FIN 6425 – OMBA – Corporate Finance [COURSE OUTLINE]

INSTRUCTOR: DR. MAHENDRARAJAH NIMALENDRAN (NIMAL)

JOHN H. AND MARY LOU DASBURG CHAIR
PROFESSOR OF FINANCE

OFFICE: STZ 303C

PHONE: (352) 392-9526, FAX (352) 392-0301
EMAIL: FIN6425.PROF@WARRINGTON.UFL.EDU

Course Objectives and Goals

The objective of this course is to build on previous finance course(s) to solidify your
understanding of modern corporate finance and to broaden your knowledge of how the
concepts and models in finance are applied in practice. The course goes into greater depth on
topics covered in prior courses, introduces new concepts and theories, and applies the concepts
to actual financial decisions through cases. The following topics will be explored in detail.

 Corporate Objectives

 Governance, Performance Metrics and Compensations

 Valuation of bonds and stocks

 Cost of capital

 Capital Budgeting

 Capital Structure

 Payout Policies

 Raising Capital (Venture Capital, IPOs, and SEOs)

 Mergers & Acquisitions

 Special topics (Behavioral finance, Bankruptcy.)

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In covering these topics, I have five class goals.

 To solidify your understanding of modern corporate finance.

 To broaden your knowledge of how the concepts and models in finance are
applied in practice.

 To develop and extend your analysis and modeling (using spreadsheets/EXCEL)

skills.

 To develop and enhance your written, oral communications, and presentation

skills

 To strengthen your teamwork skills.

The course objectives are pursued through mini recorded lectures, assigned readings,
case assignments, individual assignments, presentations, discussion of important
developments in corporate finance as reflected in leading publications, and a final exam.

Required Material

The materials required for this course fall into three broad categories.

I. Background Reading and Review

a. Text (Recommended / optional): “Fundamentals of Financial Management,”

14th edition (Abbreviated "BH"), Eugene F. Brigham and Joel F. Houston,
Cengage Learning. You can also purchase the electronic version or the
“Cengage Unlimited” which gives electronic access to all their texts for one
semester.

b. Prerecorded mini-lectures: These lectures are broken up into modules and

topics that last about five to fifteen minutes. Generally, the lectures have
been arranged to provide a review of material covered in the cases or
material that will be required to be mastered. However, you must be aware
that the cases in general cover several topics.

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II. Individual Quizzes/Assignments

There will be three individual quizzes and one assignment which should be
completed by the assigned date. There will be NO extensions for the quizzes. The
individual quizzes/assignment will be posted online and you will take them
before the assigned date using the web link. The honor code will be strictly
enforced for all the quizzes and assignments.

III. Case Assignments

The course will mainly use cases supplemented with assigned readings and mini
recorded lectures. The strength of the case method is that it confronts you with
a realistic (or semi-realistic) problem that may be ill-structured, important data
may be missing and unobtainable, and the problem may not be well defined.
Imparting structure to the problem and learning how to make decisions without
having all the facts and data are some things that you will learn in this course.
Case solving expertise is an acquired skill and you will find that it could be very
frustrating and a painful process at the beginning. Expertise in analyzing cases
cannot be acquired by memorization or listening to others who have solved the
case. It requires independent thinking and grappling with the multidimensional
nature of the decision making process. Therefore, I urge you to actively
participate in solving, writing-up, and discussing the cases. Note that the cases
may cover material other than the main topic under review. It is your
responsibility to read up on other material that is relevant to the case.

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Team Case Assignments

There will be five team assignments that will be based on cases. The groups will be divided into
three sets (Set 1, Set 2, Set3), and each set of group will have the following case assignments. In
addition, there will be two other cases that will be discussed in class or on-line. These will count
towards your discussion points.

The groups for each set will be assigned on the first day of class.

Video
Peer Evaluation
Group or Report*/Online Presentation
Case of Video
Individual Quiz (10-12
Presentation**
minutes)*
Warren Buffett 2015 Individual Online quiz None None
The Boeing 7E7 Group All Groups None None
Target Group Sets 2 & 3 Set 1 Set 3
The Wm. Wrigley Jr. Group
Sets 1 & 3 Set 2 Set 1
Company
Mindersoft, Inc. Group Sets 1 & 2 Set 3 Set 2
Group Details of the case and requirements will be posted
Merger Negotiation
later

* Details on the report and presentation requirements will be posted on the course
website.
** Grading rubric will be posted on the course website.

