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CORPORATE FINANCIAL MANAGEMENT BUS 536 FALL 2014 MW 5:00- 6:15PM (VH216)
Dr. Orkunt Dalgic
Office: VH 339
Phone: (845) 257-2939
Email: dalgico@newpaltz.edu
Office Hours
Mon 11am-12pm & 3:30pm-4:30pm
Thu 11am-1pm
Course Description
The role of financial management in business decisions, the relationship between finance and other corporate
functions, and quantitative techniques used for analysis. Topics include financial analysis, planning and control,
valuation, and investing and financing decisions.
Student Learning Objectives
At the end of this course, the student will be able to:
1. Understand how financial markets work
2. Interpret and apply information contained in financial statements using appropriate analytical tools
3. Apply financial forecasting techniques
4. Analyze the relationship between risk and return
5. Solve problems related to discounted cash flow analysis
6. Value the firm as well as stocks and bonds
7. Evaluate long-term investing and financing decisions

Attainment of the course objective is measured primarily by students performance in examination. The
course also introduces computer applications in financial analysis and develops "real-world" computer
skills for the student as well as developing the written communications skills required to present the
results of the analyses performed. The knowledge and understanding gained in this course will serve the
students in their future business and professional careers.
Program Goals Supported
MBA
goals
Globalization Analytical Skills Communication Ethics Leadership
Major V
Minor V
Prerequisites
BUS507 and BUS520
Required Text & Other Materials
Corporate Finance: Core Principles and Applications, Ross, Westerfield, Jaffe and Jordan, McGraw-Hill
Irwin Publishing, 4
th
ed. (3
rd
ed. also acceptable).

McGraw-Hill Connect (Required): Connect is a web-based assignment and assessment solution
required for this course, and is designed to assist you with your coursework, based on your needs.
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o Connect access codes may be packaged with a new textbook in the bookstore. Connect can also be
purchased online at our class sections Connect website (see Blackboard for the link).
o You can also register in Connect and have free access (without a code) to Connect for a limited trial
period (typically three weeks). You can then purchase the code within the three-week trial period.
o REGISTRATION: To register in Connect, please visit the Connect website (see link on Blackboard)
and click Register Now.
o SUPPORT & TIPS: If you have any issues while registering or using Connect, please contact
McGraw-Hills Customer Experience team through http://www.mhhe.com/support or at 800-331-
5094. To avoid problems related to unexpected technical issues, you are advised not to wait until
the last moment to complete assignments. Please see the document: http://highered.mcgraw-
hill.com/olc2/dl/866234/Connect_Student_Quick_Tips.pdf for further support.

A financial calculator is required for all class sessions and exams. I will demonstrate the use of the
Texas Instruments BA II Plus Professional calculator in class, and I highly recommend that you buy this
calculator. The manual that comes with this calculator provides you with very good examples and
detailed step-by-step explanation of how to use all of the functions of the calculator. It is your
responsibility to learn how to use your financial calculator. I advise you to do it AS SOON AS POSSIBLE!
Harvard Online Simulation: M&A in Wine Country, V2 (Required): Must be purchased by each student
via the following link (Cost is $15). https://cb.hbsp.harvard.edu/cbmp/access/28481573

PowerPoint lecture notes will be distributed via Blackboard.
Homework quizzes will be posted regularly on McGraw-Hill Connect, and must be completed online by
the deadlines given (see Connect for exact deadlines).
Grading
Homework Assignments (Connect): 15% of grade
Article/Section Presentation: 5% of grade
Team Case Study: 10% of grade
Team Research Project (Total): 15% of grade (7.5% presentation, 7.5% report)
Harvard Online Simulation: 10% of your grade (In order for your course grade not to be adversely
affected, you must make a solid attempt at completing all phases of
the simulation. An extra course grade bonus of 1%, 2% and 3% will
also be awarded to the top three students based on simulation score.)
Mid-term Exam: 20% of your grade (see schedule for date)
Final Exam: 20% of your grade (see schedule for date)
Class participation: 5% of your grade (appropriate and relevant participation during class
discussions and in-class presentations of other students).

