FIN 502 Syllabus

Instructor: Carmen Stefanesu

Email: carmens@ualberta.ca
Office: 1-23A
Office Hours: M 1:00-2:30PM
T 4:30-6:00PM
Fall 2015 And by appointment

Objective: This course is intended to provide a framework for analyzing the major types of financial decisions made by
corporations. The lectures, readings, and assignments will provide an introduction to discounted cash flow techniques,
financial asset valuation, capital budgeting and option valuation problems.

Text: Corporate Finance, 3nd Canadian Edition by Berk, DeMarzo and Stangeland, 2014, Pearson Canada.

Office Hours: See above. You can also ask questions via e-mail, or on the Ulearn Discussion Board.

Grading: Course grades will be determined by combining points earned for participation, assignments, a midterm and a
final examination. The weights given to the assignments and exams are:

% of total grade
Participation 10%
Assignments (5) 20%
Midterm 30%
Final 40%
Total 100%

Each topic will have a set of assigned problems, which will be graded. I require one submission from each group.
Assignments will be posted to the course website at least two weeks prior to the deadlines (see the schedule below for
deadlines). Please solve these and submit them before class on the deadline date. Hard copies are preferred. Electronic
submissions may be acceptable but must be properly formatted for printing (especially Excel spreadsheets). Late
submissions will not be marked and awarded zero. While each student does not have to hand in a solution, each student
has an interest in knowing how to do the problems.

If you miss the midterm or the final, I require notification of the reason you missed the exam as soon as possible. If you
missed the exam due to incapacitating illness, or if you have official documentation to support your request for excused
absence (court documents, police report etc.), the weight of the midterm will be applied to your final exam. If you miss an
examination due to unacceptable reasons (vacations, weddings, travel arrangements), you will receive a zero on that
exam. A student who is absent from the final examination for a legitimate reason may apply for a deferred examination.
(The deferred final exam is tentatively scheduled for January 15, 2015 at 9:00am.There will be no “early final exams” or
other alternative scheduling arrangements: students must take the exam either at the regularly scheduled time or on the
deferred exam date.) Please refer to the University Calendar for further details regarding absence from exams:
http://www.registrar.ualberta.ca/calendar/Regulations-and-Information/Academic-Regulation/23.5.html#23.5

Points earned for participation, assignments and exams (see Table above) represent the only marks available to students:
make-up or extra work to improve your grade is not possible. If you feel that your grade is incorrect, you must notify me
in writing during the one-week period following the receipt of your marked exam. After that, the problem will not be
researched. Please note that a request to have a question on your exam re-graded entails a request to have the entire exam
re-graded.

Students will be allowed to bring one double-sided 8½×11 inch "cheat sheet" to the midterm and two such cheat sheets to
the final exam. There are no restrictions on what students can put on these sheets but they must be in human handwriting
or regular size font (Times New Roman 11, Arial 10 etc.) and may not be mechanically altered (i.e. reduced by a
photocopier). Personal computers (notebooks, laptops etc) are not allowed in exams. Programmable calculators must be
"de-programmed" before exams. If you have a programmable calculator, I suggest that you bring a different calculator for
exams if you want to retain any programmed information.

The final exam will be non-cumulative, though questions could use concepts discussed during the first half of the course.

A financial calculator, while useful in this class and allowed during exams, is not required. A calculator that has yx, ex and
ln x functions is sufficient.

Readings and Class schedule: The schedule may be modified as the semester progresses, if some topics take more or
less time than budgeted. Readings and/or chapters from the text may be added or deleted at a later date. Please try to read
the relevant materials before each session.

Topic Chapter Date X01 A21

Introduction/The Time Value of Money 1, 2, 3 & 4 September 1 14
Time Value of Money Continued 4, 5 September 8 21
Valuing Bonds 6
September 15 28
(also Duration in 30.4)
Valuing Stocks (Assignment 1 Due – A2) 7 Sept./Oct. 22 5
NPV and Alternative Investment Rules 8 Sept./Oct. 16 (extra
29
(Assignment 1 Due – X01) session)
Capital Budgeting (Assignment 2 Due) 9 October 13 19
Midterm Exam October 20 26
Risk, Return and Capital Markets 10
Oct./Nov. 27 2
Portfolio Choice (Assignment 3 Due – A2) 11
The Capital Asset Pricing Model (CAPM) 12 (skip 12.5-12.7)
November 3 16
Market efficiency (Assignment 3 Due – X01) 13
Introduction to Options 14
November 17 23
Option Pricing(Assignment 4 Due) 15
Real Options 16
November 24 30
Forward and Futures Contracts 30 (some)
Review (Assignment 5 Due) December 1 7
8 18
Final Exam December
(6:30pm) (9:00am)

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You will notice that we will not meet on October 6th (X01). The reason for this is that the University calendar for this year provides
13 class meetings for the X01 section and only 11 class meetings for the A2 section. Maintaining synchronicity in the schedules of the
sections requires that no class take places for section X01 on October 6th and an extra session is organized for A2 on October 16th.
2
LEARNING GOALS:

Learning Outcomes:

1. At the end of this course, you will have developed the following course specific skills or knowledge:

Students will be able to understand and analyze the major types of financial decisions made by corporations.Specifically,
students willbe introduced to the use discounted cash flow techniques in valuing financial assets and capital budgeting
projects; they will learn how to incorporate various measures of risk into their analysis; they will gain a basic
understanding of derivate securities such as financial options and futures; and they will be able to apply option pricing
methods to the valuation of real assets.

2. This course incorporates the Learning Goals of the MBA Program, in particular business fundamentals, teamwork and
leadership skills, critical thinking and problem solving, communication skills, ethical awareness, quantitative and
information processing skills, and global awareness.

3. Final grading in this class is done on the basis of individual student achievement of the course and program outcomes.
These outcomes are measured by the following assessments:

Midterm exam: Assesses critical thinking and problem solving as well as quantitative and information processing skills,
and grasp of quantitative material in first half of course.
Group assignments: Assesses the following skills: critical thinking and problem solving, teamwork and leadership,
quantitative and information processing, and (written) communications.
Class Participation: Assesses (oral) communication skills, ethical awareness, as well as critical thinking and problem
solving and global awareness. Discussion will focus on connecting the finance area to other business fundamentals.
Final exam: Assesses critical thinking and problem solving as well as quantitative and information processing skills, and
grasp of quantitative material in second half of course.