Académique Documents
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Wednesday
Wednesday
08.15
15.30
11.30
18.45
COURSE DESCRIPTION
This course focuses on the analysis of financial problems confronting a corporate financial manager, a theme begun
in the introductory Finance course. The main objective of this course is to help students develop further
understanding of current theories and their implications for solving financial problems. The main topics covered
include shareholder value maximization and managing of corporate growth, corporate capital investments, capital
structure policy, corporate payout policy, real options, investment banking and capital raising, mergers and
acquisitions, working capital management. Throughout the course, we will study the typical issues that
corporations face in making investment and financing decisions with an emphasis on valuation. Research results
from recent empirical work, case studies, and their implications for corporations will also be discussed.
LEARNING OBJECTIVES
By the end of the course, students will be able to:
Develop a workable capital structure policy
Assess the risk and consequences of financial distress and bankruptcy
Extract value from an optimal mix of financing alternatives
Formulate an effective working capital policy with sustainable growth
Establish an appropriate corporate payout policy
Understand corporate governance
Understand corporate transactions such as a merger or acquisition
Understand how the market reacts to relevant corporate announcements
ASSESSMENT METHODS
Group Project Presentation and Report: 35%
Class Participation: 10%
News Reading Recommendation: 5%
Final Exam: 50%
Academic Integrity
All acts of academic dishonesty (including, but not limited to, plagiarism, cheating, fabrication, facilitation of acts
of academic dishonesty by others, unauthorized possession of exam questions, or tampering with the
academic work of other students) are serious offences. All work presented in class must be the students own
work. Any student caught violating this policy may result in the student receiving zero marks for the
component assessment or a fail grade for the course. This policy applies to all works (whether oral or
written) submitted for purposes of assessment. When in doubt, students are encouraged to consult the
instructors of the course. Details on the SMU Code of Academic Integrity may be accessed
at http://www.smuscd.org/resources.html.
CONSULTATIONS
You are welcome to see me for questions at any time. Though I spend most of my time in the office, you
should contact me for an appointment before coming. My office and contact information are listed at the top
of this course outline. I am also readily available to answer your questions by email. I do my best to reply
within 24 hours.
Topic
Course Logistics
Introduction of Corporate Finance Topics
Capital Structure I
M&M Theorem and Tax Implications
Capital Structure II
Implications of Bankruptcy Costs
Capital Structure III
Implications of Conflicts of Interest
Debt Financing
Readings
(Berk/DeMarzo)
Ch. 1
Ch. 14, 15
Ch. 16
Ch. 16
Ch. 24
Equity Financing
IPO, SEO, Venture Capital, Private Placements
School Recess (October 6-12)
Ch. 23
9-10
Payout Policy
Ch. 17
10-11
Ch. 28
Ch. 29
13
14
15
12