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Commerce 2FB3 Managerial Finance
Summer 2025 Course Outline
Course Objective
The goal of this course is to give students a passion for finance and develop an understanding of the key concepts used in the business world. This course continues the introduction to modern business finance begun in Commerce 2FA3. The course balances theory, evidence and applications to prepare students for elective courses in finance and taxation and to provide some of the knowledge required to work effectively in the contemporary business environment.
Course Description
The course focuses on the various problems and decisions confronting the CFO of a corporation. The CFO’s decision making involves both short-term and long-term horizon, as well as both investing and financing choices. Major topics include raising long-term capital, cost of capital and capital structure, dividend policy, leasing, mergers and acquisitions, and working capital management. The course also looks into some of the behavioral aspects in finance and management. This course is taught through lectures, readings, and in-class discussions.
Course Learning Outcomes
This course is intended to provide students with a basic literacy in the problems and methods of modern business finance. During the lectures, the course will also discuss real world applications of the financial concepts that we cover. The course will, at every opportunity, discuss the ethical practices to be followed by a financial manager in the decision-making process.
Upon completion of this course, students should be able to:
Ø Calculate the cost of capital (WACC) of a corporate firm and evaluate firm value by using discounted cash flow (DCF) and Capital Asset Pricing Model (CAPM)
Ø Identify and evaluate various sources of financing for a business venture at various stages of its life cycle by considering flotation cost of VC financing, IPO, SEO, and rights offering
Ø Construct optimal capital structure for a firm by using capital structure theories
Ø Evaluate the complex dividend decisions that a CFO at a corporate firm faces by considering clientele effect, signaling and information content of a dividend announcement
Ø Examine the factors a corporate CFO considers in a merger decision (M&A) by using synergy and NPV of an M&A for the bidder and the target firm
Ø Apply financial derivative tools to manage financial risk of a corporate firm by creating hedging techniques appropriate for the risk profile the firm faces
Student knowledge, understanding and application of each of these ILOs will be assessed by weekly assessments (on Connect) and tests (midterm tests and final exam).
Course Learning Goals
The goal of this course is to give students a passion for finance and develop an understanding of the key concepts used in the business world. This course continues the introduction to modern business finance begun in Commerce 2FA3. The course balances theory, evidence and applications to prepare students for elective courses in finance and taxation and to provide some of the knowledge required to work effectively in the contemporary business environment.
Course Materials and Readings
Required textbook: Fundamentals of Corporate Finance with access to Connect*, Eleventh (11th) Canadian Edition;
McGraw-Hill Ryerson: ISBN- 13:978-1-26-088138-7
e-text is available
* You will need access to Connect which will be used for graded chapter quizzes and assignments
You should already have access to this book through Inclusive Access if you took 2FA3 in the past year – there’s no need for them to purchase again if you did not opt out.
Course Overview and Assessment
This course will be offered in person with live lectures twice per week. Tutorials (if any) will be held online. Our portal for the course will be Avenue to Learn with testing during class times and assignments due there regularly throughout the course.
Missed tests/exams will receive a grade of zero unless the student has submitted and been approved for a Notification of Absence or MSAF. Late assignments will be penalized 25% for each day they are late. Your final grade will be calculated as follows:
Components and Weights
Ten Homework Quizzes (2% each) See Avenue/Connect for Due Dates 20%
Midterm # 1 (July 8, during class time) 20%
Midterm # 2 (July 22, during class time) 25%
Final Exam (August 7, during class time) 30%
Total 100%
Course Deliverables
Quizzes
You will be expected to complete several brief quizzes worth 2% each in Connect which are to be solved individually.
Midterm Tests #1/#2 – Multiple Choice
There are two tests in this course that accounts for 25% of your final grade each. These have 20 – 40 questions each, covering material from the textbook, readings, lectures and class discussion. These are closed-book tests, but a one-page single sided ‘crib’ sheet is allowed. Under no circumstances should you collaborate with others (the penalties for academic dishonesty are severe). They will be organized in such a fashion that you will NOT be able to return to prior questions once they have been answered so be careful about which answers you select before moving on to the next batch of questions. You will have two hours to complete each test.
Final Exam
This exam will be cumulative. Like the mid-term tests it is also closed, but a one-page double sided ‘crib’ sheet is allowed. Like the tests, you will not be able to go back to change the answers to earlier questions.