FINA 395 /2 A Theory of Finance II Fall 2023

Instructor Monir Wahhab

Office MB 12.280 or MB 12.282
Phone 514-848-2424 ext 2792
E-mail Monir.wahhab@concordia.ca
Office Hours By appointment only
Class Time and Location: Fri 5:45 - 8:15 PM
MB S2.115

For any email correspondence, please start with FINA 395 in the subject line.

Course Materials:

Textbook: Corporate Finance, 9th Canadian Edition, by Ross, Westerfield,

Jaffe, and Driss,
McGraw-Hill Ryerson 2022.

Calculator: A financial calculator is not essential in this course. A

scientific calculator is sufficient. But, if you feel more
comfortable or/and more familiar with a financial
calculator, then I would personally suggest the Texas
Instruments BAII+. Please note, your calculator is only a tool
and cannot substitute for an understanding of the problem-
solving process.

Moodle: We will use a Moodle website to facilitate interaction. Each

student should have access to the course site through the
MyConcordia portal.Any problems accessing your
Moodle website should be directed toHelp@concordia.ca,
or by phoning 514 848 2424 ext.7613.

COMMUNICATING WITH ME: The best way to contact me outside of the

classroom is via email. I am happy to
meet with students outside the classroom so
email me to schedule an appointment.
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Course Description & Objective:

This course focuses on the financial theory of the firm. Topics covered include
capital budgeting, the cost of capital, investment and financing decisions, capital
structure, the Modigliani-Miller propositions, leveraged buyout decisions, real
options, business valuation, mergers & acquisitions, and international corporate
Finance.

The objective of this course is to introduce you to the financing and investment
decisions of corporations. Corporate Finance is about raising money (financing)
and spending money (investing) and deciding on the best ways to accomplish these
tasks.
An understanding of firm’s financial management is crucial for all business
managers. This course is useful for those who are planning a career in financial
management.

Corporate Finance is an exciting, challenging and ever-changing discipline. I hope

you will get as much fun out of this course as I have teaching it. I also hope that
you will gain from it and be able to put into practice some of its theories.

Learning Objectives:
At the end of this course:
1. You should attain a sound understanding of the concepts used in corporate
decision making,
2. You should acquire & develop the skills needed to compute numbers that are
required for decision making
3. You should be able to apply your conceptual understanding to complex
problem-solving that goes beyond simple application of formulas in standard
settings.
4. To provide an opportunity to apply the theory and tools learned in this
course to real-world problems. This will be achieved using case studies.

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Course Evaluation & General Information:

 There will be one midterm, three mini quizzes, a group case, and a final
exam. The final exam is cumulative.

 There will be one collaborative assignment (case) prepared by a group/team

of students. Each team consists of a maximum of three members. You need to form a
team before the end of week 3. Further details on the assignment (case) will be
provided in due time.

 Examinations will be drawn from all the material presented and covered in
the text, and in class.

 You will be provided with a formula sheet containing most of the formulas
you need for the midterm and final exams.

 Non-programmable calculators (financial and/or scientific) are allowed in

exams. Personal computers (notebooks, laptops, etc.) or any other electronic
devices (tablets, cell phones, etc.) are not allowed in exams.

 There will be no make-ups or extensions for the midterm exam. If you know
in advance that you are unable to write the midterm exam on the scheduled
date or time due to a valid reason, you must email your course instructor at
least ONE week before the scheduled midterm exam and provide all
necessary documentation. If there is a valid and documented reason for
missing the midterm exam, the weight of the midterm will be transferred to
the final exam. If you do not provide a valid reason for missing the exam, it
will count as zero.

 You are responsible for obtaining all information about any lecture material
missed from your fellow students.

 The responsible use of laptops is allowed only for class purposes, like taking
notes or as directed by the instructor, but not for checking email or surfing
the web during class time.

 I expect you to have a reasonable understanding of time value of money,

risk-return relationships as well as the valuation of financial instruments

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 (securities) such as bonds & stocks. Some background in statistics and
quantitative analysis will also be useful.

Course grades will be evaluated as follows:

Summary of Tasks Marks Key Due/Dates
First mini quiz (10 - 15 minutes) 3.0% Fri, Sept 29, 2023
Mid-Term (100% MC) 25% Sat, Oct 28, 2023 (10:30 - 12:30)
Second mini quiz (10 - 15 minutes) 3.0% Fri, Nov 17, 2023
Third mini quiz (10 - 15 minutes) 4.0% Fri, Nov 24, 2023
Group Assignment (Case) 15% Fri, Dec 1, 2023
Final Exam (Cumulative) (75% MC) 50% Scheduled by the examination office
Total 100%

 Please note that a minimum of 40% on the final is required to pass this
course.

 The rules customary followed by the university will govern any absence
from the final exam.