Homework Assignments (Connect)
Homework assignments must be completed for each chapter via McGraw-Hill Connect, and will require
calculations, and knowledge of concepts and definitions. You are expected to work individually on the
assignments, and not as part of a team.
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Homework assignments related to the chapters that are covered fully in a given week are typically (not always)
due at 11:59pm on the following Sunday. For example, if one chapter is covered in Mondays class, and
another chapter in Wednesdays class, then the online homework assignment for both chapters will typically be
due the following Sunday at no later than 11:59pm. If you are not sure, please ask in class or consult the
Connect system for the assignment due dates. You will be able to check each of your answers (using online
link) exactly one time, prior to submitting the assignment on Connect.

Article/Section Presentation(s)
You will be required to present a mini-article or Textbook section as part of a student team (see below for a
list). In the first class session, each student will choose a team for the presentations. Lots will then be drawn to
assign presentations. Grading will consider professionalism, content, and presentation style equally.
Mini-Articles (called Real World in 3
rd
ed. & Finance Matters in 4
th
ed.) and Textbook Sections to be presented
All items to be presented are available in required RWJJ textbook (3
rd
ed. or 4
th
ed.)

Chap./Item # Title of Article/ Section Page 3
rd
ed. Page 4
th
ed.
Ch4: Jackpot! (Article) 100 97
Ch5: Beauty is in the Eye of the Bondholder (Article) 150 146
Ch6: How Fast is Too Fast (Article) 176 172
Ch7: The Practice of Capital Budgeting (Section 7.8 in both editions) 222-224 217-218
Ch10: The U.S. Equity Risk Premium (Section 10.8 in 3
rd
, 10.6 in 4
th
) 308-311 302-305
Ch11: Beta, Beta, Whos Got the Beta? (Article) 348 343
Ch12: The Cost of Capital, Texas Style (Article) 382 378
Ch15: Fin. Management and Bankruptcy Process (Sub. of 15.9 or 15.8) 483-484 475

Helpful Suggestions Regarding the Article/Section Presentations:
- Read the article/section from start to finish at least twice, preferably three times.
- Remember that you are not required to present all of the material in the article or section. Concentrate on
the major points and on some of the real-world examples used.
- You can include some charts and/or supplementary materials from outside sources (e.g. Internet) if you
like, but only if they are specifically related to the main points. Also remember to indicate clearly during
the presentation (i.e. reference) any outside sources you use.
- I will question the presenting team or make (clarifying) comments to class during and/or after the
presentation. Other students are also encouraged to ask questions during or after the presentations.
- Not including questions/comments, your presentation should last no more than 10 minutes. However, it
may take up to 15 minutes including comments/questions. You will be stopped promptly at the 15-minute
mark, so prepare accordingly.
- If you decide to use PowerPoint slides:
o Please give a copy of these as handouts (6 per page) to each student. Black & white copies are
acceptable.
o Make sure there are no more than 5-6 slides in the presentation (plan to spend about two minutes
on each slide). Therefore, if two people are presenting, each person should use about 2-3 slides,
and if three are presenting, each person should use 1-2 slides, etc.
And finally:
- Try to make the presentation interesting by using the real world examples in the article/section and
optionally, outside sources.
- Please practice your presentation skills (e.g. clear voice, confident posture, etc.) prior to presenting!
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Team Case Study
You will be expected to work in a team of your choosing (no more than two people per team), or individually,
to complete the following case study from the textbook:
Chapter 6: Stock Valuation at Ragan Industries (page 197 in 3
rd
ed., 194 in 4
th
ed.)
The case study carries 10% of the grade. Student reports of the answers/solution to the case will be due in
class at the start of the week (i.e. Monday) after the associated chapter is fully covered in class. Reports will be
graded competitively, i.e. relative to other teams in the class, and will be judged on the quality of the contents
as well as appearance. Therefore, please make sure your report is written neatly and legibly (if handwritten),
or typed (preferably); and does not contain spelling or grammar mistakes. In order not to lose points for your
(correct) answer, you must identify all of the major steps in your calculations. I also expect you to explain your
reasoning/thinking behind the calculation steps involved (if this is not clear in the calculations).

