Course Outline

RSM 333 H1S

Introduction to Corporate Finance
Summer 2019

Course Meets:

L0101 Tues and Thurs 12 – 2 pm WW 126

L0201 Tues and Thurs 3 – 5 pm WW 126

T5101 Tues and Thurs (Tutorials) 9 – 11 am RW 117

Instructor: Federica Clerici, federica.clerici16@rotman.utoronto.ca

Office Location: RT 465
Office Hours: Wednesday 4 – 6 pm, or by appointment

TA: Zohair Alam

Course Scope and Mission

This is an introductory course in corporate finance. The course provides a framework for
analyzing the major types of investment and financing decisions made by corporations. Lectures
and readings will provide an introduction to financial planning and working capital management,
capital budgeting principles, mergers & acquisitions, leasing, cost of capital, capital structure and
dividend policy.

Course Prerequisites

Exclusion: ACT349H1, ECO359H1

Prerequisite: RSM219H1, RSM332H1

Required Readings
The required textbooks:

Booth, L., Cleary, W. S., and Rakita, I., Introduction to Corporate Finance, 4th Edition, John
Wiley & Sons, Canada, 2016 (ISBN: 978-1-119-17128).

DeMello, Jim, Cases in Finance, Custom eBook, McGraw-Hill, 2018 (ISBN: 9781307288247)
To purchase the Cases eBook:

1. Go to https://create.mheducation.com/shop/

2. Search for and select book by Title, ISBN, Author, or State/School (County must be
set to Canada)

ISBN: 9781307288247
Title: Demello Custom

3. Add the book to your cart and pay using a credit card or access code.

For detailed instruction use the links below.

- Purchasing a book with an access code - PDF
- Purchasing a book using a credit card - PDF

Evaluation and Grades

Grades are a measure of the performance of a student in individual courses. Each student shall
be judged on the basis of how well he or she has command of the course materials.

Work Due Date

Term Test 1 25% Thursday July 18 9:10-11am RW 117

Term Test 2 25% Thursday August 1 9:10-11am RW 117

Final Test 50% During Faculty of Arts & Science Final Exam period

There are no assignments or group work.

Term Test 1 is 1 hour and 50 min. in length and will cover material from lectures 1, 2, 3, and 4.

Term Test 2 is 1 hour and 50 min. in length and will cover material from lectures 5, 6, 7, and 8.

Final Exam is 3 hours in length will cover material from ALL lectures, with emphasis on lectures
9, 10 and 11.

Note that questions about the six cases covered during the term (from the Demello Case
eBook) will comprise approximately 30% of the Final Exam.
Test Policies

Formula sheets will be distributed during TERM TESTS and the FINAL EXAM. A crib sheet is
permitted for the FINAL EXAM ONLY. One 8.5” x 11” sheet of paper with writing on both sides
is allowed during the Final Exam. Additional aides are limited to non-programmable calculators
and writing implements.

Weekly Tutorials

Tutorial problems are assigned in advance and are based on both end of chapter textbook
problems and on Cases introduced in class. At the tutorial, you will work through the assigned
problems, with a demonstration of how to approach the problems and think through the
solutions. After the tutorials, the solutions to all assigned problems will be posted. To make best
use of available time, Tutorial sessions will focus on the most challenging of the assigned
problems.

Note that both term tests will be conducted during the Tutorial Time Slot on Thursday mornings.

Tutorial Schedule:

Date Material
July 4 Term Test 1 Material
July 9 Term Test 1 Material
July 11 Term Test 1 Material
July 16 Term Test 1 Material
July 18 Term Test 1
July 23 Term Test 2 Material
July 25 Term Test 2 Material
July 30 Term Test 2 Material
Aug 1 Term Test 2
Aug 6 Post Test 2 Material
Aug 8 Post Test 2 Material
Weekly Schedule (any changes will be announced in class)

Session Date Topic Readings

Ch. 2, 3.3 – 3.5,
Intro to Corporate Finance and Corporate
4.1 – 4.7
1 July 2 Governance
CASE 1: Are We Getting
Refresher on Financial Analysis
Too Big for Our Boots?
Ch. 4.8 – 4.9, 23
Financial Planning and Working Capital
2 July 4 CASE 2: The Elusive
Issues
Cash Balance
Working Capital: Current Assets and Current
3 July 9 Ch. 24
Liabilities
Project Evaluation – Intro to Capital Ch. 13.1 – 13.2, 13.4,
4 July 11
Budgeting Methods 13A
Ch. 13.3 – 13.5, 3.5,
Cash Flow Estimation and Capital Budgeting 14.1
5 July 16
Decisions CASE 3: Too Hot to
Handle
July 18 Term Test 1: Lectures 1, 2, 3, and 4; 9:10 – 11am
Ch. 14.2 – 14.5
6 July 18 Project Evaluation cont’d CASE 4: I Wish I Had a
Crystal Ball
M&A
7 July 23 Ch. 15.1 – 15.4
8 July 25 Leasing Ch. 16
9 July 30 Cost of Capital Ch. 20
Aug 1 Term Test 2: Lectures 5, 6, 7, and 8; 9:10 – 11am

Ch. 21
10 Aug 1 Capital Structure CASE 5: It’s Better to Be
Safe Than Sorry
Ch. 22
11 Aug 6 Dividend Policy CASE 6: Much Ado
About Nothing?
12 Aug 8 Final Exam Review
POLICIES AND PROCEDURES

Missed Tests (including midterm examinations)

Students who miss a test for reasons entirely beyond their control (e.g. illness) may submit a
request for special consideration. Provided that notification and documentation are provided in a
timely manner, and that the request is subsequently approved, no academic penalty will be
applied.