Case Reports

Each team should submit only one report for the cases that are assigned. The
reports/presentations are due before twelve midnight on the assigned date. Peer
evaluation of the case will take place over a 4-day period following the submission of
the video presentation. It is important that everyone in the team participate in solving
and writing-up the case report.

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Peer Evaluation

At the end of the course, others in the group will evaluate the participation of each
member using a scale of 1- 5 (1=poor and 5=excellent participation/contribution), and
your group project grades will be reduced by 25% if your average participation
evaluation is between 2 and 3. It will be reduced by 50% if it is between 1 and 2, and by
100% if it is less than one.

WHY USE THE CASE APPROACH?

The most effective way for learning to take place is to actually be in real situations,
make decisions, deal with the consequences of those decisions, and learn from the
mistakes. Nothing will ever replace learning from experience. Cases (which involve real
situations although names may be changed) allow us to "simulate" real life situations
when we don't have the luxury of having years of experience. Cases allow us (to some
degree) to live with real situations, make decisions, and feel the consequences. Like
scientists in a laboratory, students of management use case problems and experiential
exercises as "laboratory" opportunities to experiment with real organizations in the
classroom setting.

Cases attempt to reflect the various pressures and considerations managers confront in
everyday organizational life. By using complex real world problems as a focus, cases are
designed to challenge you to develop and practice skills that will be appropriate to the
practical problems you will face in your career.

The case method is based on the learning principle that learning occurs most when
people teach themselves, through their own struggles. You will gain greater
understanding and improved skills in judgment when you work through a problem than
if you listened passively to a lecture. Similarly, there will be greater learning if you "use"
a theory than if you just heard about it. Therefore, cases have two basic uses:

1. helping you to learn how to apply theories to real situations

2. helping you to learn how to solve real problems

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Like real situations cases center around an array of partially-ordered, ambiguous,

seemingly contradictory and reasonably unstructured facts, opinions, inferences and
bits of information, data, and incidents out of which you must provide order by
selectively choosing which bits to use and which to ignore. In real life others won't do
this for us. As in real life situations, it is unlikely that any two people would assemble the
data or make inferences identically. You will have to work within the limitations
inherent in evidence and arrive at internally consistent interpretations. Experiencing the
process of learning this way may be frustrating and confusing, but it is also practical and
realistic.

Cases, as in real management situations, require you to work with the "as is" of reality,
not the "should be" of theory. Like managers you will have to exercise judgment which
can be improved by discussion and consultation with others. However, note that like the
manager, you will seldom be sure before your decision is made and often after it is
made, that you have made the right or "best" decision.

Like any manager, you will approach cases under time pressure, on the basis of limited
facts, and in the face of many unknowns. You will approach cases along with other
people who like you have idiosyncrasies and limitations, and different opinions.

In summary, cases have a number of benefits:

 they allow us to develop skill in thinking clearly about ambiguous, unstructured

situations using incomplete information;
 they help us to develop skills at recognizing what information is important and
what is missing;
 they help us to develop concise, reasonable, and consistent action plans;
 help you to identify implicit models and assumptions, values and goals you use
every day;
 they provide an opportunity to develop skills in presenting (written and oral) our
ideas to people and to groups; to influence and persuade others;
 Improve your ability to predict behavioral outcomes-yours and others.

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Final Exam

Your final exam will be similar to the questions assigned in the quizzes and the concepts and
models used to complete the cases. Hence, it is important for you to actively participate in
discussing and writing up cases. The exam will be comprehensive, and will cover material in
Modules 1 through 6. You will take the final exam when you come to Gainesville at the end of
the course. More information on the structure and content of the final exam is given in Module
7. Please take some time to browse this module.

Course Evaluation

Individual Quizzes/Buffett Assignments (4@25) 100

Case Presentation 75
Case Reports (3*75) 225
Case Merger Negotiation/report 100
Case Peer Review 50
Final Exam 400
Discussion/Online participation 50*
Total Points 1000
Score Grade
Total ≥ 940 A
900 ≤ Total < 940 A-
850≤ Total < 900 B+
800 ≤ Total < 850 B
700 ≤ Total < 800 B-
600 ≤ Total < 700 C+
500≤ Total < 600 C
Total < 500 C- /D..