Research Project (Presentation & Report)
During the semester, you will be expected to work on a research project, either by yourself or with other
students. Projects will be graded competitively, i.e. relative to other projects in the class. The project can be
about any topic in corporate financial management that is covered in this our course, but you must clear your
topic with me first.
Presentation: The in-class presentation should concentrate on presenting and discussing your research and
findings within 20-25 minutes. Only one person from the team is expected to present, but I, and people from
other teams may ask any person on your team questions during the presentation regarding your topic. You are
expected to answer these as clearly and thoroughly as possible, but not necessarily during the presentation
itself. There will be a five to ten-minute time period after each presentation allotted for such questions.
Report: The project report should look professional, and include an executive summary, an introduction, a
middle section, and a conclusion. It should be about 8-10 pages (single-spaced), not including any appendices.
You are also encouraged to use figures, graphs or tables (not more than 5 or 6 altogether) to illustrate, support
and clarify your main points. In order to justify the inclusion of a particular table, figure or graph, your report
must refer to the data contained in this table, figure, or graph. You can place figures, graphs or tables, either at
the end or within the write-up itself. You must include a table of contents at the beginning of the report, and a
complete table of references (i.e. bibliography) at the end of the report that includes all of the sources referred
to in your report.
Important Note: You must be thorough in your analysis and persuasive in your arguments, in both the project
report and the in-class presentation. Use as much quantitative and other specific information (details) as
necessary to support your conclusions and/or arguments, but no more. Note that you are required to
synthesize the information you have gathered and to use this information to facilitate your numerical analyses
and to support your arguments. The research project is NOT supposed to be merely a collection of unrelated
facts, figures and/or dates of certain events. You must be able to make convincing connections between
events, companies, concepts, etc. In other words, I am just as interested in your thought process, as I am in
what you know, or have learned.

(Suggested) List of Topics for Project:
1. A study of a large corporation (it can be a Dow Jones or a Fortune 500 firm, or another well-known US
corporation) that involves a thorough analysis of the corporations financial situation in the past few years,
its current situation, as well as its future outlook. The analysis can include, but not be limited to cash flows,
financial ratios, stock price, and a thorough analysis of key events that drove changes in measures of
financial performance. Based strictly on your analysis, specific recommendations should also be made to
potential investors regarding whether they should buy or sell the stock.
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2. A review of the latest changes or trends in corporate finance (e.g. executive compensation, the manager-
shareholder conflict, corporate governance, cost of capital, capital investment decisions, capital structure,
etc.) Use specific numerical examples and data (including tables and charts) if possible to illustrate any
important key points/sections in your report. Also, relate your arguments to what we learned in the course
whenever possible.
3. A thorough estimation of the weighted average cost of capital (WACC) for a large US corporation, including
the estimation of unlevered betas, target capital (debt) structure, the risk-free rate, estimation of the
market risk premium, etc. Use the methods learned in the course as well as other methods (if applicable).
In addition, your report must include a comparison of your WACC estimate to that of other firms in the
same industry, and an analysis of the discrepancies/similarities. Remember, you will need lots of specific
details about the corporation, and to use what you have learned in the course (and possibly go beyond it).
4. Case study of a large corporation (must be a non-financial corporation, i.e. not a bank or investment firm)
that has experienced major financial troubles in its recent history (i.e. huge financial losses, stock price
declines, etc.), and the aftermath of its financial troubles. How did the firms managers respond to the
crisis? Was the response adequate and appropriate? Was it unexpected? What precautions could or
should the firms have taken to ensure the financial crisis did not reoccur? How has the financial health of
the firm actually changed since its financial troubles? If it changed for the better, was it due to unexpected
(fortunate) events (i.e. competitors suffered a loss, a highly successful product, etc.), or did specific
decisions of the CEO, shareholders, play a significant role? If the situation did not improve, why not?
Discuss in detail with lots of specific details (dates, names, etc.) and numerical data.
5. Other possible research ideas are also welcome, but you must clear the topic with me first.

