FIN 413 – Spring 2022

A. Course Information
Course Number FIN 413
Course Name Corporate Finance

Section 12
Credit Hours 3
Department Department of Finance and Accounting
Campus Beirut
Meeting Time and
Place 8:00 a.m. - 9:15 a.m. TR, AKSOB 904.
Number of Hours per
week
3
Tutorial Lab Hours 0
This course provides a framework, concepts and tools for analyzing investment and
financial decisions based on fundamental principles of modern financial theory.
Course Description Topics covered include discounted cash flow techniques, capital budgeting and
investment analysis, cost of capital, project analysis, corporate governance, capital
structure of corporations, dividend policy, and financing and valuation.
Prerequisites FIN301 Managerial Finance and FIN302 Financial Institutions and Markets
B. Instructor Information
Instructor Name Dr. Mustafa Dah
Office Location BB 1511 (Beirut)
Telephone Extension 2430
Email [email protected]

Office Hours Tuesdays & Thursdays 11:15 a.m. – 1:00 p.m. (Webex)

C. Textbooks and Content Coverage

Required Textbook(s)  Principles of Corporate Finance by Richard A. Brealey, Stewart C. Myers, and
Franklin Allen, 13th Edition. McGraw-Hill.
And material
 Microsoft Excel and/or Financial Calculator
 The power point slides of the lectures, the solutions to end-of-chapter
problems, and the syllabus are all posted on Blackboard. Students can log in to
Blackboard using their LAU email username and password.
 Recorded Lectures are posted on Microsoft Stream
LAU Adnan Kassar School of Business | Course Syllabus

D. Goals, Outcomes and Learning Methods

The School of Business at LAU follows processes to assess and evaluate how well the school accomplishes its program
educational goals and learning outcomes. These measures assist departments and faculty members to continuously improve
programs and courses.
Program
1. Have essential knowledge of various disciplines in business
Learning Goals 2. Possess problem solving capabilities
BS in Business

Program Learning
Outcomes At the end of this course the student will be able to
 make a distinction between an investment and a financial decision;
This course will be used
towards fulfilling the  understand and analyze the capital investment process in a firm;
following program  use capital budgeting techniques in project analysis and valuation;
learning outcomes:
 discuss corporate governance structures
 interpret payout policy and the effect of leverage on firm value and cost of
capital;
 explain the pecking order and trade off theory of financial choices.
General Skills  Analytical thinking
This course will  Reflective thinking
contribute to developing  Application of knowledge
the following:

General Business
and Management  Economic, political, regulatory, legal, technological, and social contexts of
Knowledge Areas organizations in a global society: the economic problem that faces
This course will individuals and society as a whole
contribute to developing  Social responsibility, including sustainability, and ethical behavior and
the following:
approaches to management: the characteristics of different market
structures, and the shortcomings of the market system
 Financial theories, analysis, reporting, and markets: the main tools of
economic analysis, such as demand and supply
 Systems and processes in organizations, including planning & design,
production/operations, supply chains, marketing, and distribution
 Group and individual behaviors in organizations and society: the workings
of the market system.
Teaching
Several methods are used to help students learn. These methods include formal lectures,
Methodology interactive class discussions, and problem solving sessions.
Students are required to:
 Read the assigned chapters;
 Answer the questions and solve as many of the problems in the end-of-chapter
material; and
 Practice on the additional exercises and problems prepared by the instructor. It is also
highly recommended that students write down notes and be active participants
during the class discussions or lectures.
Students are highly encouraged to ask the instructor for clarification / explanation of any
course material that is not clear during class and / or during the office hours. Students are
also encouraged to share any suggestions for course improvement / to facilitate learning
with the instructor any time during the term.
LAU Adnan Kassar School of Business | Course Syllabus

Required
Technology Skills Students are expected to master the use of Microsoft Excel as well as the financial
calculator

E. Performance Evaluation
Student performance evaluation will be based on exams, a practice set, quizzes/attendance,
participation, case analysis, homework problems, and other assignments according to the following
distribution:

Method of assessment of learning Date, time, & place Weight

Attendance and participation of student in
Every class 5%
interactive class discussions

Project/Case* 25%

Midterm Exam** Will be announced 35%

Final Exam** Will be announced 35%

Total 100%
* To be announced in class.
** Following any online exam/assignment/quiz, the instructor has the right to subject selected students to an
additional oral exam or an oral Q/A session in order to validate their answers.