*Discussions grades will be based on individual discussion posts. There will be 4 main
discussion topics. Each topic will have several sub-topics. You will need to post
comments on at least two main topics and five sub-topics (substantive) to earn the
maximum discussion points (each post will count for 10 points). More details of the
grading will be provided on the discussion board.

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Re-Grading of Assignments

I will be happy to re-grade any assignment that you feel is incorrectly graded. If you wish to
have an assignment re-graded, please submit the assignment to me with a note asking for a re-
grade. Include in your note a brief explanation of your reasons for a re-grade.

Office Hours/ Interaction

The main interaction will be via the discussion board. Depending on you, I can also
schedule office hours using Zoom or something similar. The email that should be used to
contact me is fin6425.prof@warrington.ufl.edu.

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The following is from the University Of Florida Code Of Student Conduct:

The academic community of students and faculty at the University of Florida strives to develop,
sustain and protect an environment of honesty, trust and respect. Students are expected to
pursue knowledge with integrity. Exhibiting honesty in academic pursuits and reporting
violations of the Academic Honesty Guidelines will encourage others to act with integrity.
Violations of the Academic Honesty Guidelines shall result in judicial action and a student being
subject to the sanctions in paragraph XI of the Student Conduct Code. The conduct set forth
hereinafter constitutes a violation of the Academic Honesty Guidelines (University of Florida
Rule 6C1-4.017).

Cheating is the improper taking or tendering of any information or material which shall be used
to determine academic credit. Taking of information includes, but is not limited to, copying
graded homework assignments from another student; working together with another
individual(s) on a take-home test or homework when not specifically permitted by the teacher;
looking or attempting to look at another student's paper during an examination; looking or
attempting to look at text or notes during an examination when not permitted. The tendering
of information includes, but is not limited to, giving of your work to another student to be used
or copied; giving someone answers to exam questions either when the exam is being given or
after taking an exam; giving or selling a term paper or other written materials to another
student; sharing information on a graded assignment

Plagiarism is the attempt to represent the work of another as the product of one's own
thought, whether the work is published or unpublished, or simply the work of a fellow student.
Plagiarism includes, but is not limited to, quoting oral or written materials without citation on
an exam, term paper, homework, or other written materials or oral presentations for an
academic requirement; submitting a paper which was purchased from a term paper service as
your own work; submitting anyone else's paper as your own work.

So that there is no confusion, here are my expectations:

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1. Students are strongly encouraged to work with their classmates or team mates to study,
work problems and cases, and prepare for classes and exams. The goal is to maximize your
understanding of the material.

2. Students are expected to include only their own work on the individual quizzes,
assignments, and final exam. On the team assignments, each team is expected to do its own
independent work. Cheating, as defined above, will not be tolerated.

3. Students are expected to contribute fully to each and every team assignment. Therefore, it
is not permissible, say, for a team to split the case assignment so that each member of the
team only contributes to part of an assignment. Each student is expected to be prepared to
discuss cases that are open for discussion.

4. Plagiarism, as defined above, is not acceptable.

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Library Resources

As a student at the University of Florida, you have free access to many of the online services
that usually require a subscription. However, you will either need to access these services
through a Library-related computer, or go through a “Proxy Server” using your GatorLink
account username and password. To access the online Business Library section of the Smathers
Library, go to

http://businesslibrary.uflib.ufl.edu/

On the right of the top line, click on Remote Logon. This will take you to a page that allows you
to connect to on-campus services using the Library Proxy Server:

http://www.uflib.ufl.edu/ufproxy.html

On the left of the screen, fill in your GatorLink Account Username and Password, and then click
Login. This will take you back to the Smathers’ Library page, by using the Proxy Server:

http://www.uflib.ufl.edu.lp.hscl.ufl.edu/ufproxysuccess.html

On the left of the screen you will see a dropdown menu under “UF Smathers Libraries”. Choose
“Business Library” from the dropdown menu. This will take you back to the online Business
Library, but through the Proxy Server:

http://businesslibrary.uflib.ufl.edu/

You could also click on “UF Libraries’ Home Page”, then “Business Library” under “George A
Smathers Libraries”.

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