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This course builds upon concepts taught in the Corporate Finance Course, takes them at a more advanced level and focuses on a more complex and multi-dimensional application with real life companies.
The course aims to tackle real-life business decision making problems from a critical perspective by showing where theory works and where it struggles. A further effort will be made to accustom students with how companies’ decision making may be impacted by its surrounding environment (society, culture, financial markets and government)
The best way to learn corporate finance is by applying its models and theories to realworld problems. Although the theory that has been developed over the past few decades is impressive, the ultimate test of any theory is application. Much (if not all) of the theory can be applied to real companies and not just to abstract examples, though we have to compromise and make assumptions in the process.
At the end of each lesson but the last, students will be presented with a simple problem which they will solve individually or in groups.
At the end of the course students will have the main tools to put a fair value to both the stock price and the firm as a whole by assessing both the return and risk profile of a company. Additionally, they will be able to critically assess the pricing of companies outside the stock market.
Through the project and assignments students will familiarize with working on Excel.
Applied Corporate Finance: A User’s Manual, 3rd (or 2nd) Edition, by Aswath Damodaran
The textbook web site has valuable online supplemental materials to support. Students’ learning.Web page: www.damodaran.com
Required Additional Materials:
Brealey, Richard A., Stewart C. Myers, and Franklin Allen. Principles of Corporate Finance. New York: McGraw-Hill Irwin
A few additional readings may occasionally be required from hand-outs. Each lesson may contain outside material such as academic papers and case studies depending on student’s active participation and learning focus. These will be provided as print-out or as a website link.
You may access: Companies Financial Database of Public Traded Companies listed with SEC Security and Exchange Commission: http://sec.gov/edgar/searchedgar/webusers.htm. Use http://finance.yahoo.com/ to obtain stock market data and supplementary data on companies’ governance.
Lectures are held indicatively on each Monday from 5pm to 8pm. The lecture date may change depending on class availability and other emergency situations. The day by day schedule of lectures is indicative and may change.
|12 October 2015||Introduction|
|20 October 2015||Objective function|
|26 October 2015||The investment principle|
|02 November 2015||The investment principle|
|09 November 2015||The investment principle|
|16 November 2015||Review|
|23 November 2015||Mid-term exam|
|01 December 2015||The financing principle|
|07 December 2015||The financing principle|
|21 December 2015||The dividend principle|
|11 January 2016||The dividend principle|
|18 January 2016||Linking financial decisions to value|
|25 January 2016||Project discussion|
|01 February 2016||Project discussion & review|
|08 February 2016||Final Exam|
This course is built on the conviction that students build knowledge and skills by associating new materials with knowledge and experiences acquired before or concurrently to the learning activities. This requires active learning, vigorous discussions and active participation on the part of the students. While the instruction will include lectures where core concepts, important theories, and practical application will be explained, it is the continuous and consistent exercising of students, both in class with individual or group assignments and through weekly written homework, that guarantees the proper functioning of the course.
The total course score will be weighted as follows: Attendance and participation (10 per cent), project work (25 per cent), mid-term examinations (30 per cent) during the course, and final examination (35 per cent). The examinations, including the final one will be cumulative, covering all the topics discussed until that date.
Participation extends beyond mere attendance. Expect your instructor to keep track of how often you contribute to class discussion (as a whole). Attendance is compulsory as per the University rules. You may miss up to three classes without penalty – your first two absences count whether you have a good excuse or not. Each absence beyond the first three will cost you points off of your participation grade. The only exceptions to this rule are severe illness (doctor’s note required) and UNYT approved trips/activities. Appropriate documentation for absences beyond the first three is necessary the class day directly before or after the one you miss. In general: this class is intensive and interactive. Missing class could seriously affect your grade. Students are reminded not to approach the instructor for copies of the previous week’s materials immediately before, during, or immediately after class. Students are expected to collect materials from their classmates.
Active participation is strongly encouraged. For more fruitful and to-the-point discussions students are advised to come to classes having read the relevant chapters.
Students are expected to be familiar with math concepts and calculations. Students must always keep with them a calculator.Use of a financial calculator is suggested. Having a laptop in the class is suggested but not obligatory.
The students will be joined in groups of around 5 and should select a company – preferably a large listed American company, for which data can be easily available. The numbers should be worked during the study of the course. Text of corporate finance analysis can be filled by the end of the course. If you refer to the course slides, where you see “Application Test:” it means that you should apply the requirement to your company – following the worked example. The project will be submitted at the end of the course both in written and soft form. A power point should be prepared and presented in the class. You should be able to explain your work in detail during the presentation in the class, otherwise very few points will be awarded.
Two examinations will be taken, one during the course and a final exam covering all course content during the final examination period. Test format may combine a mixture of essay questions covering all readings, lecture, hand-out and class discussion content, as well as exercises that require calculations and elaboration.
Punctuality, appropriate dress code, and considerate behavior in class are required of all students. In the event of illness or emergency, contact your instructor IN ADVANCE to determine whether special arrangements are possible. The University’s rules on academic dishonesty (e.g. cheating, plagiarism, submitting false information) will be strictly enforced. Please familiarize yourself with the STUDENT HONOUR CODE, or ask your instructor for clarification.
If you feel that you have encountered special learning difficulties or serious problems that interfere with your studies, please make an appointment with UNYT Counseling Center, Dr. E Cenko (firstname.lastname@example.org) and/or the Academic Support Center, Dr. A Canollari (email@example.com). For more information, please contact me and or your academic advisor.
|Attendance, participation and preparation||10%|
|Mid Term Exam||30%|
|Letter Grade||Percent (%)||Generally Accepted Meaning|
|B+||87-89||Good work, distinctly above average|
|D+||67-69||Work that is significantly below average|
|F||0-59||Work that does not meet minimum standards for passing the course|
Students should be familiar with Excel and Powerpoint. Continuing and regular use of e-mail is expected. Students must keep copies of all assignments and projects sent by e-mail. Students must always keep with them a calculator. Use of a financial calculator is suggested. Having a laptop in the class is suggested but not obligatory.
October, 2015.Erjon Satko