ÉCOLE DE GESTION TELFER SCHOOL OF MANAGEMENT

Corporate Finance
ADM 3350 A, B & C FALL 2022
Professor Dr. Kaouthar LAJILI, Ph.D., CPA, CGA
DMS 7162
Office

Tel. 562-5800 ext. 4736 (office)

E-mail lajili@telfer.uottawa.ca

Office Hours Wednesdays: 3:00 – 4:30 pm (and/or by appointment)

Section A : DMS 1110
Class
Location Section B : DMS 1130

Section C: VNR 3035 (Tuesdays) & FTX 133 (Fridays)

Wednesdays 1:00-2:20 PM & Fridays 11:30 AM-12:50 PM (sec. A)

Class Hours
Mondays 7:00-9:50 PM (sec. B)
Tuesdays 11:30 AM-12:50 PM & Fridays 1:00-2:20 PM (sec. C)
Prerequisite(s) ADM 2350
Choose between the three choices below:
Program of
study
BCom mandatory course

Mandatory course of option ___A&F_____ or specialization

___Accounting & Finance_____

Optional course of option __________ or specialization __________

COURSE EVALUATION: section B: Nov. 21; section C: Nov.22; & section A: Nov.23
(20 minutes in-class evaluation)
 Weight on Final
Course Deliverable Due Date
Grade
Monday, Oct. 3 (sec. B); Tuesday, Oct. 4
Assignment #1 7.5%
(sec. C); Wednesday, Oct. 5 (sec. A)

Monday, Nov 28 (sec. B); Tuesday, Nov.

Assignment #2 7.5%
29 (sec. C); Wednesday, Nov. 30 (sec. A)

80 minutes exam
Midterm Exam 40%
(In person) Monday, October 17th (sec. B)

Tuesday, October 18th (sec. C)

Wednesday, October 19th (sec. A)

Final exam
Final Exam 45%
(In person) (non-cumulative, covers post midterm part
only)

2
COURSE DESCRIPTION
The purpose of this intermediate corporate finance course is to follow up on the first introductory
course in financial management. It is intended to refine and deepen students’ knowledge of the
theory and practice of financial decisions in a rapidly changing corporate and business
environment. The course material will evolve around three major problems/decisions faced by
financial managers:

• Short-term Capital Management (e.g., credit management)

• Capital Structure Analysis (e.g., optimal debt/equity mix and long-term sources of capital)
• Dividend Policy (e.g., management decisions to pay out earnings to the firm shareholders)

Additional important topics covered include leasing decisions, mergers and acquisitions, as well
as an introduction to derivatives use and risk management.

The course delivery is based on lectures (theory presentation, explanation and examples)
followed by integrative practice problems summarizing main points and testing students’
understanding and skills acquisition. Relevant mini-cases, financial news articles, short video
segments are usually used at the beginning of each chapter to provide real-world examples and
context for the importance and relevance of the topics and decisions addressed in each specific
chapter.

COURSE CONTRIBUTION TO PROGRAM LEARNING GOALS

In this section, please explain how your course contributes to the attainment of one or more of the
following B. Com Learning Goals:

LG1 Understand, Apply and Integrate Core Management Disciplines

The course focuses on the connections between finance and accounting and applies and
integrates the core theory principles of sound financial decision making. Students are
introduced to complex financial decisions first through introductory mini-cases and
relevant video segments, then the focus is on explaining the theory supporting sound
financial decision making in each area (e.g., debt/equity mix choice, dividend policy,
short term financial management).

LG2 Demonstrate Critical Thinking and Decision-Making Skills

The course is built on extensive practice problems conducted in class after completing
each chapter and where students have a chance to apply the core theory concepts
introduced in the chapter and test their knowledge about technical and analytical
decision-making skills with respect to important financial decisions at the firm level.

