Schulich School of Business
York University

Course Outline

FINE 2000T “Introduction to Finance”
Class Day: Mondays & Wednesdays, 10:00-11:30 a.m.
Room: SSB W136
Term: Winter, 2014

Instructor:
Tony Mayadunne amayadunne@schulich.yorku.ca
Room
Office hours: Mondays & Wednesdays, 11:30 a.m. to 12:30 p.m., or by appointment.

Brief Description:
Students learn about investment and financing in this core course. The investment decision allocates scarce resources to projects in the organization, and involves asset valuation, capital budgeting, risk management, working capital management and performance assessment. The financing decision chooses sources of cash to finance the investment decisions and involves capital structure, financial instruments, the risk-return trade-off, financial planning and the cost of capital. Ethical considerations and management in the global context are integrated into these topics.

Course Credit Exclusion: AP/ECON 3.00 (AS/ECON 4400 3.00 or AK/ECON 4082 3.00)

Prerequisite: none

Course objectives:
The course objectives are to introduce students to the theory of financial management and its application to the business world. It analyzes how financial managers make decisions within a framework which emphasizes the time value of money (TVM) and the relationship between expected return and risk. In addition, we examine the techniques that financial managers use to evaluate feasibility of undertaking new projects (i.e., capital budgeting).

This course is very fast paced, technical in nature, and it requires each student to do considerable out-of-class work. Problem solving throughout the course is required.

Organization of the Course:
Class format is lecture-style, with discussion and analysis of real time events. Students are expected to prepare for class by reading the assigned readings, and are expected to be current on financial issues by following a variety of sources.

Assigned Reading:
Required reading for this course includes the following book. It is available for purchase from the York University bookstore. Other readings are available on-line:

Fundamentals of Corporate Finance, 5th Canadian Edition; Brealey, Myers, Marcus, Maynes & Mitra, McGraw-Hill Ryerson, 2011.

Recommended reading: The Globe & Mail, the Economist, plus other on-line publications. We will, on occasion, review interesting articles from these publications from the previous week and examine their implications.
Evaluation of Student Performance:
The course grading scheme for undergraduate courses conforms to the 9-point system used in other undergraduate programs at York. The possible course letter grades for a course (and the corresponding grade points awarded for each grade are:

A+ A | 9 grade points8 | B+ | 7 | B | 6 | C+ | 5 | C | 4 | D+ | 3 | D | 2 | F | 0 |

(Students are reminded that they must maintain a cumulative GPA of at least 5.0 to remain in good standing and continue in the program, and to qualify for their degree. Schulich grading guidelines mandate a section GPA of between 5.5 and 7.0.)

Where instructors use numerical or percentage grades, Schulich grading policy does not require a preset translation of percentages into specific letter grades. In this class, final letter grades will be determined by the following process:

Grade Evaluation:

Quiz #1 (45 min.) | 10% | Quiz #2 (45 min.) | 15% | Midterm Exam....... | 30% | Final Exam............ | 45% | Total...... | 100% |

If you miss any Quiz or Mid-Term, you will to provide an Attending Physician Statement. If you miss the Midterm and have submitted a properly completed Attending Physician Statement (APS), then the weighting of the missed quiz or midterm will be added to your final exam.

Quiz:
There are 2 Quizzes during the term, both held in-class. On these days, lectures will also be held during the balance of the available time. The first Quiz (10% weight) is designed to ensure you have mastered some early concepts and can apply these using your calculator. The second Quiz (15% weight) deals with more advanced financial issues.

Exams:
Midterm exam: A 75-minute midterm exam will be held mid-way through the term. You will be provided a formula sheet as part of the exam. You must bring a non-programmable calculator with no text capabilities. No books, notes, phones or computers are allowed during the exam.

Final Exam: The final exam will be 3-hours long and will cover material from the entire course. You will be provided with a formula sheet as part of the exam. You must bring a non- programmable calculator with no text capabilities. No books, notes, phones or computers are allowed during the exam.

Academic Honesty:
Academic honesty is fundamental to the integrity of university education and degree programs. The Schulich School will investigate and will act to enforce academic honesty policies where apparent violations occur. Students should familiarize themselves with York University’s policy on academic honesty. It is printed in full in your student handbook and can also be viewed on-line on the Schulich website, clicking through as indicated:
Schulich website  ‘Programs’  ‘Bachelor’s Degree  ‘Learn More’  ‘Student Resources’  ‘Academic Policy’
While academic dishonesty can take many forms, there are several forms of which students should be highly aware because they are the ones that are most likely to occur in the context of a specific course.

[1] Plagiarism. Plagiarism is the presentation of information, ideas, or analysis generated by other people as being your own. It includes direct quotations as well a substantive paraphrases where the course of that information or idea is not clearly identified to the reader. Students should be careful to present their written work in a way that makes it completely clear in each and every cases where a quotation, a paraphrase, or an analysis is based on the work of other people. (This includes information from all sources, including websites.)

[2] Cheating. Cheating is an attempt to gain an unfair advantage in an evaluation. Examples of such violations include (but are not limited to) consulting prohibited materials during an examination or copying from another student.

