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FINA2303 Financial Management
FINA2303 Financial Management
1. GENERAL INFORMATION
Instructor: Lynn Pi, Associate Professor of Business Education, Dept. of Finance
Email: lynnpi@ust.hk
Office LSK 5073
office hours: by appointment
Class Dates and Venue: L1: Tue & Thu 3:00-4:20pm, LTJ
L2: Tue & Thu 4:30-5:50pm, LTJ
Optional Tutorials: TBC
Course Exclusion(s): FINA 2203 Fundamentals of Business Finance
Course Add/drop deadline: 14 Sep (please contact your program office)
Canvas course site: https://canvas.ust.hk
2. COURSE DESCRIPTION
This course provides an introduction to corporate finance. Topics include financial statement analysis, time
value of money, bond & stock valuation, capital budgeting, cost of capital, and risk & return concepts
The valuation principle is the unifying framework in this course. Students will first learn important tools
including time value of money, and several investment decision rules. After reviewing the basic corporate
accounting principles, they will apply these techniques and the valuation principle to corporate investment
decisions and project analysis. Securities valuation of bonds and stocks is another main application.
Subsequently, the critical concept of risk and return trade-off will be introduced and quantified. The model will
then be applied to corporations’ long term financing decisions of estimating the cost of capital.
3. COURSE OBJECTIVES
This course aims to introduce students to key basic financial concepts and theories, and develop their analytical
and problem solving skills in financial problems. It also provides students important foundations in finance for
those who plan to study intermediate and advanced-level courses in finance covering areas such as corporate
finance and investments.
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5. COURSE TEACHING AND LEARNING ACTIVITIES
Expected contact Study Load
Course Teaching and Learning Activities hours (% of study)
Lecture 40 40%
MFL Homework assignments 20 20%
Optional Tutorial 30 30%
Self-study and review 10 10%
Tutorial (optional for students who need extra help)
Total 100 100%
A. Class Participation
We encourage interactive learning through in-class exercises in which participation and submission of
exercises is required. You will get participation credits by completing all exercises and the PRS
questions, regardless of whether your answers are correct or not.
You will receive one bonus card if you ask or answer questions.
You are strongly recommended to regularly attend the lectures for two main reasons. First, lecture
notes only contain brief outlines and do not include detailed explanation of the concepts nor step by
step solutions to numerical examples. So simply reading the lecture notes may not enable you to fully
understand the concepts. Skipping classes will definitely hurt your performance because the
assignments and exam questions are heavily based on materials covered in class. Second, class
participation is important for your learning experience and highly encouraged. It helps you to think
actively rather than passively, keeps you involved and motivated rather than removed and
disinterested.
C. On-line Quizzes
There will be two online quizzes. All questions are in multiple-choice format.
Quizzes are similar to MFL exercises and they are meant to help you review for the course content.
You MUST complete the quizzes in the same strict confidence as in exams.
There will be no make up for quizzes. Students who miss the quizzes will receive “zero” mark for that
quiz.
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D. Examinations
There will be two examinations in this course – midterm and final. The final exam will be cumulative.
The Midterm exam will be on October 14 (Saturday) from 14:30 to 16:30.
The format of the exams will be all multiple choice questions. Questions are designed to test your
understanding of core finance concepts and principles as well as your ability to solve numerical
problems using the core principles and techniques.
The examinations are closed book and closed notes. Financial calculators are allowed but
programmable calculators or calculators with text display functions are NOT allowed. All HKEAA
approved calculators are allowed during examinations.
There are no alternative examination arrangements. A student who misses an examination without a
valid excuse will receive “zero” mark for that examination.
8. TEACHING MATERIALS
This course is a foundation required course for all Finance and QFIN major students. As such, the format and
content of the course as well as teaching materials are required by the Department of Finance.
1. Required textbook
rd
Fundamentals of Corporate Finance by Berk, DeMarzo and Harford, Pearson International Edition, 3 Ed.
This book is required of all students since it will be used extensively in the course. You should also read the
assigned chapters in the textbook thoroughly because the lectures will only focus on the core and more
difficult concepts instead of every detail in the textbook.
Note: This textbook contains information about U.S. financial markets, institutions and corporate finance
practices. These will not be covered in examinations.
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2. My Finance Lab (MFL) Access Code
Each student is required to have an individual Access Code to register for My Finance Lab, a web-based
homework and tutorial system accompanied the textbook.
It can be either purchased bundled with the textbook at a special discount price, or separately if you own a
used copy of the textbook, at the campus bookstore. Note: number of standalone cards is limited and may
be sold out quickly.
IMPORTANT: You must have your MFL account properly set up before 5pm on Sept 14 (Thur). Instructions
on registering your personal MFL account and a demo will be provided in the tutorials. Further instructions
on logging into the system to do the practices and assignments are also available on the course website.
My Finance Lab (MFL) contains a number of tutorial tools and learning aids that give you hands-on guidance
with a hint and partial credit system when working on the end-of-the-chapter problems.
There are important features in MFL: STUDY PLAN and HOMEWORK, which you would utilize extensively for
this course. Exercises in STUDY PLAN are non-graded. MFL provides step-by-step instruction, input-specific
feedback, and hints, and may link to spreadsheets, or sample problems that address the learning objective
of the problem. Therefore, you are strongly advised to take advantage of the STUDY PLAN by practicing
exercises for each chapter before attempting the graded assignments in HOMEWORK. All homework
questions are available in the STUDY PLAN but with different numerical parameters.
We will not post the solutions to end-of-chapter problems because you will get detailed solutions in STUDY
PLAN during your own practices.
All assigned readings and notes are posted at least two days prior to classes.
Answers to Critical Thinking questions at the end of each chapter are posted.
Solutions to Problems at the end of chapter will NOT be posted. Solutions to problems at the end of
chapter will NOT be posted because the detailed solutions are available in the STUDY PLAN in MFL.
5. Tutorial Sessions
These sessions are optional. In each session, the TA will answer any question that students may have and
will explain selected concepts from the topics covered in the lectures. The TA may also work on additional
examples and exercises. It is important for you to attend these sessions if you need extra help in this course.
The TA also offers office hours and is available to meet you by appointment.
6. Textbook solutions
Textbook solutions can only be accessed via MFL. The only way to master the necessary skills in this course is
through practice. The difficult part of each question is to know where to begin and which formula to use.
This essential skill set will only be developed only if you solve each problem by yourself from the beginning
without taking a glance at the solution. You should use the solution only to check your answer and identify
your mistakes
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Punctuality
You are expected to arrive and leave the class venue on time as late arrival and early departure are rude
and will be very disruptive to the class. If you need to come in late or leave early for various reasons, please
do so quietly.
Consideration
‒ Do not use electronic devices for entertainment.
‒ Do not talk with other students except when doing group exercises.
‒ Do not create disturbances in the classroom.
Academic Integrity
Academic integrity and honesty are critical values in upholding HKUST's reputation as a community of
scholars and its claim to the "intellectual property" created by staff and students. As a student of HKUST,
you must commit to the Academic Honor Code. Cheating will not be tolerated. If you are caught cheating
during the exams, at minimum you will receive zero credit and will face further disciplinary action.
Complete online Student Feedback Questionnaire (SFQ) Survey during last two weeks of the course at:
Canvas website (https://canvas.ust.hk) or
SFQ Mobile website (http://sfq.ust.hk/mobile/) or
HKUST iLearn app at smartphones / tablets