Harvard Online Simulation (M&A in Wine Country V2)
In this multi-player simulation, students will play the role of a CEO at 1 of 3 publicly traded wine producers: Bel
Vino, Starshine, or International Beverage. Bel Vino and Starshine consider a merger-of-equals transaction
while International Beverage considers acquiring either Bel Vino or Starshine. Students review confidential
information to determine value and set reservation prices (Round 1) before negotiating deal terms (Round 2).
Stock prices rise and fall in reaction to the formal bidding process and help create a dynamic and competitive
negotiation environment. Subjects Covered: Financial negotiations; Mergers & acquisitions; Valuation; Value
creation
The simulation is entirely web-based and a built-in chat feature allows students to negotiate privately online.

Simulation Schedule:
Wed, Nov 5: In-class Session 1: Discussion of upcoming simulation.
o Debrief subjects: Rationale for Business combinations; Setting reservation prices; value creation
opportunities; Financial structure synergies; Next steps
o Students will be assigned to groups of two, and instructions will be given for upcoming play
Wed, Nov 5 (right after class): Round 1 (reservation price phase) begins: Students use financial analysis
and valuation methods to calculate & submit their reservation price. This takes place outside the
classroom.
Wed, Nov 12: (right before class): Round 1 ends: All reservation prices must be entered no later than
4:30pm on this day No exceptions!
Wed, Nov 12 (right after class): Round 2 (negotiation phase) begins: This is where the actual simulation of
the bidding process happens and where merger/acquisition deals are made. This takes place outside the
classroom.
Wed, Nov 19: In-class Session 2: Discussion & debriefing of the simulation: Discussing actual negotiations,
outcomes and lessons learned.
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Exams
There will be two exams, i.e. a mid-term and a final. The final is not cumulative. The mid-term exam will be
given in class during regular class time. I will tell you more about each exam as we get closer to the exam
dates. For each exam and assignment you are required to use a financial calculator, and optionally, four single-
sided (or two double sided) 8 11 sheets of notes and formulas. After your exams are graded, your grade
point score as well as your raw exam score will be posted on Blackboard.
Class Participation
For this class to be a success I need active and meaningful participation by students, and strongly encourage
such participation. Students who make frequent and meaningful contributions will earn the maximum number
of class participation points.

Office Hours, Appointments and Email Correspondence
My office hours (during regular semesters) and office location are listed on the first page of this syllabus. While
I am unable to meet outside of my office hours, I can answer any questions you have via email. To make sure
your email receives timely attention, please write Student BUS 536 in the subject field of your email.

Important Dates to keep in mind
First class: Aug 25; Last class: Dec 8
Last date to withdraw from this class: Wed, June 11
No class on: Sep 1 (Labor Day); Oct 13 (Fall Break), Nov 26 (Thanksgiving)
Electronic end of semester SEIs: Dec 1 10
Final exam: Dec 15, 5:00-7:00pm

