FIN 2200 A01, A02, A03, A04 (3 CH) CORPORATION FINANCE

WINTER 2019 A01: 107 Drake, TR 8:30 am–9:45 am

A02: 107 Drake, TR 10:00 am–11:15 am A03: 103 Drake, MW 10:00 am–11:15 am

A04: 107 Drake, MW 4:00 pm–5:15 pm

CONTENTS INSTRUCTOR ..........................................................1

COURSE DESCRIPTION ...........................................1

COURSE OBJECTIVES ..............................................2

COURSE MATERIALS ..............................................2

COURSE FORMAT ...................................................2

ASSESSMENT OF LEARNING ...................................3

MISSED EXAM AND LATE SUBMISSION POLICY .....4

ATTENDANCE POLICY .............................................4

ELECTRONIC DEVICE POLICY .................................. 5

OUT-OF-CLASS COMMUNICATION ........................ 5

CLASS SCHEDULE ................................................... 6

IMPORTANT DATES ............................................... 7

INTENDED LEARNING OUTCOMES ........................ 8

ACADEMIC INTEGRITY POLICY ............................... 9

STUDENT SERVICES AND SUPPORTS ................... 11

ABOUT THE INSTRUCTOR .................................... 12

INSTRUCTOR Name: Imran Khan Office: 356 Drake Centre Email: imran.khan@umanitoba.ca Office hours: Mon/Wed 9 am-10 am, or by appointment COURSE DESCRIPTION This course is an introduction to corporate finance regarding the allocation and 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. FIN 2200 is a required course in the B.Comm. curriculum because every businessperson should have a knowledge of basic finance concepts and techniques so that they understand why and how correct financial decisions are made. In particular, evaluating corporate finance decisions involves: (i) understanding the difference between corporations and related business forms along with understanding how to use information from a firm’s

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accounting statements; (ii) learning basic tools to evaluate current investment decisions by computing the net present value of a project’s future cash flows using market interest rates that determine the appropriate discount rate for a set of cash flows; (iii) applying the basic tools to value bonds and stocks that are used by firms to raise the capital needed to make investments along with applying the basic tools to allocate the firm’s capital for investments known as capital budgeting; (iv) measuring and comparing risks across investment opportunities so investment opportunities of equivalent risk are only compared to each other; (v) managing risk using financial options and other financial contracts that allow managers to evaluate future investment decisions; and (vi) choosing the firm’s capital structure by deciding what amount of debt, equity, and other securities it will issue to raise capital from investors. COURSE OBJECTIVES 1. Help you recognize the importance of understanding corporate finance for firm success. 2. Introduce you to corporate finance concepts & techniques to make good corporate finance decisions. 3. Help you recognize the application of corporate finance concepts around us. 4. Give you hands-on experience in conducting a Bloomberg based group project. COURSE MATERIALS The below required course materials are available in the Bookstore. Corporate Finance, 4th Canadian Edition, 2019, J. Berk, P. DeMarzo, and D. Stangeland, Pearson Canada, ISBN: 9780134632285. Pearson MyLab Finance Access Code

• Included with purchase of a new textbook OR

• Purchased from MyLab Finance webpage (see UM Learn for instructions) Financial calculator

• Texas Instrument: TI-BAII Plus OR

• Hewlett Packard: HP-10BII or more advanced HP financial calculators Please respect copyright laws. Photocopying textbooks or other reading material is a violation of copyright laws and is unethical, unless permission to copy has been obtained. COURSE FORMAT To help you understand the assigned textbook chapters, the Class Lectures will (i) explain the most important corporate finance concepts and (ii) demonstrate how to use the corporate finance techniques to solve problems. To reinforce the Class Lectures, there are regular Friday Labs to (i) help you better understand the corporate finance concepts and (ii) allow you to practice the corporate finance techniques.

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To further reinforce the Class Lectures and Friday Labs, there are regular MyLab Finance Assignments to help you further practice the corporate finance techniques. ASSESSMENT OF LEARNING There will be six components to the grading:

Behavioral Finance Assignment/Research Subject Pool (See UM Learn after midterm) 2%

Friday Lab Attendance/Work/Quiz (See Class Schedule) 5%

Bloomberg Group Project (See UM Learn after midterm) 8%

MyLab Finance Assignments (See Class Schedule) 10%

Midterm Exam (2 hours, Saturday March 2, 10am-12pm, Location to be announced) 35%

Final Exam (3 hours, Date, Time, & Location to be announced) 40%

Although the following letter-grading scheme will be used, in the event of a skewed distribution of grades, the total course marks may be curved up or down as necessary (the weighting of each component will remain unchanged).

