ECO359H1F. Financial Economics II
Course Information
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Class Times: |
Tuesdays. Section L0101: 2-5pm. Section L5101: 5-8pm.
Specific Lecture/Tutorial Breakdown TBA.
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Class Location: |
WI 1017 (both sections). |
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Term Tests: |
In-class on February 09 and March 22.
Section L0101: 3-5pm. Section L5101: 5–7pm
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Test Location: |
TBA (may be different from your lecture rooms!) |
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Instructor: |
Professor Malinova. |
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My office: |
Max Gluskin House 211 (GE 211), 150 St. George Street. |
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Phone: |
416 978 5283. |
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Email: |
[email protected]a |
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TAs: |
TBA |
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Office Hours: |
Tuesdays 11-noon (Professor Malinova, GE 211); some exceptions.
TA hours: TBA.
Regular office hours are held only in term (through April 08),
except for the weeks of your term tests and the fall break.
Please see portal for the office hour schedule during the weeks of
your term tests and during the study and exam period.
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Course Webpage:
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http://portal.utoronto.ca (not yet fully operational)
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Exclusions:
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ACT349H1,RSM332H1.
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Prerequisite:
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ECO358.
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Tests, Exams, and Grade Composition
40% × final+ 30% × max{midterm I,midterm II}+ 30% × max{final, min{midterm I, midterm II}}.
If both of your midterm scores are below 30% or if your score on the final exam is below that of your worst midterm, then no weight redistribution will occur.
Appeals. If you appeal to re-grade one of the exam questions, we will re-grade the entire exam. This may lead to a lower or higher overall grade. Your complaint has to be in writing, it must be submitted within two weeks from the day that graded midterms become available for pick up, and it must explain why you believe grading to be incorrect. These conditions do not apply to clerical errors (i.e. adding your scores incorrectly); if a clerical error occurs, please notify Professor Malinova as soon as possible.
Midterm Tests
Dates: The midterms will be written during class. The first midterm will take place on February 09 (in class, 3-5pm and 5-7pm), the second takes place on March 22 (again, in class, 3-5pm and 5-7pm). Exam room locations will be announced in class and on the course webpage. Important: the test locations may differ from your regular classroom locations!
Term Test Coverage: If a concept, skill, or topic is addressed in lectures, readings, or on Blackboard, then it is testable. Additionally, you are required to follow current events.
Missing a Midterm Test:
Midterms are crucial components of our course, and they are compulsory. A missed midterm counts as 0.
When you miss one midterm for legitimate reasons, I will shift the weight of the missed midterm to the final exam. To receive this accommodation, please provide Professor Malinova with the relevant supporting documentation within one week of the missed test. In the event of an illness, you must provide a medical note (original, not scanned or e mailed). The only accepted note be a fully completed University of Toronto Verification of Student Illness or Injury form. See http://www.illnessverification.utoronto.ca for details. The form must be completed by a qualified medical doctor or nurse practitioner (e.g., not an acupuncturist, chiropractor, or other health care professional); the doctor’s OHIP registration number must be provided.
Problem Sets
Textbook:
Tentative Course Structure
Note: the literature references below are to chapters in Berk et al. literature reference will be updated on Blackboard as the term progresses. Several lectures may be based solely on lecture notes with little or no textbook reference.
Week 1 Introduction. Basic principles of Valuation. NPV & Alternative Rules of Investment. Ch. 1,3,8.
Week 2 Fundamentals of Capital Budgeting: forecasting earnings and estimating free cash flows. Ch. 9.
Week 3 Estimating the cost of capital. Ch. 12. Capital Structure in a Perfect Market. Modigliani-Miller Theorems. Ch. 17.
Week 4 Capital Structure (cont’d). Capital Structure Decisions with taxes. Ch. 17, 18.
Week 5 Midterm I.
Week 6 Capital Structure Decisions with taxes (cont’d). The effect of Financial Distress, Managerial Incentives, and Information on Capital Structure. Ch. 18,19.
Week 7 Financial Distress, Managerial Incentives (cont’d). Payout Policy. Ch. 19, 20.
Week 8 Capital Budgeting and Valuation with Leverage. Ch. 21.
Week 9 Practical Considerations & Empirical Evidence on Capital Structure Choices. Using Real Options in Valuation Decisions. Ch. 16.
Week 10 Midterm II
Week 11 Long-Term Financing, focusing on Raising Equity Capital & Initial Public Offerings (IPOs). Ch. 23.
Email Communication
U-of-T-email-address!
If you have a question that is not addressed in any of the course materials, please send an e-mail to one of our TAs (emails TBA). Where a question cannot easily or briefly be answered with a reply email (e.g., it requires that we solve a lengthy practice problem prior to responding), we will indicate to you that we will need to chat during the announced office hours.
We aim to reply to legitimate email inquiries from students within 24 hours during the week; e-mails received on Friday night, during the weekend or during a holiday will be filed for reading on the next business day. If you do not receive a reply within 2 working days, please resubmit your question(s).
If not using the Blackboard system, please include in the “subject” the course number and please include you full name and your student number in the body of your message. Please do NOT send any attachments with your email messages.
Information about the Blackboard System
Like many other other courses, ECO358 uses Blackboard for its course website. To access the ECO358 website, or any other Blackboard-based course website, go to the UofT portal login page at portal.utoronto.ca and login using your UTORid and Password.
If you experience any problems, please check the Blackboard’s information page for stu dents, located at http://portalinfo.utoronto.ca/content/information-students
Academic Integrity and Respect
individual academic achievement, and will continue to receive the respect and recognition it deserves.
Familiarize yourself with the University of Torontos Code of Behaviour on Academic Matters (http://www.governingcouncil.utoronto.ca/policies/behaveac.htm). It is the rule book for academic behaviour at the U of T, and you are expected to know the rules. Potential offences include, but are not limited to:
The University of Toronto treats cases of academic misconduct very seriously. All sus pected cases of academic dishonesty will be investigated following the procedures outlined in the Code. The consequences for academic misconduct can be severe, including a failure in the course and a notation on your transcript. If you have any questions about what is or is not permitted in this course, please do not hesitate to contact me. If you have questions about appropriate research and citation methods, seek out additional information from me, or from other available campus resources like the U of T Writing Website. If you are experiencing personal challenges that are having an impact on your academic work, please speak to me or seek the advice of your college registrar.
Finally, you are expected to respect your classmates and me. For example, during lecture do not chat, surf the Internet, read the newspaper, sleep, eat nor engage in anyother disruptive behaviours.