE (3 credit hours) Winter 2018: A03: M/W 10 a.m. - 11.30 a.m. A04: M/W 11:30 a.m.-12:45 p.m. Instructor: Alok Dua Office: 376 Drake Centre E-mail: dua@umanitoba.ca Office Hours: M/W 4 - 5 p.m. 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, 2015.

2. You can use the following calculators in this course:

• Texas Instrument: TI-BAII Plus. • Hewlett Packard calculators: HP-10B, HP-10BII, HP-12C or more advanced HP financial

calculators. I will explain how to use only the HP-10BII calculator and will use it for examples in class.

MY LAB FINANCE

MyLab Finance 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 MyLab Finance. You will need a code to access MyLab Finance assignments. There are two ways to acquire an access code:

1. A code is included with the purchase of a new textbook. New textbooks may be purchased from the Book Store.

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2. Students not wishing to use a new hardcopy of the textbook may instead purchase a MyLab Finance code separately on the internet from MyLab Finance web page (see below).

Course Name: FIN 2200 Winter 2018 - A03 (or A04)

Course ID: A03 - dua53036A04 - dua12623

How to Register and Enroll in Your MyLab Finance 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: A03 - dua53036; A04 - dua12623 and click Continue. 4. Sign in with an existing Pearson account or create an account:

• If you have used a Pearson website (for example, MyLab IT, Mastering, MyLab Math, or MyLab Psych), 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@fin2200w18, where UMNetID is the id you use to log into Jump and UM Learn. For example, if a student’s UMNetID is umsmithj, he/she should set his/her MFL id to umsmithj@fin2200w18

• 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.

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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 Winter 2018 - A01 or A02 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 Winter 2018 - A03 or A04 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 UM Learn regularly.

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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% Behavioral Finance Assignment/Research Subject Pool

Details on UMLearn and provided later in the term 2%

Lab Quizzes Quizzes will be given every lab by the lab instructor 5% Bloomberg Project Details will be provided after the midterm, follow in-class and

UM Learn announcements 8%

Midterm Exam Location and time TBA 35% Final Exam Location and time TBA 40%

COURSE MATERIALS Most supplemental material to the course (lecture notes, text book solutions, old exams, etc.) will be available on the course’s UM Learn site. Students are responsible for checking UM Learn and downloading the relevant material before each class. Follow the instructions below to log on to UM Learn:

1. Go to https://universityofmanitoba.desire2learn.com/ 2. Log into UM Learn using your UMnetID (formerly called your ccu account) account. You must

have previously claimed your UMnetID account in order to log into UM Learn. 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 “UM Learn” page, click on the FIN 2200 course title. For more information on how to use UM Learn read Student UM Learn Help Files when you are logged into UM Learn.

MyLab Finance Homework Assignments (tentative availability dates shown below) Assignments will be available throughout the term. You can access them through the MyLab Finance (MLF) 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 UM Learn 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).

Assignment Date Available 12:00 am

Date Due 11:59 pm

Material Covered

1 Jan 4 Jan 14 Chapters 1, 2, 3 2 Jan 15 Jan 21 Chapters 4 3 Jan 22 Jan 28 Chapters 5 4 Jan 29 Feb 11 Chapters 6, 7, 24 5 Feb 12 Feb 25 Chapters 8, 9 6 Feb 26 Mar 11 Chapter 10, 11 7 Mar 12 Mar 18 Chapters 12, 14

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8 Mar 19 Apr 8 Chapter 17, 18, 19, 30.1, 30.2 Labs: Corporate Finance Labs will be held on Fridays. Labs begin on Friday, January 12th. 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. Lab instructors will administer a quiz during each lab. These quizzes will be worth a total of 5% of your total grade. 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 in advance and to show up for labs regularly. Tentative lab schedule is given below:

Lab Date Material Tested Lab #1 Jan 12 Chapter 1,2,3 Lab #2 Jan 19 Chapter 4 Lab #3 Jan 26 Chapter 5 Lab #4 Feb 2 Chapter 6 Lab #5 Feb 9 Chapters 7, 8 Lab #6 Feb 16 Chapter 9 Bloomberg Lab Mar 2 Lab #7 Mar 2 Chapter 10/11 Lab #8 Mar 9 Chapter 11/12 Lab #9 Mar 16 Chapter 14 Lab #10 Mar 23 Chapter 17/18/19 Lab #11 Apr 6 Chapter 30.1-30.2