3
 LG3 Demonstrate Leadership, Interpersonal and Communications Skills

LG4 Apply high standards of Integrity, Ethics and Social Responsibility

LG5 Unlock the value of globalization

LG6 Pursue Self-Development and Exhibit a Commitment for Life-long Learning

LG7 Provide Value to the Business Community in a chosen Area of Specialization

COURSE LEARNING OBJECTIVES

By the end of the course, students will be able to use course concepts and techniques to analyze
and solve different financial decisions. The decisions relate, among other things to capital
structure decisions, dividend policies, short-term financial management, leasing, mergers and
acquisitions, and basic risk management. Students are expected to gain the skills of analyzing
more complex questions in financial management and to be able to come up with sound solutions
using the techniques and concepts covered throughout the course. A constant focus on financial
decisions and their implications on the market valuation of the firm will be maintained.

EXPECTATIONS FOR COMMUNICATIONS

I prefer email for communications. Please ensure that you have set up your Brightspace account
to receive notifications of announcements to your uOttawa email address. Please use my email
(lajili@telfer.uottawa.ca) for all communications related to our course. Likewise, I ask that you
use your uOttawa.ca email address for sending messages. These email addresses are less likely to
be “hacked” than other emails which means that we have extra assurances of the security of our
communications.

METHODS USED TO EVALUATE STUDENT PERFORMANCE

Corporate Finance has a predominant technical component and the best way to learn how to use
the concepts and techniques is to work and re-work problems. For this reason, several practice
problems have been selected to acquaint you with working with concepts, methods and
problem/decision situations using the tools you learn in class. These practice problems are not
part of the evaluation for this course, but it is strongly recommended to go over them as they will
help you learn the material better by providing good examples for the midterm and final exams.
Most of these practice problems are selected problems from the textbook which will be solved and
discussed weekly in class as each chapter is completed.

4
There will be two sets of homework assignments each worth 7.5% of your final grade submitted
by groups of 3 to 4 students that will be evaluated for this course and scheduled for submission
as shown on the course calendar below.

The midterm (worth 40%) and the final exam (worth 45%) will test your understanding and ability
to work and solve technical financial problems (like homework problems) along with some
multiple-choice questions.

If you must miss the exam due to illness, you must notify the undergraduate office as soon as
possible and get approval to have the weight of the midterm exam transferred to final exam.

Please note that it is not possible to submit extra course work in order to improve your mark.

TEXTBOOK/COURSE PACKAGE

COURSE MATERIALS WHERE TO GET IT

Corporate Finance, by Ross, Westerfield, Jaffe, & Driss (Ninth Campus bookstores
Canadian Edition) McGraw-Hill, 2022
(e-book option available)

Posted and available on

Power point slides
Brightspace

5
 Course Schedule
Week # Lecture Topic and objectives Reading Assignment
Problems:
selected problems will be
solved in class

1&2 Short-term Finance & Credit

(Week of Sept. 7 & Sept. Management Reading: Ch. 27 & Ch.29
12) Optimal short-term financial policies
Credit analysis, components of credit
management, alternative credit
policies

Capital Budgeting Under Risk: Reading: Ch13 (skip

3 Review of cost of capital, capital sections 13.2; 13.3; 13.6
(Week of Sept. 19) budgeting under risk, firm and and 13.7)
project risks, investments and project
selection rules under risk

4&5 The Financing Decision and Reading: Ch. 16

(Week of Sept.26 & Oct. 3) Capital Structure: Basic Concepts
The choice of available sources of
capital, optimization of capital mix to
maximize firm value, effects of
capital structure on the average cost
of capital

1st homework assignment set due

Monday, Oct. 3 (sec. B); Tuesday,
Oct. 4 (sec. C); Wednesday, Oct. 5
(sec. A)

6 *** Summary of first part &

(Week of Oct. 11) Midterm Exam review***
Oct. 10 No class
(Thanksgiving)

6
 7
(Week of Oct. 17)

Midterm Exam (in person 80 minutes long)

Monday, October 17th (sec. B)
Tuesday, October 18th (sec. C)
Wednesday, October 19st (sec. A)
Midterm exam will cover the first 6 weeks of material. Exam material includes short-term finance
and credit management, capital budgeting under risk, and capital structure (Ch.16 only)

A list of formulas will be available and posted beforehand. Students remain responsible for
knowing the use of the formulas to answer specific questions in the exam.