Marks Letter Grade

90 and above A+

80 – 89.99 A

75 – 79.99 B+

70 – 74.99 B

65 – 69.99 C+

60 – 64.99 C

50 – 59.99 D

Below 50 F

Behavioral Finance Assignment/Research Subject Pool: Students have the option to complete a Behavioral Finance Assignment OR participate in a Research Subject Pool for one research study during the term. The instructions should be available on UM Learn after the midterm exam and will be explained in class.

Friday Lab Attendance/Work/Quiz: Students must attend the lab section that corresponds to the course section they are registered in. During each lab, students will work individually, in small groups, and/or as whole class to solve typically one to six problems. Note the lab schedule is provided in the Class Schedule section. If a student does not attend a lab for its complete duration then the student will receive a grade of zero for that lab. Note instructions and/or questions for each lab will be available on UM Learn prior to each lab.

Bloomberg Group Project: The instructions should be available on UM Learn after the midterm exam and will be explained in class. You will form a group of four students for this project. In the event of one group member engaging in academic dishonesty such as plagiarism, the entire group will be subject to disciplinary hearings until the guilty person is identified. Therefore, it is in your best interest to confirm the group paper is ‘legit’ before it is submitted. Projects turned in late will lose 1 mark per day.

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MyLab Finance Assignments: The instructions to access MyLab Finance are available on UM Learn and will be explained in class. You must work on these assignments individually. If you need help with the assignments, talk to me. Seeking help from or collaborating with anyone else constitutes academic dishonesty. Please consult the Academic Integrity Sheet attached to this outline to see what is (un)acceptable. Assignments not completed by the due dates listed in the Class Schedule section will receive a grade of zero. Note there will be no extensions for missed and/or incomplete assignments unless permission is granted by the instructor prior to an assignment deadline.

Exams: The midterm and final exams will consist of multiple-choice and long-answer questions. The exact format of each exam will be announced sufficiently in advance. Formula sheets will not be provided for the exams. Instead, on the midterm, students are permitted to bring in one 8.5 by 11 inch sheet of paper on which they can write anything on both sides, while on the final exam, students may bring two 8.5 by 11 inch sheets of paper on which they can write anything on both sides. Formula sheets must be hand written and can not be word-processed or contain photocopied material. 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 the VW deadline date 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.

MISSED EXAM AND LATE SUBMISSION POLICY If you miss a midterm exam or any other graded component of the course for personal, medical, or Asper School approved reasons (see list of events), you must report to your instructor as soon as possible and provide written proof supporting your absence from that component or midterm exam. Missing an exam is serious. Students who miss any graded 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 the final exam 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.

ATTENDANCE POLICY Since many of the textbook chapters build on concepts and techniques from previous chapters, missing a class may have a significant impact on your ability to learn the assigned material in the textbook so regular attendance is highly advised.

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ELECTRONIC DEVICE POLICY You may use a laptop or tablet for note-taking. If you are using a laptop, please sit in the last row to avoid distracting those sitting behind you. Practice self-control—don’t browse the Internet or check your e-mail/social media messages in class. You may be interested in reading this article.

Note you are not allowed to audio/video record any lectures. OUT-OF-CLASS COMMUNICATION PowerPoint files, assignment/project guidelines, other class-related files, and grades will be posted on UM Learn. Moreover, any announcements outside of class will be posted as a News Item in UM Learn. It is your responsibility to check your UofM email account and UM Learn frequently so that you don’t miss any announcements. There are many questions that cannot be answered succinctly over email. If you email me a question, please consider whether it can be easily and effectively answered by email. If it cannot, please talk to me before or after class. If I receive a question that is difficult to answer electronically or will require a lengthy response, I will ask you to meet with me to discuss instead. REFERENCING STYLE FOR WRITTEN WORK In the group project for this course, you are expected to use the APA style of referencing for any in-text citations and any Bibliography. To learn about the APA style, please consult a librarian in the Management Library or look up http://libguides.lib.umanitoba.ca/citationmanagers/referencemanagers.

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CLASS SCHEDULE Tentative Schedule for Week of:

January 7 Lectures: Course Outline Financial Calculator Demo Ch 1: The Corporation Ch 2: Introduction to Financial Statement Analysis (Self-Study) January 14 Lectures: Ch 3: Arbitrage & Financial Decision Making Ch 3A.2 (online): Using Primitive Securities to Solve for Price

Friday Lab: Lab 1: Chapter 3 Questions MyLab Finance: Assignment 1: Ch 3 Questions (Due: 11:59 pm Jan 20)

January 21 Lectures: Ch 4: The Time Value of Money Ch 4A: Using a Financial Calculator

Friday Lab: Lab 2: Ch 4 Questions MyLab Finance: Assignment 2: Ch 4 Questions (Due: 11:59 pm Jan 27)