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 15, (inclusive) to ask your instructor to review your concerns and make necessary corrections if any. After this date we will no longer make any corrections to your midterm mark. General Academic Regulations on Missed Exams

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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 (valid medical documentation is necessary). 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 the Undergraduate Office of the student’s home faculty/school, as appropriate, can arrange a deferred examination for you. The governing documents regarding Final Exams and Final Grades can be found here: http://umanitoba.ca/admin/governance/governing_documents/academic/1299.html 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.

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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 Jan 3 (1 day) Course outline (read it thoroughly!).

Chapter 1: The Corporation. Chapter 2: Introduction to Financial Statement Analysis. (Study Chapter 2 on your own to refresh the material from the prerequisite accounting course, ACC 1100.)

1, 2 (self-study)

Jan 8,10 (2 days) Arbitrage and Financial Decision Making 3, 3A.2(online appendix) Jan 15,17,22,24 (4 days) Time Value of Money, Interest Rates 4, 4A, 5 Jan 29,31, Feb 5 (3 days) Valuation of Bonds and Stocks 6, 6A, 24 (self-study), 7 Feb 7, 12, 14 (3 days) Capital Budgeting 8, 9 (omit 9.5) TBA Midterm

(Location: TBA) 1, 2, 3, 4, 4A, 5, 6, 6A, 7, 8, 9, 24

Feb 26, 28, Mar 5 (3 days)

Risk, Return, and Portfolio Theory 10, 11 (omit 11.6)

Mar 7, 12 (2day) Capital Asset Pricing Model (CAPM) 12 (omit 12.5-12.6, only WACC from 12.7)

Mar 14,19 (2 days) Derivatives 14 (omit ‘Returns for holding an option to expiration’ from 14.2, omit 14.5)

Friday, Mar 16 Last date for voluntary withdrawal Mar 21,26,28 (3 days) Capital Structure 17, 18, 19 Apr 2,4 (2 days) Risk Management 30.1-30.2 TBA Final Exam: 3 hours Cumulative AACSB ASSURANCE OF LEARNING GOALS AND OBJECTIVES:

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The Asper School of Business is proudly accredited by AACSB. Accreditation requires a process of continuous improvement of the School and our students. Part of “student improvement” is ensuring that students graduate with the knowledge and skills they need to succeed in their careers. To do so, the Asper School has set the learning goals and objectives listed below for the Undergraduate Program. The checked goal(s) and objective(s) will be addressed in this course and done so by means of the items listed next to the checkmark.

Goals and Objective in the Undergraduate Program

Goals and Objectives

Addressed in this Course

Course Item(s) Relevant to these Goals

and Objectives

1 Quantitative Reasoning A. Determine which quantitative analysis

technique is appropriate for solving a specific problem.

ü Quantitative analysis throughout entire course

B. Use the appropriate quantitative method in a technically correct way to solve a business problem.

ü Quantitative analysis throughout entire course

C. Analyze quantitative output and arrive at a conclusion.

ü Interpretation of results of quantitative analysis

2 Written Communication A. Use correct English grammar and mechanics

in their written work. ü Bloomberg Project, Lab

Quizzes, and Exams B. Communicate in a coherent and logical

manner ü Bloomberg Project, Lab

Quizzes, and Exams C. Present ideas in a clear and organized

fashion. ü Bloomberg Project, Lab

Quizzes, and Exams 3 Ethical Thinking A. Identify ethical issues in a problem or case

situation

B. Identify the stakeholders in the situation. ü Chapter 1: Principal Agent problem, shareholder wealth maximization, stakeholder satisfaction.

C. Analyze the consequences of alternatives from an ethical standpoint.

ü Chapter 1: Principal Agent problem, shareholder wealth maximization, stakeholder satisfaction.

D. Discuss the ethical implications of the decision.

ü Chapter 1: Principal Agent problem, shareholder wealth maximization, stakeholder satisfaction.

4 Core Business Knowledge ü Entire course

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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.