CASE WESTERN RESERVE UNIVERSITY

Weatherhead School of Management

BAFI 355: Corporate Finance
Fall 2014

Instructor:
C.N.V. Krishnan

Class:
Mondays/Wednesdays

Communication:
Office: 363 Peter Lewis Building
Telephone: 216-368-2116
E-mail address: cnk2@case.edu
Course Web site: BAFI 355 site in http://blackboard.case.edu/
An effective way to communicate with me is through e-mail. I will also use e-mail to communicate with
you. Lecture material and assignments will be made available at the Blackboard site for this course.
Please make sure you have access to Blackboard before the first class. Please check your email and
Blackboard regularly.

Appointments:
I encourage you to meet with me to clarify doubts, in case your doubts cannot be easily cleared via email.
Please email me to set up a time for an appointment in my office.

The Course:
This is a core course. The tools, problem solving techniques, and ways of thinking that you develop in
this course have broad applicability in business. They also form the basis for sensible personal decisions
in the areas of investments, borrowing, and financial planning. In this course, we will study time value of
money, stock and bond valuation, risk and return, and project valuation. Topics covered may change from
semester to semester. The course envisages use of spreadsheets.

Recommended, NOT Required:
Fundamentals of Corporate Finance 10
th
edition, Ross, Westerfield, and Jordan, McGraw Hill,
available for purchase from the University bookstore or elsewhere.

1. Regular Attendance is crucial. We will cover real life and newer concepts in class, not found in text
books. Thus, missing classes may adversely impact not only your class participation grade of 10% but also
your exam scores because class discussions are crucial for doing well in exams. I want all of you to feel free
to stop me at any point in class for clarification or ask a question.

2. It is advisable to bring your laptop, with the relevant spreadsheets and lecture slides downloaded, to class
everyday, to follow-along.

Exams:
There will be a midterm and a final exam, each counting for 25% of the final grade (50% total).
The Final exam will be on only the material covered after the Midterm exam. Thus, the Final exam is not
cumulative over all material. If your performance on the final exam is an improvement over your midterm
exam, we will use the final exam score for the aggregate score for the course. For example, if you scored
10 out of 25 points in the midterm and scored 15 out of 25 points in the final, we will use the higher score
on the final to determine the aggregate score for both exams. Thus, your final score will be 15*2 = 30 out
of 50. If your score in the final exam is NOT more than your score in the midterm exam, then the
aggregate score of both your midterm and final exams will be counted towards your final grade. Thus, if
you improve through the course only your better performance in the final exam will be counted, but if that
does not happen, the poor performance in the final exam will be averaged out by your better performance
in the midterm exam.
The exams will be open book and open notes. Laptops/calculators may be used. Cell phones
cannot be used in class.
Exam grading: For specific problems on the exams, if your solution is correct for the most part,
in the graders opinion, you will get partial credit. But you could get zero if your solution has non-trivial
errors. It will really benefit you to show all the steps NEATLY and CLEARLY. Partial credits imply that
you get part of the credit for the answer and part credit for the process. If you write down the correct
answer without showing how you got the answer, then it will be treated as an admission that you do not
fully understand the process. In that case, you will get 25% of the allotted points.
Exam Time: Everyone is required to take the exams at the scheduled times (see the schedule at
the end of this syllabus). If any student cannot take an exam for valid reasons (backed up by a medical
certificate, for example) and informs the instructor before the exam begins, I reserve the right to give a
different exam or an assignment (the student will run the risk that the degree of difficulty is higher from
that for the rest of the class). Without a valid reason and without informing the instructor before the
exam, if a student misses an exam, he/she will get a zero for that exam.