The approximate conversion of scores to letter grades will be as per the table
below:

Letter Grade Numerical Equivalent

A+ 90 -100
A 85-89
A- 80 – 84
B+ 77-79
B 73-76
B- 70-72
C+ 67-69
C 63 – 66
C- 60 – 62
D+ 57-59
D 53-56
D- 50-52
FNS 49 and below
F/DNW Fail/Did Not Write
NR No Record

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I reserve the right to modify the cut-offs based on the mean and dispersion of the
final scores.
Concordia Support Services

Concordia University offers many on-campus support services that are available to students free of
charge. The web link http://www.concordia.ca/students/help4u.html is a virtual student information desk;
it is a useful facility that guides students to a specific support service that can provide appropriate
assistance. You can also visit http://www.concordia.ca/students/campus-services.html for direction to
various support services. Here is a list of some useful services at Concordia University:
 Academic Integrity – http://www.concordia.ca/students/academic-integrity.html
 Access Centre for Students with Disabilities – http://www.concordia.ca/offices/acsd.html
 Advocacy and Support Services – http://www.concordia.ca/offices/advocacy.html
 Concordia Library Citation and Style Guides – http://library.concordia.ca/help/howto/citations.html
 Counselling and Psychological Services – http://www.concordia.ca/students/counselling-life-
skills.html
 CSU Advocacy Centre –https://csu.qc.ca/advocacy
 Dean of Students Office – http://www.concordia.ca/offices/dean-students
 Financial Aid and Awards – http://www.concordia.ca/offices/faao.html
 Health Services – http://www.concordia.ca/students/health.html
 HOJO (Off Campus Housing and Job Bank – https://csu.qc.ca/hojo
 International Students Office – http://www.concordia.ca/students/international
 New Student Program –http://www.concordia.ca/students/new.html
 Student Hub – http://www.concordia.ca/students
 Student Success Centre – http://www.concordia.ca/students/success

Academic Integrity and Code of Conduct:

I expect honesty and integrity from my students. Cheating of any sort will be dealt with as sternly as
University policy allows.

The Code of Conduct (Academic) at Concordia University states that the “integrity of University
academic life and of the degrees, diplomas and certificates the University confers is dependent upon the
honesty and soundness of the instructor-student learning relationship and, in particular, that of the
evaluation process. As such, all students are expected to be honest in all of their academic endeavours
and relationships with the University.” (Undergraduate Calendar, section 17.10).
All students enrolled at Concordia are expected to familiarize themselves with the contents of this Code.
Students are strongly encouraged to read the pertinent section in the Concordia Undergraduate calendar
and visit the following web address: http://www.concordia.ca/students/academic-integrity.htmlboth of
which provide useful information about proper academic conduct. Make sure to take the Academic
Integrity Test if you have not done it already.

Plagiarism:

The most common offense under the Academic Code of Conduct is plagiarism which the Code defines as
“the presentation of the work of another person as one’s own or without proper
acknowledgement.” This includes material copied word for word from books, journals, Internet sites,
professor’s course notes etc. It refers to material that is paraphrased but closely resembles the original
source. It also includes for example the work of a fellow student, an answer on a quiz, data for a lab
report, a paper or assignment completed by another student. It might be a paper purchased from any
source. Plagiarism does not refer to words alone – it can refer to copying images, graphs, tables and
ideas. “Presentation” is not limited to written work. It includes oral presentations, computer assignment
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and artistic works. Finally, if you translate the work of another person into any other language and do not
cite the source, this is also plagiarism. In Simple Words: Do not copy, paraphrase or translate
anything from anywhere without saying where you obtained it!
(Source: The Academic Integrity Website: http://www.concordia.ca/students/academic-integrity.html )
Lecture Schedule: (FINA 395/2 A)
Please note that this schedule is intended to give you an idea of the sequence of topics and may
not be exact. That is, we will sometimes go faster or slower. To ensure that you are well prepared
for each class, I strongly recommend that you always read one chapter ahead before coming to
class.It is also essential that you attend class in order to remain up to date.

Week Dates Topic(s) Required Readings

1 Sept 08 Net Present Value & Other Investment Rules Chapter7

2 Sept 15 Net Present Value & Capital Budgeting (CB) Chapter 8
3 Sept 22 Risk Analysis, Real Options, and CB Chapter 9 (Skip 9.3)
4 Sept 29 Risk, Return, and CB Chapter 13 (Skip 13.7) `
First Mini Quiz
5 Oct 06 Capital Structure: Basic Concepts Chapter 16

Oct 13 Mid-Term Break Have fun

6 Oct 20 Capital Structure: Limits to the Use of Debt Chapter 17 (Skip 17.7)
7 Oct 27 Valuation & Capital Budgeting for the Levered Firm Chapter 18
Sat, Oct 28 Mid-Term Exam 10:30-12:30 in H-435 Chapters 7,8,9,13,16,17
8 Nov 03 Long -Term Debt Chapter 21

9 Nov 10 Warrants & Convertibles Chapter 25 (Skip 25.3)

10 Nov 17 Mergers & Acquisitions Chapter 30

Second Mini Quiz
11 Nov 24 Mergers & Acquisitions Chapter 30
International Corporate Finance Chapter 32
Third Mini Quiz
12 Dec 01 International Corporate Finance Chapter 32
Group Case Due
Final Exam administered by the Exams office Cumulative

Disclaimer:

If the University is unable to provide services or that courses are interrupted due to events beyond the
reasonable control of the University, including classroom disruptions, the University reserves the right to
modify any element contained in the course outline including but not limited to the grading scheme and
the weight accorded to exams or assignments. The instructor reserves the right to make changes to this
course syllabus.

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While one person hesitates because he feels inferior, the other is busy making
mistakes and becoming superior. Unknown author

I wish you a very successful academic semester.

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