Grade Quality Points Guidelines over 100

A 4  90
A- 3.67 87 – 89
B +
3.33 83 – 86
University
Grading B 3.0 80 – 82
Scale B- 2.67 77 – 79
A letter
C +
2.33 73 – 76
grade will
be C 2 70 – 72
determine
C -
1.67 67 – 69
d based on
the D+ 1.33 63 – 66
University
grading D 1 60 -62
scale, as F 0  59
follows:

Policies pertaining to assessment of learning:

 No addendum, make-up exams, or extra assignments to improve your grade(s) will be given.
 An exam usually covers all the topics, assigned readings, and class lectures and discussions done prior to the date of that
exam.
 While a highly skewed grade distribution will make the instructor investigate the reason for the tilt, it does not give the
student any claim for curving the grades unless the instructor determines in his / her sole judgment that he / she made a
mistake in designing or preparing the exam (for example inadvertently including a question on the exam on a topic that
was not covered in the course or the wording of a question is not clear, etc.). The appropriate remedy, should that happen,
will be determined solely by the instructor.
LAU Adnan Kassar School of Business | Course Syllabus

Topical Coverage:

The estimated or tentative time allocation for the different topics covered in this course and the exam
dates are listed below. Please note that this schedule is tentative. We may move faster or slower
depending on many factors. The dates of Midterm Exams are tentative and subject to change if there is
need to do that.

Materials assigned to achieve pedagogical

Specific pedagogical objectives of the class meeting(s)
objectives

1. Corporate Investment and Financing

2. The Role of the Financial Manager and the Opportunity Cost of Course Syllabus
Capital Chapter 1:
3. Goals of the Corporation Goals and Governance of the Firm
4. Agency Problems and Corporate Governance

1. A Review of the Basics Chapter 5:

2. Payback
Net Present Value and Other Investment
3. Internal (or Discounted-Cash Flow) Rate of Return
Criteria
4. Choosing Capital Investments When Resources Are Limited

1. Applying the Net Present Value Rule Chapter 6:

2. Example – IM&C’s Fertilizer Project Making Investment Decisions with the Net
3. Equivalent Annual Cash Flows Present Value Rule

1. The Capital Investment Process Chapter 10:

2. Sensitivity Analysis, Scenario Analysis, Break-Even Analysis
Project Analysis
3. Real Options and Decision Trees

1. Introduction to Risk and Return

2. Measuring Portfolio Risk Chapter 7:
3. Calculating Portfolio Risk Introduction to Risk and Return
4. How Individual Securities Affect Portfolio Risk

Chapter 8:
1. The Relationship between Risk and Return
Portfolio Theory and
2. Validity and Role of the Capital Asset Pricing Model
the Capital Asset Pricing Model

Midterm assessment of achievement of above pedagogical objectives during class time

1. It covers chapters 1, 5, 6, 7, 8, & 10 and the class notes and lectures.
2. Weight of this assessment in your overall grade for the course is 35%.
3. Format: Multiple choice questions.

1. Company and Project Costs of Capital

2. Analyzing Project Risk Chapter 9:
3. Measuring the Cost of Equity Risk and the Cost of Capital
4. Certainty Equivalents – Another Way to Adjust for Risk
1. Venture Capital
2. The Initial Public Offering Chapter 15:
3. Alternative Issue Procedures
How Corporations Issue Securities
4. Security Sales by Public companies
5. Private Placements by Public Companies
1. Facts about Payout Chapter 16:
2. How Firms Pay Dividends and Repurchase Payout Policy
3. How Do Companies Decide on Payouts?
LAU Adnan Kassar School of Business | Course Syllabus

4. The Information in Dividends and Stock

5. The Payout Controversy
6. The Rightists
7. Taxes and the Radical Left
8. The Middle-of-the-Roaders
1. The effect of Financing Leverage Chapter 17:
2. Financial Risk and Expected Returns
Does Debt Policy Matter?
3. The Weighted-Average Cost of Capital

1. Corporate Taxes
2. Corporate and Personal Taxes Chapter 18:
3. Costs of Financial Distress How Much Should a Corporation Borrow?
4. The Pecking Order of Financing Choices

Final assessment of achievement of above pedagogical objectives

1. It covers chapters 6, 9, 15, 16, 17, & 18 and the class notes and lectures.
2. Weight of this assessment in your overall grade for the course is 35%.
3. Format: Multiple choice questions.