[3] Failure to follow limitations on collaborative work with other students in preparing academic assignments. Each class differs in the mix of assignments and group-versus- individual preparation that is allowed. The instructor will make clear the extent of collaboration among students that is acceptable among students on various pieces of assigned work. Students should abide by those limitations and, if they are unsure about whether a certain level or form of collaboration would be acceptable, to clarify that question with the instructor in advance.

[4] Aiding and abetting. A student is guilty of violating academic honesty expectations if he/she acts in a way that enables another student to engage in academic dishonesty. If a student knows (or should reasonably expect) that an action would enable another student to cheat or plagiarize, that student’s action constitutes an academic honesty violation. Illustrative examples include making your exam paper easily visible to others in the same exam or providing your own working or finished documents for an
‘individual assignment’ to another student (even if that other student said that he/she just wanted to ‘get an idea of how to approach the assignment’ or ‘to check whether they had done theirs correctly’).

[5] Use of academic work in more than one course. Generally, academic work done for every course is ‘new’ work, done for that course only. If a student wishes to use some

or all of the academic work done for an assigned task in one course in another course, the student must get explicit, prior permission from both instructors so that they agree that the scope and nature of the overlapping use of that work is such that it can fairly be counted toward both courses.

Other information:

 Use of cellphones, PDAs, is NOT allowed in the lecture room. They MUST be turned off.

 I will post lecture slides before the class and materials to the CMD. Review all material before the lecture. Be prepared to participate and engage in discussion.

 Calculator: Every student m u st have a hand-held calculator that has Time Value of Money functions and you will need to be able to use your calculator effectively. Some examples of calculators you may wish to purchase include: The Texas Instruments BAII Plus (supported by current text and used in CPA and CFA programs), the Sharpe EL 735 (or later) model, or the Hewlett Packard HP12, are all good choices. (Look for n, i or I/Y, PMT, PV, FV, CF, IRR and NPV functions).

 For the midterm and final, sample exams will be posted on CMD and the solutions to these sample exams will be discussed in class.

Punctuality and decorum:
Lectures will start at the indicated time, sharp. Students are expected to be on time. If you are uncharacteristically late due to unforeseen circumstances, please take a seat at the back of the class and try not to disturb anyone. Students are asked to remain in the class for the duration of the lectures and not to leave the classroom and/or come back and forth at will. If you must leave early occasionally, please have the courtesy to let me know in advance.

Schedule of Topics and Readings:
The following list of lecture topics and readings indicate the material to be read, reviewed and/or prepared for the various class sessions. If any changes in this schedule become necessary, notifications will be posted in the course CMD, and where such changes need to be announced between class sessions, an email will be sent to students, notifying them of the change. The topic order is stated below and is a guideline only. The instructor reserves the right to alter the schedule as needed.

10:00 – 11:30am — Room W136

Lecture | Date | Topic and Textbook Material | 1 | Jan. 6, Mon | Introduction to Corporate Finance - Chapters 1 & 2 | 2 | Jan 8, Wed | Review of Accounting and Finance - Chapter 3 | | | | 3 | Jan 13, Mon | Measuring Corporate Performance - Chapter 4 | 4 | Jan 15, Wed | Measuring Corporate Performance (continued) | | | | 5 | Jan 20, Mon | Time Value of Money ("TVM") - Chapter 5 | 6 | Jan 22, Wed | TVM (continued) | | | | 7 | Jan 27, Mon | Bonds - Chapter 6 & QUIZ #1 (worth 10%; covers Ch. 1-5) - 45 min. | 8 | Jan 29, Wed | Bonds (continued) | | | | 9 | Feb 3, Mon | Stocks - Chapter 7 | 10 | Feb 5, Wed | Stocks (con’t) & Corporate Financing - Chapter 14 (sections 14.2-14.5 only) | | | | 11 | Feb 10, Wed | Net Present Value ("NPV") & Other Criterion - Chapter 8 | 12 | Feb 12, Mon | MID_TERM EXAM (worth 30%; covers Ch. 1-7 & 14) - 75 min. | | | | No Classes | Feb. 17-21 | **** BBA Reading Week **** | | | | 13 | Feb 24, Mon | Net Present Value & Other Criterion (continued) | 14 | Feb 26, Wed | Discounted Cash Flow (DCF) Analysis - Chapter 9 | | | | 15 | Mar 3, Mon | DCF (continued) | 16 | Mar 5, Wed | Project Analysis - Chapter 10 | | | | 17 | Mar 10, Mon | Introduction to Risk and Return - Chapter 11 | 18 | Mar 12, Wed | Risk (continued) & QUIZ # 2 (worth 15%; covers Ch. 8-10) – 45 min. | | | | 19 | Mar 17, Mon | Risk, Return & Capital Budgeting - Chapter 12 | 20 | Mar 19, Wed | Risk, Return & Capital Budgeting (continued) | | | | 21 | Mar 24, Mon | Cost of Capital - Chapter 13 | 22 | Mar 26, Wed | Cost of Capital (continued) | | | | 23 | Mar 31, Mon | How Corporations Issue Securities - Chapter 15 | 24 | Apr 2, Wed | Review & catch-up | | | | | Apr 8-24 | FINAL EXAM (Date TBA) – 3 hours |
Last revised: December 19, 2013