2324FINA2010A
2324FINA2010A
Course Overview
When you start your business, you would have to answer the following three basic questions:
1. What long-term investments should you take on?
2. Where will you get the funding for your investment?
3. How will you manage your everyday financial activities?
The above three questions also apply to the financial manager of a corporation.
This course introduces you to the basics of financial management from the perspective of a financial
manager. It will be suitable for students who want to be a financial manager or those who want to
understand how financial decisions are made. Emphasis will be placed on the modern fundamentals
of the theory of finance and making the theory come to life with contemporary examples.
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Grade Distribution
For the past three years, the grade distributions are about:
A: 10%, A-: 20%, B+: 31%, B:18%, B-:9%, C+:6.5%, C:2.4%, C-:1%, D+ and D:0.5%
Grade Descriptors
A Outstanding performance on all learning outcomes.
A- Generally outstanding performance on all (or almost all) learning outcomes.
B Substantial performance on all learning outcomes, OR high performance on some learning
outcomes which compensates for less satisfactory performance on others, resulting in overall
substantial performance.
C Satisfactory performance on the majority of learning outcomes, possibly with a few weaknesses.
D Barely satisfactory performance on a number of learning outcomes.
F Unsatisfactory performance on a number of learning outcomes, OR failure to meet specified
assessment requirements.
Text
Fundamentals of Corporate Finance, 12th ISE edition), by Stephen Ross, Randolph Westerfield,
Bradford Jordan, Joseph Lim and Ruth Tan
Reading
The theory and practice of corporate finance: Evidence from the field by John R. Graham, Campbell
R. Harvey. Journal of Financial Economics 61 (2001)
Assessments
Assignments 20%
Midterm: 20%
Final: 60%
Tentative schedule*
Chapter Topic Date, 2023
1 Introduction to Corporate Finance Sep. 7
5 Introduction to Valuation: The Time Value of Sep. 14
Money
6 Discounted Cash Flow Valuation Sep. 21 , Sep. 28
8 Stock Valuation Oct. 5
Midterm Oct. 19 (to be confirmed)
7 Interest rate and Bond Valuation Oct. 12, Oct. 26
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9 Net Present Value and Other Investments Criteria Nov.2
10 Making Capital Investment Decisions Nov.16, Nov. 9 (congregation)
14 Cost of Capital Nov. 23
%
16 Financial Leverage and Capital Structure Policy Nov. 23
Final Nov. 30 (to be confirmed)
2# Financial Statement and Cash Flow
#
12 Some Lessons from Capital Market History
13# Return, Risk, and the Security Market Line
# Specific topics extracted from the chapters, may include flip-the- classroom components
% A brief account on this topic
* I reserve the right to adjust the contents and order of topics according to class progress
Grade Distribution
For the past three years, the grade distributions are about:
A: 10%, A-: 20%, B+: 31%, B:18%, B-:9%, C+:6.5%, C:2.4%, C-:1%, D+ and D:0.5%
Learning Activity
Students are expected to spend about five hours per week to revise materials and prepare
assignments.
Lecture (hr) Project / Case discussion (hr) Expected out-of-class activities (hr)
in / out class in / out class in / out class
3 Not Applicable 5
Study guidelines
PowerPoints of related chapters will be uploaded to CU E learning system
(https://elearn.cuhk.edu.hk) before classes. Students should not only study the PowerPoints as they
serve only a guideline on topics to be covered. Lectures and in-class examples will sometimes depart
from the PowerPoints. Students are responsible for reading the textbook and related materials.
Academic honesty
The Chinese University of Hong Kong places very high importance on honesty in academic work
submitted by students, and adopts a policy of zero tolerance on cheating and plagiarism. Any related
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offence will lead to disciplinary action including termination of studies at the University. Attention is
drawn to University policy and regulations on honesty in academic work, and to the disciplinary
guidelines and procedures applicable to breaches of such policy and regulations. Details can be
found at http://www.cuhk.edu.hk/policy/academichonesty/.