Homework Assignments:

There are 6 homework assignments. Each homework is worth 6 points. Homework problems may be
submitted individually or in your work group. If you are submitting as a group, please be sure to list all
the students who participated in the assignment. Points will be given to only those whose names are listed
on the assignment submission. It will benefit you most to solve these assignments on your own. The
homework problems are useful in helping you understand what we have covered in class and they will
consolidate your understanding of the material. They also provide an excellent review for the exam in that
part.
Grading Policy for assignments: Each assignment will have several questions. We will check to see if
you have attempted all questions on the assignment. You get full points ONLY IF you attempted ALL
questions, and showed all your work NEATLY and CLEARLY. Please turn in your homework
assignments typed or neatly and legibly hand written.
Note: Sloppy or shoddy work will not be graded. You do not have to type your assignments but please
make sure they are neatly organized and easy to read/comprehend. It will really benefit you to show your
work NEATLY and CLEARLY on assignments and on your exams.
Do not leave any questions unanswered. The answers will be discussed in class and/or posted on
Blackboard. Please study the solutions and check your answers for errors. Understanding how to do the
homework problems is CRUCIAL for doing well in the exams.
Note: Homework assignment points are freebies. Therefore, please do not miss answering any question in
any homework assignment.






Final Letter Grades:
Your grade in the course will be based on your cumulative score in exams, group assignments,
individual homework assignments and participation as per the weights given below. I will decide the
cutoffs for the letter grades at the end of the semester, based on the overall performance of the class. To
assign the letter grades, I will rank students in descending order, after the last exam, based on each
students cumulative score. Your letter grades will be based on your final rank in class.


Percentage of grade

Midterm and Final Exams or just Final exam 50%
Homework Assignments (6) 36%
Class Participation 14%


Note: There is no provision for make-up exams or assignments in this course, so please do not come to
the professor with this request. Homework or group assignments not submitted on time will get 0 credit.
Exams missed without a valid reason (e.g., doctors certificate) and without informing the professor
before the exam will also get 0 credit.

Student Commitment:
You will find the material covered in class easier to understand if you prepare for the class by studying
the lecture notes and lecture spreadsheets (that will be posted on the blackboard) and distributed readings
before class. You should revisit the lecture notes and spreadsheets after class and try to solve the
problems discussed in class and the problems of the homework assignments on your own, to maximize
learning.

Academic Integrity:
All students in this course are expected to adhere to university standards of academic integrity. Cheating,
plagiarism, and other forms of academic dishonesty will not be tolerated in this course. This includes, but
is not limited to, consulting with another person during an exam, turning in written work that was
prepared by someone other than you, and making minor modifications to the work of someone else and
turning it in as your own. Ignorance will not be permitted as an excuse. If you are not sure whether
something you plan to submit would be considered either cheating or plagiarism, it is your responsibility
to ask for clarification. When your name appears on a group product for a class, you are responsible for
the integrity of the work, even if you did not personally write the offending material.
Please visit the link:
http://bulletin.case.edu/weatherheadschoolofmanagement/policies/#academicintegritypolicytext
Schedule of classes (please be sure to attend all classes):

M, 8/25 Introduction
W, 8/27 Time Value of Money
M, 9/1 No Class: Labor Day
W, 9/3 Time Value of Money
M, 9/8 Time Value of Money
W, 9/10 Hw1 due, discussion
M, 9/15 Bond Valuation, Stock Valuation
W, 9/17 Bond Valuation, Stock Valuation
M, 9/22 Bond Valuation, Stock Valuation
W, 9/24 Hw2 due, discussion
M, 9/29 Investment Decision Rules
W, 10/1 Investment Decision Rules
M, 10/6 Hw3 due, discussion
W, 10/8 Practice Midterm Discussion
M, 10/13 Midterm Exam
W, 10/15 No class
M, 10/20 Midterm Exam Discussion
W, 10/22 Risk and Return
M, 10/27 No Class: Fall Break
W, 10/29 Risk and Return
M, 11/3 Risk and Return
W, 11/5 Hw4 due, discussion
M, 11/10 CAPM
W, 11/12 WACC
M, 11/17 Hw5 due, discussion
W, 11/19 Project Valuation
M, 11/24 Project Valuation
W, 11/26 Project Valuation, Wrap Up
M, 12/1 Hw6 due, discussion
W, 12/3 Practice Final Discussion
M, 12/8 Final