LEE KONG CHIAN SCHOOL OF BUSINESS Year 2011/12 Term 2 FNCE201 Instructor: Tel: Email: Web: Office: Corporate

finance Section G3

Jerry CAO Assistant Professor of Finance 6828 0273 jerrycao@smu.edu.sg http://www.business.smu.edu.sg/faculty/finance/jerrycao.asp Lee Kong Chian School of Business, Level 4, Room 4046

COURSE DESCRIPTION This course continues the analysis of financial problems confronting the corporate financial manager, a theme that was begun in the introductory Finance course. The major objective of this course is to help students develop further understanding of current theories and their implications for solving financial problems. The major topics covered include wealth creation, the enhancement of shareholder value, managing corporate growth, corporate capital investments, capital structure policy, corporate payout policy, investment banking and capital raising, mergers and acquisitions, and corporate governance. Throughout the course, we will study the problems which corporations face in making investment decisions with an emphasis on valuation. Research results from recent empirical work, case studies, and their implications for corporations will also be discussed, where appropriate. LEARNING OBJECTIVES By the end of the course, students should be able to:

Value a company Understand how the market reacts to relevant corporate announcements Develop a workable capital structure policy Know how to avoid financial distress and bankruptcy Extract value from using an optimal mix of financing alternatives Formulate an effective working capital policy with sustainable growth Establish an appropriate corporate payout policy Appreciate good corporate governance Negotiate a merger or acquisition

Pre-requisite FNCE 101 FINANCE

Textbook Recommended but not required Fundamentals of Corporate Finance, by R. Brealey, S. Myers, and A. Marcus, McGraw-Hill Inc., 5th ed. Readings will be assigned occasionally and handed out in the class. Grade Assessment Method Mid-Term Exam: 20% Class Participation: 20% Group Project Presentation: 20% Final Project: 40% 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. INSTRUCTIONAL METHODS AND EXPECTATIONS Teaching Pedagogy Lectures; Case studies; Student presentations; Exercises; Project work Use of Financial Calculator No financial calculator is required. Use of Notebook Computer Notebook computers are not allowed in class or exam. Class Policies Attendance in all scheduled classes is required and expected. If for some reason you are not able to make it to class due to some emergency situation, you must inform your instructor at the earliest opportunity. An unexcused absence will adversely affect your class participation/attendance mark. Class participation is strongly encouraged and expected. Market discussions involve the highlighting of the pertinent major financial news items that have an impact on businesses, companies, investors, and financial markets. Group Research Project Presentation and Report Each team is responsible for the preparation and presentation of a research project, and should have 2-3 people. No team is allowed to have more than 3 people. The project must have a valid question and analysis needs to address the question in sufficient manner.

Exams: Exams are closed book and notes, and last 2 hours. There will be only Mid-term Exam and there will be no Final Exam. TEACHING ASSISTANTS (TA) CHEN Yijing [yijing.chen.2008@business.smu.edu.sg] OFFICE HOURS I will hold regular office hours (at least once a week). If you need to see me at any other times, please contact me to make appointment. My office and contact information are listed at the top of this course outline. I am also readily available by emails. CLASS SCHEDULE Week Concepts / Topics Covered No. Required Reading 1 Introduction of Corporate Finance 2 Debt vs. Equity 3 Capital Structure 4 Capital Budgeting 5 Raising Capital (IPO, SEO, Rights Issue) 6 Mergers and Acquisitions 7 Payout (Dividend, Repurchase) 8 Recess Week 9 Bankruptcy and Restructures 10 Mid Term Exam 11 Special Topic: Entrepreneurship,VC and PE 12 Special Topic: Corporate Governance 13 Project Presentation 14 Project Presentation (If needed) 15 Report Due Instructional Strategies Lecture Handout and Lecture Handout and Lecture Handout and Lecture Handout and Lecture Handout and Lecture Handout and Lecture Handout and Lecture Handout and Lecture Handout and Lecture Handout and Lecture