F. Policies
Attendance Policy Students are held responsible for all the material presented in the classroom, even
during their absence. Makeup work and exams, if any, will be according to the
rules spelled out in the course syllabus.
Students can miss no more than two weeks of classes in any semester (one week
for summer term) excused and otherwise, in any course, and still receive credit
for that course.
Students who exceed the allowed number of absences must withdraw from the
course; otherwise, the course grade will be recorded by the instructor as F or NP,
depending on the type of grading in the particular course. In highly exceptional
cases, students may be given special permission by the Academic School
Councils to continue in the course

Make-Up Policy
No make-up exams are granted except if the appropriate
Missing an Exam excuse presented to the guidance office within a week of
the absence date is deemed valid by the instructor.
Late submitting All assignments should be submitted on time.
projects/assignment

Lost session due to All lost sessions are to be made up as per LAU rules and
instructor’s absence regulations.
LAU Adnan Kassar School of Business | Course Syllabus

Withdrawal Policy WI (Early Withdrawal) indicates withdrawal from the course, after the Late
Registration Period and until the end of the 5th week of the Fall and Spring
semesters, and until the 10th day of the Summer modules. It has no quality
points. It does not count in the GPA, and no credits will be added to the
student’s record.
WP (Withdrawal Pass) indicates withdrawal from the course, after the 5th week
and until the end of the 10th week of the Fall and Spring semesters, and
from the 11th day of classes until 18th day of the Summer modules. It has
no quality points. It does not count in the GPA, and no credits will be added
to the student’s record.
WF (Withdrawal Fail) indicates withdrawal from the course, after the 5th week
and until the end of the 10th week of the Fall and Spring semesters, and
from the 11th day of classes until 18th day of the Summer modules. It has
no quality points. It does not count in the GPA, and no credits will be added
to the student’s record, but is counted as repeat.
A Withdrawal Form must be submitted to the Registrar’s Office.

H. Additional University Policies

Student Code of The provisions and stipulations of LAU Student Code of Conduct are
Conduct applicable to all students taking courses in the School of Business,
regardless of whether or not they are pursuing a degree in the School. Refer
to LAU’s website for the complete policy
http://www.lau.edu.lb/governance-policies/policies/
student_code_of_conduct.pdf

Copyright laws Refer to LAU’s policy on Copyrights and Patents on the web or the
academic catalogue
http://www.lau.edu.lb/governance-policies/policies/
copyright_patent_policy.pdf

Academic Dishonesty Students are expected to conduct themselves in accordance with the highest
and Plagiarism standards of academic honesty. Academic misconduct for which a student is
subject to penalty includes all forms of cheating, forgery, or plagiarism.
Plagiarism is defined as the use of someone else’s ideas, words, or work, as
if it were one’s own, without clearly acknowledging the source of that
information. Any student found cheating in an exam, fabricating, falsifying,
or using any other form of academic dishonesty in the preparation of a paper
or a project, shall receive a zero on that exam, project or paper and will be
issued a Disciplinary Warning. A student found plagiarizing or cheating for
a second time shall receive an F grade for the course, as well as a second
Disciplinary Warning. Refer to the policy on academic dishonesty on LAU’s
website
http://www.lau.edu.lb/academics/arp/g/rules_procedures.php

Policy on Incompletes A grade of "I" indicates incomplete work. This grade is exceptionally given
by the instructor when a student, with a valid excuse, did not sit for the final
LAU Adnan Kassar School of Business | Course Syllabus

exam, and/or did not present the final project. Students will not be entitled to
an “I” grade, unless they have a passing grade of the completed material,
throughout the course, and so long as they have not exceeded the allowed
number of absences. Not completing the course or not sitting for Final exam
does NOT entitle you for a grade of "I". A student will have to complete a
request form for an Incomplete Grade and submit it to the School Academic
Council with the necessary input from the instructor of the course.
Course Evaluation In order to improve the effectiveness of the educational process, all students
are expected to submit their course evaluations by the last day of classes.
Students who fail to complete the evaluation of ALL registered courses by
the set deadline:
1. will not be able to access their course grades from Banner or Portal until
two weeks after the end of the final exams period; and
2. will not be able to request transcripts.
The anonymity of the process and the students will be maintained at all
times.