(Week of Oct. 24 - 28) STUDY BREAK/READING

WEEK
(no classes)

Capital Structure: Limits to the Reading: Ch. 17 (skip

9 use of debt sections 17.5, 17.6, 17.8
(Week of Oct. 31) Theory of capital structure, effect of and 17.9)
leverage on cost of equity, effect of
taxes on firm value for different
leverage choices, Reasons for
optimal capital structure, bankruptcy
costs, taxes and firm value, empirical
issues

10 Dividend and other payouts: Reading: Ch. 19

(Week of Nov. 7) Theories and types of dividend
policies, effects of dividends on
accounts and stock price, alternatives
to cash dividends and their effects on
firm value, empirical issues

11 Mergers and Acquisitions: Reading: Ch. 30

(Week of Nov. 14) Mergers and acquisitions as an
alternative to internal development,
analysis of costs and benefits, M&A
valuation and NPV methods

7
 12 Leasing: Reading: Ch. 22 (skip
(Week of Nov. 21) Types of leasing arrangements, effect sections 22.5 and 22.7)
of leases on financial statements and
leverage, cash flow effects of leasing,
analysis of the leasing decision

13 Introduction to Derivatives: Reading: Ch. 23 (stop at p.

(Week of Nov. 28) Options Basic Concepts 644 (stop at Black-Scholes
Basic definitions of options and stock section) + posted notes)
options, call/put options, valuing
options,
Risk management and hedging:
preliminary concepts

2nd homework assignment set due

Monday, Nov 28 (sec. B); Tuesday,
Nov. 29 (sec. C); Wednesday, Nov.
30 (sec. A)

14 Options and Corporate Finance The final exam is not

(Week of Dec. 5) (cont.) cumulative and covers only
***Final Exam Review*** the material since the
Final exam dates and
Review and course wrap-up. midterm exam. A formula
location for this course will
Adjustment for possible schedule sheet will be provided again
be known towards the mid-
slippage for the final exam
end of the term
beforehand with the same
(In person Final Exam) Final exam as scheduled conditions as for the
midterm

8
COURSE POLICIES
COURSE CONDUCT
The Telfer School of Management prides itself on a strong sense of shared values drawing upon
principles of respect, integrity, professionalism and inclusion to guide interactions inside and
outside the classroom. The Telfer School strives to provide a well-rounded and outstanding
education enriched through experiential learning and a positive student experience. You are
encouraged to familiarize yourself with our expectations related to course conduct at the Telfer
School. Please refer to our Statement of Shared Rights and Responsibilities.

PREVENTION OF SEXUAL VIOLENCE

The University of Ottawa is committed to a safe and healthy campus for work, for study and for
campus community life for all members of the University community. The University, as well as
various employee and student groups, offer a variety of services and resources to ensure that all
uOttawa community members have access to confidential support and information, and to
procedures for reporting an incident or filing a complaint. For more information, please visit
uOttawa Sexual violence: support and prevention.

CLASS ATTENDANCE
Class attendance is expected and is necessary to successfully complete this course.

Students are expected to write (or submit) all course deliverables as scheduled according to this
Course Outline. Absences for reasons listed in academic regulation 9.5 (with the appropriate
documented justification) are the only acceptable reasons for failure to hand-in or complete a
requirement of this course at the specified time. THERE WILL BE NO EXCEPTIONS. For a missed
mid-term or final examination, documentation must be submitted along with a deferred exam
application form to the Student Services Centre (DMS1100) of the Telfer School of Management.

