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COURSE OUTLINE ACADEMIC YEAR 2015/2016

Course Title:
Course
FIN 3000
Code:

CORPORATE FINANCE
Schedule
Type Code:

LEC

Programs:

Bachelor of Commerce
Finance

Pre-requisite
for:

FIN 3502

Restrictions:

None

Credit Value:

Class
Hours:

Prerequisite(s):

FIN 2500
STAT 1112

CoNone
requisite(s):

Approved By: Paul Griffin, PhD, MBA, CPA, CMA, CGA, CFP, FCSI
Associate Dean

Signature:

Date: December 16, 2015

Humber College Institute of Technology and Advanced Learning 2015/2016

42

Course Description
This course builds on the principles already acquired in the Financial Management course.
Focus is placed on decisions related to long-term capital budgeting, risk and uncertainty
affecting capital budgeting decisions, and the determination of the weighted average cost of
capital. Business valuations by firms and individuals are studied in the context of investment
decisions. Special attention is paid to issues such as long-term debt (bonds and leasing),
portfolio investment decisions, and the risks associated with all of them. It also considers
mergers and acquisitions, and international corporate finance in the context of an international
business.
Learning Outcomes
Upon successful completion of this course, students will be able to:
1. Describe the capital budgeting process, its basic principles including cash flow
estimation, and its pitfalls.
2. Calculate and interpret the results using each of the following methods to evaluate a
single capital project: net present value (NPV), internal rate of return (IRR), payback
period, discounted payback period, average accounting rate of return (AAR), and
profitability index (PI).
3. Describe the expected relations among an investments NPV, company value, and
stock price.
4. Calculate and interpret the weighted average cost of capital (WACC) of a company.
5. Calculate and interpret the cost of equity capital using the capital asset pricing model
approach, the dividend discount approach, and the bond yield plus risk premium
approach.
6. Calculate and interpret the beta and cost of capital for a project.
7. Define and explain leverage, business risk, sales risk, operating risk, and financial
risk and classify a risk, given a description.
8. Calculate and interpret the degree of operating leverage, the degree of financial
leverage and the degree of total leverage and describe the effect of financial
leverage on a companys net income and return on equity.
9. Calculate the breakeven quantity of sales and determine the companys net income
at various sales levels.
10. Describe dividend payment chronology and regular cash dividends, extra dividends,
stock dividends, stock splits, and reverse stock splits, including their expected effect
on a shareholders wealth and a companys financial ratios.
11. Calculate and compare the effects of a share repurchase on earnings per share and
book value per share when (1) the repurchase is financed with the companys
excess cash and (2) the company uses funded debt to finance the repurchase.
Humber College Institute of Technology and Advanced Learning 2015/2016

12. Describe primary sources of liquidity and factors that influence a companys liquidity
position.
13. Evaluate a companys management of accounts receivable, inventory, and accounts
payable over time and compared to peer companies.
14. Define corporate governance and describe provisions that should be included in a
strong corporate code of ethics.
15. Describe practices related to board and committee independence, experience,
compensation, external consultants, and frequency of elections and policies related
to voting rules, shareholder-sponsored proposals, common stock classes, and
takeover defenses.
16. Identify factors that an analyst should consider when evaluating the qualifications of
board members and the quality of board committees.
Essential Employability Skills
Essential Employability Skills are transferable skills that provide the foundation for a students
academic, vocational, and personal success.
X

Communication

Numeracy

Critical Thinking &

X
Problem Solving
Information Management X

Interpersonal
Personal

Learning Resources
Required Resources:
Corporate Finance: A Practical Approach, Second Edition by Michelle R. Clayman, Martin S.
Fridson, George H. Troughton. Part of the CFA Institute Investment Series
.
Supplemental Resources:
Readings from other Finance courses
Copyright
Copyright is the exclusive legal right given to a creator to reproduce, publish, sell or distribute
his/her work. All members of the Humber community are required to comply with Canadian
copyright law which governs the reproduction, use and distribution of copyrighted materials.
This means that the copying, use and distribution of copyright- protected materials, regardless
of format, is subject to certain limits and restrictions. For example, photocopying or scanning an
entire textbook is not allowed, nor is distributing a scanned book.
See the Humber Libraries website (http://library.humber.ca) for additional information regarding
copyright and for details on allowable limits.

