University of Hong Kong
FINA1310: Corporate Finance
Spring 2024
GENERAL INFORMATION
Instructor: Professor Alberto Moel (https://www.hkubs.hku.hk/people/alberto-moel/)
Office: KK 727
Office Hours: By appointment. Questions can be asked via e-mail any time.
Phone: 3917-1631
E-Mail : [email protected]
Class Hours:
2J: Mondays, 9:30–12:20, MB167 (except MB Grand Hall February 26)2K: Mondays, 14:30–17:20, TT4032L: Tuesdays, 13:30–16:20, TT404
Each class will consist of 3 50-minute sessions with two 10-minute breaks in between.
Teaching Assistant (FINA1310J): Jessie Leung
Office: KK 1026
Office Hours: Fridays 15:30-17:20 (Please make an appointment before coming).
E-Mail: [email protected]
Teaching Assistant (FINA1310KL): Yuanqi Xiong
Office: KK 1026
Office Hours: Fridays 12:30-15:20 (Please make an appointment before coming).
E-Mail: [email protected]
COURSE DESCRIPTION
This is an introductory finance course that develops the basic concepts and tools applicable to corporate financial decisions. Two main tasks of financial managers are studied: project evaluation and financing decisions. Specific topics include present value calculation, valuation of stocks and bonds, investment criteria and capital budgeting, risk and return, cost of capital, and capital structure. Corporate ethics is also incorporated in the discussions.
ACCT1101: Introduction to Financial Accounting. Mutually exclusive with STAT3904: Corporate finance for actuarial science.
READING MATERIAL
Textbook: Ross, Westerfield, Jordan, Lim and Tan, Fundamentals of Corporate Finance, Asian Edition, Second Edition, McGraw-Hill Education, 2016
OR Ross, Westerfield, Jordan, Lim and Tan, Fundamentals of Corporate Finance, 12th or 13th Edition, McGraw-Hill Education, 2021 or 2022
Supplementary readings: We may be assigning additional supplementary readings for some lectures. These will be available a few days on Moodle before each lecture so students can prepare.
ASSESSMENT
The grading breakdown will consist of approximately the following:
Group Assignments: 20%
Class Participation: 5%
Midterm Exam: 25%
Final Exam: 50%
GROUP ASSIGNMENTS (20%)
The group assignments aim to provide students with an opportunity to apply the analytical tools learned in this course. Students are required to form their own groups of between 1 and 5 members. There will be two group assignments, one before the Midterm Exam and one before the Final Exam. Details of the group project will be provided in a separate document.
MIDTERM EXAM (25%)
One mid-term test will be held during the term as part of the continuous assessment of the course. Since the course material taught is cumulative, students are encouraged to put timely and continuous effort into the course throughout the semester.
FINAL EXAM (50%)
The final exam will be held in the normal examination period. It is a comprehensive exam which covers all chapters and topics listed in the course outline. The objective of the final exam is to further enhance students’ understanding of the corporate finance concepts and theories and develop their ability to apply the knowledge in different business situations.
CLASS PARTICIPATION (5%)
Tutorials will start from week 3, and attendance in tutorial will be taken, which it will count towards the 5% participation grade. Sign-up details will be announced later on Moodle. Attendance in tutorial will be taken using the ‘Attendance@HKU’ app.
CLASS CONDUCT
Students are required to attend all classes on time. If you miss a class, it is entirely your responsibility for what you have missed. In case you must leave the class early, please
inform the instructor beforehand and leave quietly.
No use of mobile phone or chatting is allowed when the class is in session. Remember to turn off or mute the phone before each session. The instructor has the discretion to give penalty in case of class misconduct.
Respect your instructors and your fellow students. Be considerate to others.
ACADEMIC DISHONESTY
The University Regulations on academic dishonesty will be strictly enforced! Please check the University Statement on plagiarism on the web: http ://www.hku.hk/plagiarism/
Academic dishonesty is any act that misrepresents a person's own academic work or that compromises the academic work of another. It includes (but not limited to) cheating on assignments or examinations; plagiarizing, i.e., representing someone else's ideas as if they are one's own; sabotaging another's work.
If you are caught in an act of academic dishonesty or misconduct, you will receive an "F" grade for the subject. The relevant Board of Examiners may impose other penalty in relation to the seriousness of the offense.
PRELIMINARY COURSE OUTLINE
|
Session |
Date (week of) |
Topics |
Readings |
Remarks |
|
Session #1 |
January 15 |
Introduction and Course Outline Overview of Corporate Finance
Time Value of Money
|
Ross FCF Chapter 1
Ross FCF Chapter 5
|
|
|
Session #2 |
January 22 |
Discounted Cash Flow Valuation |
Ross FCF Chapter 6 |
|
|
Session #3 |
January 29 (TBD) |
Interest Rates and Bond Valuation |
Ross FCF Chapter 7 |
January 29 class may be via Zoom, pending class vote |
|
Session #4 |
February 5 |
Stock Valuation |
Ross FCF Chapter 8 |
|
|
Session #5 |
February 19 |
NPV and Other Investment Criteria |
Ross FCF Chapter 9 |
|
|
Session #6 |
February 26 |
Making Capital Investment Decisions |
Ross FCF Chapter 10 |
|
|
Makeup |
March 4 |
TBD |
|
Possible in-person makeup session, depending on Session #3 |
|
Midterm |
March 11 |
Midterm exam week of March 11 |
|
Date TBD |
|
Session #7 |
March 11 |
Project Analysis and Valuation |
Ross FCF Chapter 11 |
|
|
Session #8 |
March 18 |
Introduction to Risk and Return |
Ross FCF Chapter 12 |
|
|
Session #9 |
March 25 |
Systematic and Unsystematic Risk
Beta and the Security Market Line
|
Ross FCF Chapter 13 |
|
|
Makeup |
April 1 |
TBD |
|
Possible in-person makeup session, depending on Session #3 |
|
Session #10 |
April 8 |
Cost of Capital |
Ross FCF Chapter 14 |
|
|
Session #11 |
April 15 |
Raising Capital |
Ross FCF Chapter 15 |
|
|
Session #12 |
April 22 |
Capital Structure |
Ross FCF Chapter 16 |
|