Please visit the following webpage to download the form and carefully read the directives.

For other missed deliverables, the appropriate documentation can be submitted directly to the
Professor.

LANGUAGE & WRITING

You will be judged on your writing abilities on all written deliverables. It is recommended to take
the appropriate measures to avoid mistakes such as spelling, syntax, punctuation, inappropriate
use of terms, etc.

Professors show a marked bias for a movement from theory/definition (textbook, supplementary
readings, class discussion) to your own words to a concrete example. In other words, make a
clear reference to an accepted theoretical foundation, then explain it in your own words and

9
then provide a concrete example to support your idea (from a case study, from a class
discussion, from a real life situation that you have observed, from history,…).

In the event of poor language quality, you may be penalized up to 15% to the professor’s
discretion. Please see the “Error! Reference source not found.”.

Regulation 8.5
Except in programs and courses for which language is a requirement, all students have the right
to produce their written work and to answer examination questions in the official language of
their choice, regardless of the course’s language of instruction.

LATE SUBMISSIONS
Late submissions are not tolerated. Exceptions are made only for illness or other serious
situations deemed as such by the professor.

ABSENCES FROM EXAMS

University regulations require all absences from exams/quizzes and all late submissions due to
illness to be supported by a relevant documentation.

Absence for any reason must be justified in writing, to the Student Services Centre
(undergraduate@telfer.uottawa.ca) within five business days following the date of the exam.
Please visit the following webpage to download the deferral request form and carefully read the
directives. The Telfer School reserves the right to accept or refuse the reason.

Modification to academic regulation 9.5. on absence to course evaluation: As of September 1st,

students will only be permitted to defer one deliverable per course. Should you miss the midterm
for a reason approved by the SSC, you will not be allowed to defer another course deliverable. This
also applies to any deliverable for which a weight transfer is possible. Exceptions could be made,
but it will be at the discretion of the SSC, and each request will be evaluated on its own merit.

Religious absences: If a religious holiday or a religious event will force you to be absent during an
evaluation, it is your responsibility to inform your professor and the Student Services Centre as
early as possible.

INTELLECTUAL PROPERTY
All forms (printed, digital, etc.) of course materials prepared by the instructor (including e-mailed
or Brightspace content) are protected by copyright. This covers all files, assessments, solutions,
cases, and other materials. Copying, scanning, photographing, posting, or sharing by any means

10
is a violation of copyright and will be subject to appropriate penalty as prescribed by University
of Ottawa regulation.

ACADEMIC INTEGRITY
Academic Regulation 14 defines academic fraud as “any act by a student that may result in a
distorted academic evaluation for that student or another student. Academic fraud includes but
is not limited to activities such as:

a) Plagiarism or cheating in any way;

b) Submitting work not partially or fully the student’s own, excluding properly cited
quotations and references. Such work includes assignments, essays, tests, exams,
research reports and theses, regardless of whether the work is written, oral or another
form;
c) Presenting research data that are forged, falsified or fabricated;
d) Attributing a statement of fact or reference to a fabricated source;
e) Submitting the same work or a large part of the same piece of work in more than one
course, or a thesis or any other piece of work submitted elsewhere without the prior
approval of the appropriate professors or academic units;
f) Falsifying or misrepresenting an academic evaluation, using a forged or altered
supporting document or facilitating the use of such a document;
g) Taking any action aimed at falsifying an academic evaluation.”1

The Telfer School of Management does not tolerate academic fraud. Please familiarize yourself
with this guidance.

STUDENT SUPPORT SERVICES

Academic GPS

The Academic GPS hub is a one-stop shop for academic support. Whether you’re an experienced
student or just starting out, you’ll find some great resources to help you succeed.