Humber College Institute of Technology and Advanced Learning 2015/2016

Learning Delivery Format

Methods of Presentation:

Interactive lectures and discussions

Problem solving and exercises
Case studies
Individual and group assignments
Assigned readings and problems from course textbook, finance periodicals and current
literature

Online Activities:

Course Website, email access and communications with the professor

Internet access for research and data gathering
Word processing and software for calculations, presentations and document preparation

Course Content
UNIT
1

TOPIC(S)

ASSESSMENTS

Introduction

RESOURCES
Chapter 2

Capital Budgeting
2

Capital Budgeting (contd)

Chapter 2

Cost of Capital

Chapter 3

Costs of Capital (contd)

Chapter 3

Measures of Leverage

Chapter 4

Measures of Leverage (contd)

Chapter 4

Mid-term
Examination

Dividends and Share Repurchases: Basics

Chapter 6

Dividends and Share Repurchases: Basics

(contd)

Chapter 6

10

Working Capital Management

Chapter 8

11

Working Capital Management (contd)

Chapter 8

12

The Corporate Governance of Listed

Companies: A Manual for Investors

Reading 40, CFA

Program
Curriculum Level 1

Humber College Institute of Technology and Advanced Learning 2015/2016

UNIT
13

TOPIC(S)
The Corporate Governance of Listed
Companies: A Manual for Investors

ASSESSMENTS

RESOURCES
Reading 40, CFA
Program
Curriculum Level 1

14

Final
Comprehensive
Examination
Please note: this course schedule may change as resources and circumstances require.
Student Evaluations
Type of Assessment

In-Class Activities

15

Individual Assignments

15

Group Assignments

10

Mid-term Examination

25

Final Comprehensive Examination

35
100%

Course Specific Policies and Expectations

Participation
Course participation is vitally important and may include in-class discussions, exercises,
presentations, labs and lab assignments, blackboard course site activities, quizzes, library
research, and others as required.
Degree Students
In addition to meeting all program specific course and credit requirements, students must have
a Cumulative Program Grade Point Average (CPGPA) of 65 in order to be eligible for
graduation.
Policies and Procedures
It is the students responsibility to be aware of the College Academic Regulations which can be
found on the following website: http://www.humber.ca/academic-regulations
Academic Integrity
Academic integrity is essentially honesty in all academic endeavours. Academic integrity
requires that students avoid all forms of academic misconduct or dishonesty, including
plagiarism, cheating on tests or exams or any misrepresentation of academic accomplishment.
Humber College Institute of Technology and Advanced Learning 2015/2016

Research Activity
This course does not include any research activities that involve human participants. Students
will gather data ONLY from publicly available sources.
Academic Concern/Appeals
If a student has questions or concerns regarding a grade on an assignment or test, the student
should discuss the matter with the faculty member. The Program Co-ordinator and/or the
Associate Dean may be asked to assist if the faculty member and student are unable to resolve
issues. For additional information please refer to Section 13 of Colleges Academic Complaint
and Appeal Policy at the web site identified above.
Prior Learning Assessment Recognition (PLAR)
Course credits may be granted in recognition of prior learning, and that Application for
Consideration is made through the Office of the Registrar at
http://www.humber.ca/plar/docs/pla.pdf.
Accessible Learning Services
Humber strives to create a welcoming environment for all students where equity, diversity and
inclusion are paramount. Accessible Learning Services facilitates equal access for students with
disabilities by coordinating academic accommodations and services. Staff in Accessible
Learning Services are available by appointment to assess specific needs, provide referrals and
arrange appropriate accommodations. If you require academic accommodations, contact:
Accessible Learning Services: http://www.humber.ca/student-life/swac/accessible-learning
North Campus: (416) 675-6622 X5090
Lakeshore Campus: (416) 675-6622 X3331
Disclaimer
While every effort is made by the professor/faculty to cover all material listed in the outline, the
order, content, and/or evaluation may change in the event of special circumstances (e.g. time
constraints due to inclement weather, sickness, college closure, technology/equipment
problems or changes, etc.).

Humber College Institute of Technology and Advanced Learning 2015/2016