ECON 4410.03N W16, Course Outline, Karagyozova

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York University
Faculty of Liberal Arts & Professional Studies
Department of Economics
Winter 2016
Course # and Title: AP/ECON 4410 3.0 N: Corporate Finance
Course Webpage: http://moodle.yorku.ca
Course Instructor:
Name:
Office:
Phone:
Office Hours:
Email:
Tsvetanka Karagyozova
1082 Vari Hall
416-736-2100 Ext. 77028
Tuesdays, 3:00 – 5:00 p.m.
[email protected]
Lecture Time and Location: T 7:00 – 10:00 p.m., FC 203
Teaching Assistant: TBA
Prerequisite / Co-requisite:
Prerequisites: AP/ECON 2300 3.00, AP/ECON 2350 3.00 and AP/ECON 4400 3.00, or
equivalents.
Course credit exclusions: AP/ADMS 4540 3.00, GL/ECON 4315 3.00, SB/FINE 3100 3.00.
Note: Acceptable course substitutes are available in the Calendar.
PRIOR TO FALL 2009: Course credit exclusions: AK/ADMS 4540 3.00, AS/ECON 4410
3.00, GL/ECON 4315 3.00, SB/FINE 3100 3.00.
Course Description: ECON 4410 is a continuation of ECON 4400. While ECON 4400 focuses on
the decision-making of investors, ECON 4410 focuses on the decision-making of firms. In
Corporate Finance we will address three major questions: (1) In what projects should the firm
invest? (2) What sources of financial capital can the firm use for its investment activities? (3) How
can the firm ensure sufficient short-term liquidity for its operations? Topics include net present
value, capital budgeting, efficiency of capital markets, treatment of risk, dividend policy, short-term
financing, and financial strategy.
Weighting of Course and Evaluation: All the elements that comprise your final grade
complement each other and are designed to reinforce the concepts taught in the course.
1. Group projects (15 % of grade). There will be 3 group projects, but only the two best will count
towards your final grade. You will work in groups of 4-5 people. Detailed instructions on each
assignment will be provided in class. Concise written reports (up to 3 pages) on your project will be
due on announced dates (see Tentative Course Topics below). Please note that the announced
deadlines are firm. Late assignments will be penalized by a 10% reduction of the grade for every
day of delay.
By taking this course, you agree that all group reports will be subject to submission for textual
similarity review to Turnitin via Moodle for the detection of plagiarism.
2. A midterm exam (40 % of grade). The midterm will be held on February 11th during class time.
3. A comprehensive final exam (45 % of grade). The final exam date, time and location will be
set by the Registrar’s Office during the final examination period, April 6 – April 20. The midterm
and the final are both closed book exams. Upward trends in performance will receive
consideration, as will exceptionally strong performance on the final exam.
The course grade will be determined by the following rule:
Course Grade= Max{(40% Midterm + 15% Projects + 45% Final),
(15% Projects + 85% Final)}
Concerns about apparent grading errors will be considered during the term, but requests
for “extra credit” or other special considerations in assigning grades will be ignored.
While homework problem sets will not be graded, you are encouraged to work on the assigned
problems to reinforce the course material and prepare for exams.
Missed exams: There will be no make-up midterm exam for any reason. If you miss the midterm,
you will receive a grade of zero unless you have a documented reason. You must, 1) e-mail me as
soon as possible; 2) have a valid reason (e.g. medical emergency); and 3) provide me with the
appropriate documentation verifying the circumstances for the missed midterm exam within 2
weeks of the exam date (e.g. completed Attending Physician’s Statement form).
If you miss the midterm and you have a documented reason, your final exam will carry the extra
weight (85 % instead of 45 %).
For students who miss the final, the Department of Economics Guidelines on Deferred Standing
apply (http://dept.econ.yorku.ca/undergraduate/Deferred_Standing1.pdf). In such cases, students
should submit a completed Deferred Standing Agreement form together with the supporting
documents to the Economics Department to my attention. The date and time of the deferred exam
will be set at a later date. Students who may require further extensions will have to submit a formal
petition to the Faculty.
Grading: Conforms to the grading system used in undergraduate programs at York:
From Percentage
90-100
80-89
75-79
70-74
65-69
60-64
55-59
50-54
40-49
0-39
To Letter Grade
A+
A
B+
B
C+
C
D+
D
E
F
Grade Point
9
8
7
6
5
4
3
2
1
0
2
Required Text:
Ross, Stephen A., Randolph W. Westerfield, Jeffrey F. Jaffe, and Gordon S. Roberts, Corporate
Finance, 7th Canadian Edition, McGraw-Hill Ryerson, 2015. ISBN -10: 0-07-133957-4.
For those on a tight budget, second-hand copies of the 6th Canadian edition as well as the U.S.
edition of the text are widely available.
Optional:
Financial Post, Wall Street Journal, Financial Times, Economist, and any other business news
magazine or newspaper.
Tentative Course Topics:
Although lecture notes will be provided on Moodle, they are not meant to be a comprehensive
treatment of the material or a substitute for the textbook. You are responsible to make up for
the material covered in class if you miss a lecture.
Week
Week 1
Week 2
Week 3
Week 4
Week 5
Week 6
Week 7
Week 8
Week 9
Week 10
Week 11
Week 12
Topic
Ch. 7 Net Present Value and Other Investment Rules
Ch. 8 Net Present Value and Capital Budgeting
Ch. 9 Risk Analysis, Real Options, and Capital Budgeting
Ch. 11 Risk and Return: The Capital Asset Pricing Model
Ch. 12 The Arbitrage Pricing Theory
Ch. 13 Risk, Return and Capital Budgeting
Ch. 14: Corporate Financing Decisions and Efficient Capital Markets
Ch. 15: Long-Term Financing: An Introduction
Group project 1 due (Feb. 4)
Midterm exam – Feb. 11th
Ch. 16: Capital Structure: Basic Concepts
Ch. 17: Capital Structure: Limits to the Use of Debt
Ch. 19: Dividends and Other Payouts
Ch. 20: Issuing Equity Securities to the Public
Ch. 21: Long-Term Debt
Group project 2 due (March 10)
Ch. 23: Options and Corporate Finance: Basic Concepts
Group project 3 due (March 24)
Ch. 24: Options and Corporate Finance: Extensions and Applications
Additional Information:
Course announcements: Please make it a habit of checking Moodle for current course
announcements, lecture handouts, practice questions, and assigned readings.
E-mails: Please use your York email account for correspondence.
Observance Dates: Students for whom the midterm exam coincides with a religious
observance must let me know within the first two weeks of classes. If there is such a conflict with
respect to the final exam, students must complete a Religious Accommodation Agreement no later
than three weeks prior to the start of the examination period.
Academic Honesty: I take academic integrity seriously. Copying, plagiarizing, or other
forms of academic misconduct will not be tolerated. Any student caught engaging or assisting in
such activities will be subject to academic discipline as outlined in the Senate Policy on Academic
Honesty available at http://www.yorku.ca/secretariat/policies/document.php?document=69.
3
Important Course Information for Students:
All students are expected to familiarize themselves with the following information, available on the
Senate Committee on Curriculum & Academic Standards webpage;
http://www.yorku.ca/secretariat/policies/index-policies.html/
• York’s Academic Honesty Policy and Procedures/Academic Integrity Website
• Course requirement accommodation for students with disabilities, including physical, medical,
systemic, learning and psychiatric disabilities
• Student Conduct Standards
• Religious Observance Accommodation
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