January 28 Lectures: Ch 5: Interest Rates

Friday Lab: Lab 3: Ch 5 Questions MyLab Finance: Assignment 3: Ch 5 Questions (Due: 11:59 pm Feb 3)

February 4 Lectures: Ch 6: Valuing Bonds Ch 6A: Forward Interest Rates Ch 24: Debt Financing (Self-Study)

Friday Lab: Lab 4: Ch 6 Questions MyLab Finance: Assignment 4: Ch 6 Questions (Due: 11:59 pm Feb 10)

February 11 Lectures: Ch 7: Valuing Stocks Ch 8: Investment Decision Rules

Friday Lab: Lab 5: Ch 7 & 8 Questions MyLab Finance: Assignment 5: Ch 7 & 8 Questions (Due: 11:59 pm Feb 17)

February 18 Lectures: No Classes

Friday Lab: No Labs MyLab Finance: Assignment 6: Ch 1, 2, 24 Questions (Due: 11:59 pm Feb 24)

February 25 Lectures: Ch 9: Fundamentals of Capital Budgeting (Omit 9.5)

Friday Lab: Lab 6: Ch 9 Questions MyLab Finance: Assignment 7: Ch 9 Questions (Due: 11:59 pm March 3) Midterm Exam: Saturday March 2, 10 am-12 pm, Location TBA (Ch: 1 to 9 & 24)

March 4 Lectures: Ch 10: Capital Markets and the Pricing of Risk

Friday Lab: Lab 7: Ch 10 Questions Bloomberg Tutorial Session (Time & Location: TBA) MyLab Finance: Assignment 8: Ch 10 Questions (Due: 11:59 pm March 10)

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March 11 Lectures: Ch 11: Optimal Portfolio Choice & CAPM (Omit: 11.6) Ch 12: Estimating Cost of Capital (Omit: 12.5, 12.6, only WACC from 12.7)

Friday Lab: Lab 8: Ch 11 & 12 Questions MyLab Finance: Assignment 9: Ch 11 & 12 Questions (Due: 11:59 pm March 17)

March 18 Lectures: Ch 14: Financial Options (Omit: “Returns for holding an option to expiration” from 14.2) (Omit: 14.5)

Friday Lab: Lab 9: Ch 14 Questions MyLab Finance: Assignment 10: Ch 14 Questions (Due: 11:59 pm March 24)

March 25 Lectures: Ch 17: Capital Structure in a Perfect Market

Friday Lab: Lab 10: Ch 17 Questions MyLab Finance: Assignment 11: Ch 17 Questions (Due: 11:59 pm March 31)

April 1 Lectures: Ch 18: Debt & Taxes Ch 19: Financial Distress, Managerial Incentives, & …

Friday Lab: Lab 11: Ch 18 & 19 Questions MyLab Finance: Assignment 12: Ch 18 & 19 Questions (Due: 11:59 pm April 7)

April 8 Lectures: Ch 30: Risk Management (Omit: 30.3-30.4)

MyLab Finance: Assignment 13: Ch 30 Questions (Due: 11:59 pm April 10) Group Project: Due at beginning of class via Hardcopy & UM Learn Dropbox

April 11-26 Final Exam: Date, Time, & Location: TBA (Ch: cumulative)

IMPORTANT DATES

Midterm Exam - Saturday, March 2

Bloomberg Tutorial Sessions - Friday, March 8

VW deadline - Wednesday, March 20

Group Project Due - Monday, April 8 (A03 & A04) Tuesday, April 9 (A01 & A02)

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INTENDED LEARNING OUTCOMES

AACSB Assurance of Learning Goals and Objectives 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 Objectives 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.

✓ Entire course

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

✓ Entire course

C. Analyze quantitative output and arrive at a conclusion.

✓ Entire course

2 Written Communication

A. Use correct English grammar and mechanics in their written work.

✓ Bloomberg Project,

Labs, & Exams

B. Communicate in a coherent and logical manner ✓

Bloomberg Project, Labs, & Exams

C. Present ideas in a clear and organized fashion. ✓

Bloomberg Project, Labs, & Exams

3 Ethical Thinking

A. Identify ethical issues in a problem or case situation

B. Identify the stakeholders in the situation. ✓ Chapter 1

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

✓ Chapter 1

D. Discuss the ethical implications of the decision. ✓ Chapter 1

4 Core Business Knowledge ✓ Entire course

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ACADEMIC INTEGRITY POLICY It is critical to the reputation of the Asper School of Business and of our degrees that everyone associated with our faculty behave 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 (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 test 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 Asper School of Business require group projects. Students should be aware that group projects are subject to the same rules regarding academic integrity. All group members should exercise special care to ensure that the group project does not violate the policy on Academic Integrity. Should a violation occur, group members are jointly accountable unless the violation can be attributed to specific individuals. Some courses, while not requiring group projects, encourage students to work together in groups before submitting individual assignments. If it’s unclear whether it is allowed, students are encouraged to seek clarification from the instructor to avoid violating the academic integrity policy. In the Asper School of Business, all suspected cases of academic dishonesty in undergraduate courses are reported to the Dean's office and follow the approved disciplinary process. See following table for typical penalties for academic dishonesty in the Asper School.

