Finance 374c Syllabus

Finance 374c
Corporate Finance
Spring 1997
unique number: 02525


Instructor : Dr. Richard MacMinn

I'd like to get your comments about the course during the semester. Please make constructive comments and suggestions at the bottom of this page. I also want your comments on the group presentations that are explained here. Use the name and password assigned to you in class to access your comment forms. These comments will be provided to each group so that they can evaluate their performance. These comments will also be part of your participation score in the course.

Teaching Assistant: Durga Dattatraya


Text: Aswath Damodaran, Corporate Finance: Theory and Practise

The text represents a core of knowledge that is expected and on which we will build. Lecture notes and other material will be made available in class.


Course Description and Objectives

This is the second undergraduate course in corporate finance. The course stresses the theoretical foundations of corporate finance. In addition to the standard fare of capital budgeting and capital structure this course includes topics such as the market for corporate control and the use of derivatives in managing corporate risk.

The course provides a selective survey of that body of knowledge we call corporate finance. This will be done, in part, by the construction and use of a financial model that allows for the statement, proof and generalization of some of the classic theorems in corporate finance. The model is also constructed because it provides a means of applying, analyzing and synthesizing new ideas in a framework that is consistent with received theory. You will be expected to be able to:


  1. State and Discuss the Classic Theorems
  2. Explain the Ramifications of the Theorems for Corporate Decision Making
  3. Analyze and Evaluate Alternative Decisions using the Financial Model

The course is also designed to provide you with the opportunity, in both an individual and group setting, to demonstrate a progression in your ability from knowledge to analysis to evaluation.

Finally, the course is designed to provide you will some computer and network literacy skills that will facilitate your individual and group communication and research. I will use this web page to provide some of the lecture notes and information for this course and we will use an e-mail client such as eudora to a limited extent to communicate with one another outside of class. You will be expected to become proficient in using:

  1. E-mail
  2. Web Browser

Organizational Matters

This will not be a conventional course. We will explore the use of lotus notes in organizing our communication and our group work. A database will be constructed for lecture notes and other class material; another will be constructed for discussion purposes and another will be constructed for tracking group work.

While we're getting groups selected and organized, I'll be lecturing on corporate finance theory; I'll be providing some of the lecture notes in Adobe's portable document format. This technology allows material to be provided in a relatively platform free environment. The following lecture material requires a free adobe acrobat reader. There is a reader for the Macintosh, Windows, DOS and Unix. The free adobe acrobat software is here. Adobe provides information here to configure most of the client applications to use the free acrobat readers.

During the first several weeks of class, I'll provide lectures and notes on the following topics:

The ideas and results covered in these lectures will form the basis for the remaining work that we do in the course.

During the first several weeks, I'd also like to accomplish the following work:

We will begin forming groups and outlining work for the groups after you have completed your homepages and we have discussed possible topics in the class newsgroup.

Once the groups have been formed, the remainder of the course will be devoted to lectures on selected topics, group meetings, and group presentations. Some of the group meetings will be held in class.

The organization of this course is subject to change. I'm looking for your input on organizational matters. I'd like to introduce some added flexibility into the design of the course that will allow us to pursue topics and projects we may learn about during the course of our discussion and research.


Group Projects

The small groups that are formed will be expected to review the literature on its topic area, identify the question(s) or issue(s) to be researched and organize the group effort for two presentations with the following requirements:

Presentation One
  • Provide and Overview of the Topic Area
  • Identify the issue(s) to be addressed
  • Explain What the Theory Suggests about the Resolution of the Issue(s)
  • Explain the Methodology to be used in Further Investigation
  • The first presentation may be motivated with an article out of some publication such as the Wall Street Journal. If this is the case then provide the other class members with a copy of that article at least one class day prior to the presentation. In preparing for the first presentation, you need to strive for an appropriate balance between the popular literature and the theoretical and empirical results in the academic literature. Although no analysis is required in the first presentation, you are expected to use the financial model presented in the lectures as a framework for the presentation.

    Links to the first group presentations from the Spring of 1997 are here:

    Links to the first group presentations from the Spring of 1996 are here in PowerPoint format:

    Presentation Two
  • Analyze the Issue(s) using Financial Theory
  • Analyze the issue(s) using the Appropriate Data
  • Summarize and Evaluate the Results of the Investigation

  • In preparing for the second presentation you need to strike a balance between the theoretical and empirical sides of your investigation. Some use of the analytic tools developed in the lectures is expected. If your issue requires you to look at corporate or market data or manipulate that data then you must document your sources and, where appropriate, how you manipulated the data. Be prepared to present data in tabular and chart form.

    The Lexis/Nexis database is available for your use as is the EDGAR database. Other databases such as Uncover, ABI Inform, etc. are available through UTCAT Plus. You'll find a variety of other financial links on my KiwiClub web page.

    Each group must schedule at least one meeting with me prior to each presentation. Each group will be given thirty minutes for a presentation. The first twenty minutes will be for the presentation and the last ten minutes will be for questions. The criteria I use for evaluating presentations will be made available at least a week prior to the first presentation. You will also be asked to evaluate the performance of the group.

    The first presentation may be motivated with an article out of some publication such as the Wall Street Journal. If this is the case then provide the other class members with a copy of that article at least one class day prior to the presentation. In preparing for the first presentation, you need to strive for an appropriate balance between the popular literature and the theoretical and empirical results in the academic literature. Although no analysis is required in the first presentation, you are expected to use the financial model presented in the lectures as a framework for the presentation.

    Links to the second group presentations from the Spring of 1997 are here:

    Individual Papers

    You will be responsible for three papers on one topic. The topic may be the same as your group's topic. The requirements for the first two papers are the same as those of the two presentations. Excluding tables, figures and references, the first paper should be no longer than three pages. If you use tables or figures, include them in the body of the text. You will receive comments on the first paper that you should respond to in the second paper. The second paper should be no longer than seven pages; this includes the revision of the first paper. You will receive comments on the second paper that you should respond to in the third paper. The third paper should be no longer than ten pages and incorporate the first two papers with the appropriate responses to comments. Each paper will be judged on the quality of the content, the clarity with which it is presented, and the extent to which it demonstrates an ability to assimilate and apply the theory presented in this course.

    Grades

    Course grades will be determined, without a curve, using the cumulative course scores. The cumulative course score will be determined according to the following formula: Course score = (.2) C + (.5) G + (.3) P, where C, G, and P represent the class participation, group projects, and individual paper and test scores, respectively. The individual score may include a final exam score.


    Comments on the Course:

    If you would like to comment on this presentation then please leave your name, e-mail address, and comments in the space provided here. Your comments will be automatically e-mailed to me.

    Name:

    E-Mail Address:

    Subject:

    Comments:



    [http://journalofriskandinsurance.org/macminn/kiwi signature.htm]