Policies
Attendance and Absences: While I do not take attendance, I do ask that students attend every class and every
in-class presentation. Please note that you are responsible for obtaining any class materials and notes you did
not receive due to your absence. Students are personally responsible for obtaining any class materials and
notes they did not receive due to absences. Although attendance rarely affects your grade, missing a lot of
classes without a valid excuse (more than four), could adversely affect your overall grade.
Missed Exams, Quizzes, or Assignments, and Grade Changes: Make-up exams will not be given for missed
exams. If you miss the deadline for an online quiz, you will lose points for the quiz. Without a valid written
excuse, you will not receive credit for missed exams. If you have a valid written excuse for any missed exam,
the average of your other exams will be used to determine your missed exam score. Without a valid excuse, a
missed exam will receive a score of zero.
Cheating and plagiarism: Students are expected to maintain the highest standards of honesty in their college
work. Cheating, forgery, and plagiarism are serious offenses, and students that engage in any form of academic
dishonesty will be subject to disciplinary action (see http://www.newpaltz.edu/advising/policies_integrity.html
for college academic integrity policy). The School of Business Ethics Statement and Policy Regarding Unethical
or Dishonest Behavior are appended, and can be viewed online at:
http://www.newpaltz.edu/schoolofbusiness/adminacad_integrity.html and
http://www.newpaltz.edu/schoolofbusiness/adminacad_behavior.html.
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Information on electronic SEIs: students are responsible for completing the Student Evaluation of Instruction
(SEI) for this course and for all courses with an enrollment of three or more students. I value your feedback
and use it to improve my teaching and planning. Please complete the form online during the period shown
above, in the section: Important Dates to keep in mind.
Students with Disabilities: I make reasonable efforts to accommodate students with disabilities, including, but
not limited to, the scheduling of exams through the Disability Resource Center (DRC).

Course Schedule (continues on next page)
This schedule is tentative. Announcements will be posted on Blackboard if any changes occur.

Class Date Class Topics (in order) Source
1 Aug 25
Course Introduction and Assign teams
Basic Concepts (Chap 1, 2, 3): Please review on your own
(see Connect for practice and review material)


Connect
2 Aug 27 Discounted Cash Flow Valuation Ch 4
- Sep 1 Labor Day (no class)
3 Sep 3
Presentation: Ch4
Interest Rates and Bond Valuation (1)

Ch 5
4 Sep 8
Interest Rates and Bond Valuation (2)
Presentation: Ch5

5 Sep 10 Stock Valuation (1) Ch 6
6 Sep 15
Stock Valuation (2)
Presentation: Ch6

7 Sep 17 Net Present Value and Other Investment Rules (1) Ch 7
8 Sep 22
Chapter 6 Case Study Due (start of class)
Net Present Value and Other Investment Rules (2)


9 Sep 24
Presentation: Ch7
Making Capital Investment Decisions (1)

Ch 8
10 Sep 29 Making Capital Investment Decisions (2)
11 Oct 1 Making Capital Investment Decisions (3)
- Oct 6 Mid-Term Exam

12 Oct 8
Risk and Return Lessons from Market History (shortened)
Presentation: Ch10
Return and Risk: The Capital Asset Pricing Model (1)
Ch 10

Ch 11
- Oct 13 Fall Break (no class)
13 Oct 15 Return and Risk: The Capital Asset Pricing Model (2) Ch 11
14 Oct 20
Return and Risk: The Capital Asset Pricing Model (3)
Presentation: Ch 11

15 Oct 22 Risk, Cost of Capital, Capital Budgeting (1) Ch 12
16 Oct 27 Risk, Cost of Capital, Capital Budgeting (2)
17 Oct 29
Risk, Cost of Capital, Capital Budgeting (3)
Presentation: Ch12



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Course Schedule (continued from previous page)


Class Date Class Topics (in order) Source
18 Nov 3 Mergers and Acquisitions (1) Ch 21
19 Nov 5
Mergers and Acquisitions (2)
HBS Simulation: Introduction & pre-simulation discussion


20 Nov 10 Capital Structure: Basic Concepts (1) Ch 14
21 Nov 12
All reservation prices for Simulation to be submitted by
4:30pm, i.e. before class
Capital Structure: Basic Concepts (2)
- Negotiation round of simulation begins right after class