In such cases, students must notify Rotman Commerce on the date of the missed test and
submit supporting documentation (e.g. Verification of Student Illness or Injury form) to the
Rotman Commerce Program Office within 48 hours of the originally scheduled test. Students
who do not provide Rotman Commerce or the instructor with appropriate or sufficient supporting
documentation will be given a grade of 0 (zero) for the missed test.

Documentation submitted in support of petitions for missing tests must be original; no faxed or
scanned copies will be accepted. Note that the physician’s report must establish that the
patient was examined and diagnosed at the time of illness, not after the fact. Rotman
Commerce will not accept a statement that merely confirms a later report of illness made
by the student to a physician.

If for documented legitimate medical or compassionate reasons, a student is unable to

take a term test, the 25% of the course deliverable for that test will be re-allocated to
remaining course deliverables. Note that a student missing the first term test will not be
receiving any course feedback before the course drop deadline. If a student is unable to
take a term test due to a scheduling conflict, they should consult the instructor. All
reasons must be approved by the Commerce Office. If for any legitimate reasons a
student would have to miss both term tests, they must inform the instructor and obtain
approval from the Commerce Office to take a 100% final examination in order to complete
the course in the current term.

If you have concerns about the grading of a Test, please bring them to the attention of the
instructor within one week of the Test being returned. Please re-submit the Test with a
written explanation of your concerns. Tests re-submitted for remarking will be remarked
in their entirety.

Accessibility Needs
The University of Toronto is committed to accessibility. If you require accommodations for a
disability, or have any accessibility concerns about the course, the classroom or course
materials, please contact Accessibility Services as soon as possible:
accessibility.services@utoronto.ca or http://www.studentlife.utoronto.ca/as.

Academic Integrity
Academic Integrity is a fundamental value essential to the pursuit of learning and scholarships at
the University of Toronto. Participating honestly, respectively, responsibly, and fairly in this
academic community ensures that the UofT degree that you earn will continue to be valued and
respected as a true signifier of a student's individual work and academic achievement. As a
result, the University treats cases of academic misconduct very seriously.

The University of Toronto’s Code of Behaviour on Academic Matters

http://www.governingcouncil.utoronto.ca/policies/behaveac.htm outlines the behaviours that
constitute academic misconduct, the process for addressing academic offences, and the
penalties that may be imposed. You are expected to be familiar with the contents of this
document. Potential offences include, but are not limited to:
On test and exams:
• Using or possessing any unauthorized aid, including a cell phone.
• Looking at someone else's answers
• Misrepresenting your identity.
• Submitting an altered test for re-grading.

Misrepresentation:
• Falsifying institutional documents or grades.
• Falsifying or altering any documentation required by the University, including (but not
limited to), medical notes.

All suspected cases of academic dishonesty will be investigated by the following procedures
outlined in the Code of Behaviour on Academic Matters. If you have any question about what is
or is not permitted in the course, please do not hesitate to contact the course instructor. If you
have any questions about appropriate research and citation methods, you are expected to seek
out additional information from the instructor or other UofT resources such as College Writing
Centres or the Academic Success Centre.

Email
At times, the course instructor may decide to communicate important course information by
email. As such, all UofT students are required to have a valid UTmail+ email address. You are
responsible for ensuring that your UTmail+ email address is set up AND properly entered on the
ROSI system. For more information please visit http://help.ic.utoronto.ca/category/3/utmail.html

Forwarding your utoronto.ca email to a Hotmail, Gmail, Yahoo or other type of email account is
not advisable. In some cases, messages from utoronto.ca addresses sent to Hotmail, Gmail or
Yahoo accounts are filtered as junk mail, which means that important messages from your
course instructor may end up in your spam or junk mail folder.

Quercus and the Course Page

The online course page for this course is accessed through Quercus. To access the course
page, go to q.utoronto.ca and log in using your UTORid and password. Once you have logged
in, you will be at the Quercus Dashboard. On this page you will see all of the courses you are
presently enrolled in. If you don’t see the course listed here but you are properly registered for
the course in ROSI, wait 48 hours.

Recording Lectures
Lectures and course materials prepared by the instructor are considered by the University to be
an instructor’s intellectual property covered by the Canadian Copyright Act. Students wishing to
record a lecture or other course material in any way are required to ask the instructor’s explicit
permission, and may not do so unless permission is granted (note: students who have been
previously granted permission to record lectures as an accommodation for a disability are, of
course, excepted). This includes tape recording, filming, photographing PowerPoint slides,
Blackboard materials, etc.

If permission is granted by the instructor (or via Accessibility Services), it is intended for the
individual student’s own study purposes and does not include permission to “publish” them in
anyway. It is absolutely forbidden for a student to publish an instructor’s notes to a website or
sell them in any other form without formal permission.