Mark K. Smith, Ph.D.

, MBA 580 Corporate Finance Fall 2016

Instructor Contact Information
Email: smithmk@illinois.edu
Office Hours: 2:00 pm 3:30 pm Mondays & Wednesdays 309 Wohlers Hall
Class Information
Course Title: Fall 2016 Finance 580 Corporate Finance (FIN580, section CF, CRN 66670)
Meeting Time: 12:30 pm 1:50 pm Mondays and Wednesdays
Meeting Location: 245 Wohlers Hall
Final Exam: 8:00 am 11:00 am, Thursday, December 15

Course Description
This course is an introductory corporate finance course. The course will cover a broad range of topics
providing a comprehensive overview of the material. Topics covered include:

Goals and governance of the corporation Company valuation

Financial markets Corporate financing
Measuring corporate performance Venture capital and issue securities
Time value of money Debt and payout policy
Valuing bonds and stocks Short and long-term financial planning
Net present value Working capital management
Discounted cash-flow project analysis Mergers, acquisitions, and corporate control
Risk, return, and the opportunity cost of capital International financial management
Capital budgeting Options and risk management
The weighted-average cost of capital

My goal is for the student to understand the broad fundamental concepts of corporate finance in a unifying
model. The text we will be using provides an excellent introduction to the concepts. Topics can be explored in
more detail based on class interest and experience. My plan is to present more comprehensive information on
equity valuation, bond calculations, and options & futures.
Finance is a field that deals with the allocation of assets and liabilities over time under conditions of certainty
and uncertainty (science of money management). A key point in finance is the time value of money (the
purchasing power of money can vary over time). Finance aims to price assets based on their risk level and their
expected rate of return.
Finance vs. Accounting: Accounting is the reporting of historical financial information, while financial
management is concerned with the allocation of capital resources to increase a firm's value to the
shareholders and increase their rate of return on the investments. Techniques in corporate finance generally
use cash flows, whereas accounting generally stresses historical income or earnings numbers.

Course Materials and Resources

Fundamentals of Corporate Finance, Brealey, Myers, & Marcus, 8th ed., McGraw-Hill Irwin
1. CONNECT 6-month access (required): ISBN 9780077640750 - $130 (via publisher)
2. Textbook (recommended):
Loose Leaf: ISBN 9780077640804 - $60 (via publisher; can receive this special price once registered
with CONNECT) ** OR **
Hardcover: ISBN 9780077861629 - $340 (via publisher)

FIN 580CF Spring 2016 Page 1 of 5 ver. 8/19/16

Both the CONNECT subscription and textbook can be purchased from the Illini Union Bookstore separately or
as a bundle (bundle ISBN 9781259829833). Check prices before you buy.
Texas Instruments BAII Plus Financial Calculator (required)
iClicker (required): iClickers will be used for taking in-class pop quizzes. iClickers can be purchased from the
Illini Union Bookstore or purchased in the secondary market. Be sure to register your iClicker prior to class at
the course COMPASS site.
COMPASS (required): I will use the COMPASS course website (https://compass.illinois.edu) regularly to post
lecture notes, supplementary materials, and COMPASS assignments. COMPASS will be your access point to the
McGraw Hill CONNECT system where you will complete LearnSmart reading assignments (optional) and
homework assignments. Please check the website regularly and let me know if you have any problems
accessing it.

Grading Criteria
Course grades will be assigned using the system adopted by the University in 1996. This system uses a four-
point scale with pluses and minuses. Grades assigned will be one of the following:
A+ 4.00 97% >= A+ C+ 2.33 77% >= C+ < 80%
A 4.00 93% >= A < 97% C 2.00 73% >= C < 77%
A- 3.67 90% >= A- < 93% C- 1.67 70% >= C- < 73%
B+ 3.33 87% >= B+ < 90% D+ 1.33 67% >= D+ < 70%
B 3.00 83% >= B < 87% D 1.00 63% >= D < 67%
B- 2.67 80% >= B- < 83% D- 0.67 60% >= D- < 63%
F 0.00 0% >= F < 60%
according to the total percentage points earned during the semester based on the following component
weights:
Graded Homework Assignments 20% drop lowest 2 grades
Pop Quizzes 20% drop lowest 2 grades
Group Assignments 20%
Exams (2) 20%
Final Exam (1) 20%

Graded Homework Assignments (20%)

Each CONNECT homework assignment will have both a practice and graded component. Practice homework
assignment attempts are unlimited, there are hints and links to the associated material. Practice homework
scores do not count towards your grade.