22 Nov 17
Capital Structure: Limits to the Use of Debt (shortened)
Presentation: Ch15
Ch 15
23 Nov 19 HBS Simulation: Post-simulation debrief/discussion
24 Nov 24 Project Presentations
- Nov 26 Thanksgiving Break (no class)
25 Dec 1 Project Presentations
26 Dec 3 Project Presentations
27 Dec 8 Project Presentations
28 Dec 15
Final Exam (Dec 15, 5:00-7:00pm)
(Project Report due by 5:00pm via Blackboard link)



SUNY New Paltz School of Business Ethics Statement
School of Business students are expected to maintain the highest standards of honesty in their college work. Cheating,
forgery, and plagiarism are serious offenses, and students that engage in any form of academic dishonesty will be subject
to disciplinary action. While we prefer to adhere to a code of honor in the School of Business, due to national trends in
cheating, forgery, and plagiarism, we are instituting this policy within the school. Any student found cheating, committing
forgery, or plagiarizing may suffer serious consequences ranging from failing a specific piece of work to failing the course.
In some cases, a student may be expelled from the School of Business and the college.
Your business education includes learning ethics and values. We trust that you have the basic foundation upon which we
can build. You will be judged by your character as well as by your knowledge and skills since the business world
increasingly demands ethical behavior of its employees. Honesty remains an admirable quality.
The academic integrity policy of SUNY New Paltz (http://www.newpaltz.edu/advising/policies_integrity.html) defines
cheating, forgery, and plagiarism as follows.
Cheating is defined as giving or obtaining information by improper means in meeting any academic requirements or in
other aspects of your professional conducts. The use for academic credit of the same work in more than one course
without knowledge or consent of the instructor(s) is a form of cheating and is a serious violation of academic integrity.
Forgery is defined as the alteration of forms, documents, or records, or the signing of such forms or documents by
someone other than the proper designee.
Plagiarism is the representation, intentional or unintentional, of anothers words or ideas as one's own. When using
another person's words in a paper, students must place them within quotation marks or clearly set them off in the text
with appropriate citation. When students use anothers ideas, they must clearly identify the source of the ideas.
Plagiarism is a violation of the rights of the plagiarized author and of the implied assurance by the students that when
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they submit academic work it is their own work product. If students have any issues with respect to the definition of
plagiarism, it is their responsibility to clarify the matter by conferring with the instructor.
Cases requiring disciplinary and/or grade appeal action will be adjudicated in accordance with Procedures for Resolving
Academic Integrity Cases, a copy of which is available in the office of the Vice President for Students Affairs, the office of
the Provost for Academic Affairs, and in the academic Deans' offices.
We, the members of the SUNY New Paltz School of Business community, are committed to practicing the highest
standards of ethical behavior and demonstrating integrity in all we do. We practice these standards and expect them to
be demonstrated by others not only in our business dealings, but in all our relationships. Ours is a culture of integrity.
For us, ethical behavior means adhering to certain standards in both public and private.

School of Business Policy Regarding Unethical or Dishonest Behavior
The school maintains a system (including software and web-based resources), by which students are well informed,
educated and required to acknowledge by electronic signatures, the ethics, honesty and integrity standards of the School
of Business, and the consequences of violating those standards. Instructors who identify any violators should report the
incident to the Deans office for disciplinary action. The following procedure is followed by the deans office for handling
such incidents.
Penalties:
The involved students may request an appeal through Academic Appeal Committee (undergraduate) or Graduate Council
(graduate students). First time offenders receive a failing grade for the course, which can only be changed based on a
favorable outcome of the appeals process, if applicable. The deans office keeps a list of first time offenders. The
offenders are also required to recertify their understanding of our ethics, honesty and integrity standards. A second time
undergraduate offender will be referred for possible dismissal to the Office of Student Affairs. A second time graduate
student offender will be dismissed from the Master's degree program in which he/she is matriculated, subject to review
by the Graduate Council.
Note: Once a student completes the training program, he/she shall be treated equally regardless of their previous
educational experience and cultural norms. Instructors are encouraged to remind students of our ethics, honesty and
integrity standards at the beginning of each course.