FINC574: Capital Structures and Payout Policy

Course Introduction

This course starts with the application of options in corporate finance. Next, it discusses the capital budgeting issues. Then it addresses three fundamental corporate financial issues. The first topic is related to raising capital. Second, is the capital structure, the mix of debt and equity the firm employs to finance its assets. Third, is the determination of appropriate payout policies, such as why and when to pay dividends; and the contrast between dividends and share repurchases.

Required Texts

Fundamentals of Corporate Finance Standard Edition with Connect Plus, 11th Edition (Links to an external site.)
Stephen A. Ross,  Randolph W Westerfield, Bradford D Jordan, 11^th edition,  ISBN10: 0077861701
ISBN13: 9780077861704

Calculator: Students are required to have a financial calculator. The instructor will be using the Texas Instruments BA II Plus Advanced Business Analyst. It is the students’ responsibility to be familiar with the functions of the financial calculator.

Course Schedule

This course runs from January 4th to February 28th, 2021

Review the course schedule for a weekly breakdown of course activities and assignments.

Communication

• Please use Gmail, not the Canvas Conversations/Inbox feature.
• Send all emails to Professor Yu.
• Be sure to include FINC574 and Section Number in the subject of all emails.
• You should generally expect a response within 24 hours. If you do not hear back within 24 hours, please resend your email.

Assessment and Grading

All activities must be completed within the dates specified in the weekly course schedule. Your overall grade in the course will be comprised of several components as outlined below:

Group Work: You are required to sign up for a group that you will work with for the entire semester. Each week you will rotate the Group Captain. The groups Captain is required to submit all group work for each exercise and case study.  The deadline to select a group is Tuesday January 5. 

• Weekly Homework Exercises: Each week you will have exercises that reflect the material covered in the lectures (Options and Corporate Finance, Net Present Value, Making Capital Investment Decisions, etc.). These exercises will be worked on in groups. Once each exercise is completed, the designated team captain (in rotation) will submit the results in his/her own handwriting (along with the MC answers) through Canvas. All steps and formulas must be shown for full credit. You can complete the exercise using Excel or Google Charts and can add a scan of the work or an image taken with your phone to support your work on each exercise. The exercises are due each Friday by Midnight. Refer to the Guidelines for more details.

The percentage point breakdown of each week’s homework assignment is as follows:
M1, M5, M6, M7, M8 – 3% each week.
M2,  M3 – 5% each week.
Total – 25% of grade.

• Mini-Case Studies: For each case study, all groups are required to provide the background of the company and industry, as well as the answers to the case questions.  The designated team captain (in rotation) is responsible to submit the work on time. The group grade is subject to change based on the peer review (see Guidelines for more details).

        The power point slides with audio should be concise and detailed. It should be not more 17 slides (including the cover page). The cover page should include the name of the team captain, members’ names, and title of the case study.

        Each team captain will introduce the presentation and cover page, then each member will record narration for their 4 slides. The narration should be limited to 2 minutes per slide and to 20 minutes for the entire presentation.

       If the average review is
-less than or equal to 1 : 0% of group grade for case studies
-between 1 to 2: 50% deduction from group grade for case studies
-between 2 to 3: 30% deduction from group grade for case studies

The percentage point breakdown of each week’s case study is as follows:
M2, M4,  – 3% each week.
M6, M8 – 5% each week.
M3,  M5,  M7 – 9% each week.
Total – 43% of grade.

Individual Work: All lecture discussions and the final exam will be completed individually.

• Exam Policy: Individual performance on these examinations accounts for 15% of your grade. The examination materials are based on materials covered in the lecture videos, notes and homework assignments. I do not accept and grade the submission in HEIC file. All students must take the exam on the scheduled date and time. No make-up examination will be given. You can review the University policies on academic integrity below.
• Weekly Lecture Discussions: Each week you are required to participate in a discussion of the Week’s lecture material, based on what you learned from the lecture. You will be asked to offer the key takeaways? You will also comment on at least 2 of your fellow classmate’s posts.

Group Peer Evaluation: At the end of the term you will review the contributions of each of your group members. This is intended to measure the value of contributions by each group member to the group assignments. Your group members will also be given a chance to evaluate your contributions to group work. A percent of your grade will be determined by the average evaluation your group members have given you. Each member should be responsible for approximately 20% of the work on each exercise.

Peer Review Assessment:
If the average review is

• less than or equal to 1, you will receive 0% of group grade for case studies
• between 1 to 2, you will receive a 50% deduction from group grade for case studies
• between 2 to 3, you will receive a 30% deduction from group grade for case studies

A 100 point system is used. At the end of the semester, the numerical grades earned for each written assignment will be averaged and translated into letter grades using the following formula.

Late Policy: No late assignments will be accepted. However, exceptions may be made in extraordinary circumstances with advance notice to the professor. No exceptions will be made for late discussion board submissions.

Attendance Verification: For financial aid verification, you will be considered to have attended the class in the first week if you engage with the material and/or instructor in some way (examples include submitting an assignment, quiz, or test, posting on a discussion board forum, etc.).

MSU Protocols & Resources

• Academic Honesty and Integrity (Links to an external site.): It is very important that you understand Montclair State University’s policy on academic honesty and integrity. The link above provides you with resources to understand what academic standards and plagiarism are and to learn how to take a course responsively and honestly to avoid plagiarism.
• Student Rights and Responsibilities:  (Links to an external site.)Find out more about your rights to access the university’s resources as well as your related responsibilities.
• MSU Library (Links to an external site.): The Harry A. Sprague Library is an online resource repository all students may use to search for articles, journals, and other academic texts.

Commitment to Accessibility

Students with disabilities or special circumstances should contact your instructor as soon as possible to ensure that your needs are met in the course. Reasonable accommodations are available for students with a documented disability. If you have a disability and may need accommodations to fully participate in this class, please contact the Disability Resource Center (Links to an external site.) (DRC at 973-655-5431).