Graded homework assignments are identical to the practice assignments except only one attempt is allowed,
there are no hints available, and the solutions will only be provided after the due date.

Note due date

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Numerical problems are usually generated dynamically with a reasonable answer tolerance to account for
differences in rounding.
You may work with your study groups on homework assignments; however, each graded homework
assignment must be submitted individually to receive credit. Tests, pop quizzes, and the final exam will be
your individual work, so be sure to understand all homework problems and the corresponding solutions.
CONNECT graded homework assignments must be submitted prior to the due date. Graded homework
assignments are submitted automatically when due even if the assignment has not been started or is
incomplete. To allow for travel and other circumstances, the lowest two graded homework scores will be
dropped from the grade calculation.
The CONNECT homework assignments are accessed through your COMPASS account. Graded homework
assignment due dates are in the class schedule and shown with each homework COMPASS assignment (as
shown above). As with any online system, server outages can happen. Assignment extensions will only be
given if there is a documented COMPASS or CONNECT server outage within 24 hours of the due date of the
assignment.
Note that there may be homework assignments directly through COMPASS system. They will be set up in a
similar way to the CONNECT assignments.

Pop Quizzes (20%)

Pop quizzes will be given at random times throughout the semester to help you stay current with the material.
iClickers will be used for the quizzes so be sure to bring them to every lecture. To allow for travel and other
circumstances, the lowest two pop quiz scores will be dropped from the grade calculation.

Group Assignments (20%)

There will be several groups assignments throughout the semester. Teams will be 4 to 6 members (self-
selected).
UISES Investment Simulation 10%
Other Group Assignments 10%
Teams members must be self-selected and submitted to me by the due date in the course calendar. Other
group assignments might include a company valuation report and/or one or more case studies.

Exams (20%)
Exams will be given on the dates indicated in the class schedule (subject to change). Exams may be given
online in the College of Business Computer Lab in 36 Wohlers Hall or in our regular classroom. Each exam
location will be announced one week prior to the respective test date. Online exams will be given either through
the CONNECT and/or COMPASS systems.

Final Exam (20%)

The final exam will be comprehensive and given on the date and time in the class schedule (subject to change).
The final exam may be given online in the College of Business Computer Lab in 36 Wohlers Hall or in our
regular classroom. The final exam location will be announced several weeks prior to the exam date. The online
final will be given either through the CONNECT and/or COMPASS systems.

FIN 580CF Spring 2016 Page 3 of 5 ver. 8/19/16

Class Etiquette, Attendance Policy and Conflict Policy
Class Etiquette
Arrive to class on time.
Turn off or mute your cell phone.
Do not use your laptop, phone, or tablet in class.
Do not eat during lecture time.
Contribute to the class discussion when appropriate.
Avoid side conversations.
Be attentive in class.
Stay for the entire class.
Contact the professor when you have to miss class.
Attendance Policy
Students are expected to attend all lectures. For excused absences, the student must provide an explanation
to the instructor and supply supporting evidence as required by the instructor. The University considers
excused absences to include:
a) Illness, death in the family or other emergency, or other reasons beyond the students control
b) A students religious beliefs, observances, and practices. (University policy and state law require that
all instructors reasonably accommodate conflicts with class attendance and work requirements
resulting from a students religious beliefs, observances, and practices.)
c) A student serving as a volunteer emergency worker, as defined in the Volunteer Emergency Worker
Job Protection Act. (University policy and state law require that all instructors reasonably
accommodate conflicts with class attendance and work requirements resulting from a students
serving as an emergency worker).
d) Instructors must reasonably accommodate students whose class absence resulted from formal
participation in scheduled activities of officially recognized groups such as athletic teams, performing
groups, and the Urbana-Champaign Senate. THIS DOES NOT INCLUDE REGISTERED STUDENT
ORGANIZATIONS.
Conflict Policy
The student is encouraged to inform the instructor of any known conflict as soon as possible but no later than
one week before the date of the quiz or examination, or due date of the assignment.