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Typical Penalties for Academic Dishonesty in the Asper School

If the student is from another Faculty and the academic dishonesty is committed in an Asper course, the student’s Faculty could match or add penalties beyond the Asper School’s. F-DISC on transcript indicates the F is for disciplinary reasons.

ACADEMIC DISHONESTY PENALTY

Cheating on exam (copying from or providing answers to another student)

F-DISC in course Suspension from taking Asper courses for 1 year Notation of academic dishonesty in transcript

Sharing exam questions electronically during exam

F-DISC in course Suspension from taking Asper courses for 2 years Notation of academic dishonesty in transcript

Possession of unauthorized material during exam (e.g., cheat notes)

F-DISC in course Suspension from taking Asper courses for 1 year Notation of academic dishonesty in transcript

Altering answer on returned exam and asking for re-grading

F-DISC in course Suspension from taking Asper courses for 1 year Notation of academic dishonesty in transcript

Plagiarism on assignment F-DISC in course Suspension from taking Asper courses for 1 year Notation of academic dishonesty in transcript

Submitting paper bought online F-DISC in course Suspension from taking Asper courses for 1 year Notation of academic dishonesty in transcript

Inappropriate Collaboration (collaborating with individuals not explicitly authorized by instructor)

F-DISC in course Suspension from taking Asper courses for 1 year Notation of academic dishonesty in transcript

Group member had knowledge of inappropriate collaboration or plagiarism and played along

F-DISC in course Notation of academic dishonesty in transcript

Signing Attendance Sheet for classmate

F-DISC in course Notation of academic dishonesty in transcript

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STUDENT SERVICES AND SUPPORTS The University of Manitoba provides many different services that can enhance learning and provide support for a variety of academic and personal concerns. You are encouraged to visit the below websites to learn more about these services and supports. If you have any questions or concerns, please do not hesitate to contact your instructor or the Undergraduate Program Office.

For Information on… …follow this link

Admission, Registration, Tuition Fees, Important Dates, Final Exams, Graduation, and Transcripts

Registrar’s Office

Academic policies & procedures, regulations, Faculty-specific information, degree and major requirements

Academic Calendar

Help with research needs such as books, journals, sources of data, how to cite, and writing

Library Resources

Tutors, workshops, and resources to help you improve your learning, writing, time management, and test-taking skills

Writing and Learning Support

Support and advocacy for students with disabilities to help them in their academic work and progress

Student Accessibility Services

Copyright-related questions and resources to help you avoid plagiarism or intellectual property violations

Copyright Office

Student discipline bylaws, policies and procedures on academic integrity and misconduct, appeal procedures

Academic Integrity

Policies & procedures with respect to student discipline or misconduct, including academic integrity violations

Student Discipline

Students’ rights & responsibilities, policies & procedures, and support services for academic or discipline concerns

Student Advocacy

Your rights and responsibilities as a student, in both academic and non-academic contexts

Your rights and responsibilities

Full range of medical services for any physical or mental health issues

University Health Service

Information on health topics, including physical/mental health, alcohol/substance use harms, and sexual assault

Health and Wellness

Any aspect of mental health, including anxiety, stress, depression, help with relationships or other life concerns, crisis services, and counselling.

Student Counselling Centre

Support services available for help regarding any aspect of student and campus life, especially safety issues

Student Support Case Management

Resources available on campus, for environmental, mental, physical, socio-cultural, and spiritual well-being

Live Well @ UofM

Help with any concerns of harassment, discrimination, or sexual assault

Respectful Work and Learning Environment

Concerns involving violence or threats, protocols for reporting, and how the university addresses them

Violent or Threatening Behaviour

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ABOUT THE INSTRUCTOR Imran is a Sessional Instructor in the Departments of Accounting & Finance, Supply Chain Management, and Business Administration. He has a BSc, MSc, MBA, and PhD degrees with expertise in applying engineering techniques (e.g. agent-based modelling and simulation, queueing theory, artificial neural networks, and fuzzy logic) to solve management problems. Imran has over 15 years of management-engineering cross-disciplinary business experience as Business Analyst, Project Manager, Investments Manager, Business Consultant, and Business Incubation Manager. Additionally, Imran has over 15 years of Sessional Instructor teaching experience in a variety of areas, including: Business Strategy, Production & Operations Management, Corporate Finance, and Management Information Systems.