With the Academic GPS, you can:

• chat with a mentor seven days a week
• register for study groups
• take part in study methods workshops (note taking, time management, exam
preparation, stress management, etc.)
• book an appointment with a mentor

For more information: https://gps-uottawa.ca/en

11
Health and Wellness
Your health and well-being are key parts of your success as a student. The uOttawa community provides a
wide range of services, supports and activities to support you in your wellness journey.

Visit uOttawa.ca/wellness. to access resources such as:

• Access to 24/7 help

• Mental health and counselling information
• Medical, health and insurance information
• Campus activities and workshops
• Peer support 7 days a week (virtual Peer Wellness Chat)
• Wellness Lounge
• And so much more…

You can also access the Student Health and Wellness Centre, exclusively open to University of Ottawa
and Saint Paul University students. The centre is staffed by a multidisciplinary team of health
professionals, including physicians, nurse practitioners, registered nurses, health promotion specialists
(education), psychotherapists, a psychologist and psychiatrists working together in a shared care model.

You can book your appointment with a health practitioner in person at 801 King Edward, Room N203, by
calling 613-562-5498, by using the web portal, or by downloading the UpPatient app. All this information
and more is available at uOttawa.ca/wellness.

Academic accommodations
We try to make sure all students with disabilities have equal access to learning and research
environments, the physical campus and University-related programs and activities. The
Academic Accommodations service works with other campus services to create an accessible
campus learning environment, where students with disabilities have an equal opportunity to
flourish. We offer a wide range of services and resources, provided with expertise,
professionalism and confidentiality.

Some services we offer

• Help for students with disabilities in making the transition
• Permanent and temporary accommodation measures
• Learning strategy development
• Adaptive exams
• Transcriptions of learning material
• Interpretation (ASL and LSQ)
• Assistive technologies

12
If you think that you might need any of our services or supports, email the Academic
Accommodations service (adapt@uOttawa.ca).

OTHER U OTTAWA SERVICES THAT YOU MIGHT FIND USEFUL

• Career Services:
o Telfer Career Centre
o U Ottawa Career Services
• Counselling Service

PERSONAL ETHICS STATEMENT CONCERNING TELFER SCHOOL

ASSIGNMENTS
Group Assignment:

By signing this Statement, I am attesting to the fact that I have reviewed not only my own work, but the
work of my colleagues, in its entirety.

I attest to the fact that my own work in this project meets all of the rules of quotation and referencing in
use at the Telfer School of Management at the University of Ottawa, as well as adheres to the fraud policies
as outlined in the Academic Regulations in the University’s Undergraduate Studies Calendar Academic
Fraud Webpage.

To the best of my knowledge, I also believe that each of my group colleagues has also met the rules of
quotation and referencing in this Statement.

I understand that if my group assignment is submitted without a signed copy of this Personal Ethics
Statement from each group member, it will be interpreted by the Telfer School that the missing student(s)
signature is confirmation of non-participation of the aforementioned student(s) in the required work.

______________________________ __________________________

Signature Date

______________________________ __________________________

Last Name (print), First Name (print) Student Number

______________________________ __________________________

Signature Date

______________________________ __________________________

Last Name (print), First Name (print) Student Number

13
______________________________ __________________________

Signature Date

______________________________ __________________________

Last Name (print), First Name (print) Student Number

______________________________ __________________________

Signature Date

______________________________ __________________________

Last Name (print), First Name (print) Student Number

______________________________ __________________________

Signature Date

______________________________ __________________________

Last Name (print), First Name (print) Student Number

Personal Ethics Statement

Individual Assignment:

By signing this Statement, I am attesting to the fact that I have reviewed the entirety of my attached work
and that I have applied all the appropriate rules of quotation and referencing in use at the Telfer School of
Management at the University of Ottawa, as well as adhered to the fraud policies outlined in the Academic
Regulations in the University’s Undergraduate Studies Calendar Academic Fraud Webpage.

______________________________ __________________________

Signature Date

______________________________ __________________________

Last Name (print), First Name (print) Student Number

14