Other
Wohlers Emergency Procedures
In the event of a tornado warning please seek shelter in the Wohlers Hall basement or 141 Wohlers Hall. In
the event of a fire, proceed to Business Instructional Facility (BIF) Deloitte Auditorium (Room #1001) or the
Law Building Pederson Pavilion. In the event of threat from a shooter on campus, lock down the classroom
and move to a place of safety within the classroom. If you encounter a suspicious package, do not touch the
package, alert campus security, and refrain from cell phone usage until the situation is resolved. More detailed
information and action instructions are available in the Wohlers Building Emergency Action Plan (posted on
Compass).

FIN 580CF Spring 2016 Page 4 of 5 ver. 8/19/16

Special Accommodations
If you have any condition, such as a physical or learning disability, which will make it difficult for you to carry
out the work outlined in this syllabus or which will require academic accommodations, please notify me during
the first week of the course. I will strive to accommodate you in collaboration with Disability Resources and
Educational Services (DRES). Please visit the DRES website (http://www.disability.uiuc.edu/) if you would like
additional information on this topic.

Academic Integrity
Academic integrity is critical in order to maintain a fair atmosphere for learning. Sections I-401 through 406 of
the student code contains details of the university policy regarding academic integrity and can be accessed at:
http://admin.illinois.edu/policy/code/article1_part4_1-401.html. Penalties for violations range from a zero on
the assignment to dismissal from the university.

Copyright/Recording
The contents of the syllabus, class materials, lectures, and course book for this course are protected under the
copyright laws of the United States. They are intended for the private use of students and may not be
reproduced in any way, shape, or form without the express written permission of the author. Tape/video
recording of course lectures is prohibited.

Course Schedule
Subject to change. Changes, if any, will be announced in class and posted on COMPASS. The course schedule is
posted in a separate document on COMPASS and will be kept current.
Known dates.
8/29 Mon Deadline for forming groups (start of class)
9/1 Thurs UISES Investment Simulation Starts
9/5 Mon Labor Day Holiday
9/14 Wed Deadline for 80% investment of UISES Investment Simulation funds
9/21 Wed Exam #1 (location 36 Wohlers Hall)
10/24 Mon Exam #2 (location 36 Wohlers Hall)
10/26 Wed Guest Speaker: Gordon Salm, CFO Health Alliance
11/21 Mon Fall Break
11/23 Wed Fall Break
11/30 Wed UISES Investment Simulation Ends
12/15 Thurs FINAL EXAM 8:00 am (location 36 Wohlers Hall)

FIN 580CF Spring 2016 Page 5 of 5 ver. 8/19/16

Run > Hide > Fight
Emergencies can happen anywhere and at any time. It is important that we take a minute to
prepare for a situation in which our safety or even our lives could depend on our ability to react
quickly. When were faced with any kind of emergency like fire, severe weather or if someone
is trying to hurt you we have three options: Run, hide or fight.

Run
Leaving the area quickly is the best option if it is safe to do so.

4 Take time now to learn the different ways to leave your building.
4 Leave personal items behind.
4 Assist those who need help, but consider whether doing so puts
yourself at risk.
4 Alert authorities of the emergency when it is safe to do so.

Hide
When you cant or dont want to run, take shelter indoors.

4 Take time now to learn different ways to seek shelter in your building.
4 If severe weather is imminent, go to the nearest indoor storm refuge area.
4 If someone is trying to hurt you and you cant evacuate, get to a place
where you cant be seen, lock or barricade your area, silence your
phone, dont make any noise and dont come out until you receive an
Illini-Alert indicating it is safe to do so.

Fight
As a last resort, you may need to fight to increase your chances of survival.

4 Think about what kind of common items are in your area which you
can use to defend yourself.
4 Team up with others to fight if the situation allows.
4 Mentally prepare yourself you may be in a fight for your life.

Please be aware of persons with disabilities who may need additional assistance in emergency
situations.

Other resources

4 police.illinois.edu/safe for more information on how to prepare for emergencies, including

how to run, hide or fight and building floor plans that can show you safe areas.

4 emergency.illinois.edu to sign up for Illini-Alert text messages.

4 Follow the University of Illinois Police Department on Twitter and Facebook to get regular
updates about campus safety.