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University of Michigan, Ross School of Business
FIN 300: Financial Management
Winter 2018
Instructor: Indrajit Mitra
Class time, Location:
Office Hours:

Office:
E-mail:
Course website:

002: Monday & Wednesday, 10:00am-11:30am, R2210 BUS
004: Monday & Wednesday, 1:00pm-2:30pm, R2210 BUS
005: Monday & Wednesday, 2:30pm-4:00pm, R2210 BUS
Mondays 4:15pm – 5:45pm and by appointment.
Exceptions – such as additional office hours before exams – will
be announced in class or on Canvas.
R4462
imitra@umich.edu
canvas.umich.edu.

Course description and objectives:
FIN300 and FIN302 are designed to familiarize students with the basic tools and concepts of
Finance, and to enable students to pursue additional courses in investments, corporate finance,
capital markets, and financial institutions. Financial Management topics will include the time
value of money, the valuation of riskless and risky assets, market efficiency, corporate
investment decision making, capital structure decisions, and risk management.
The course will be primarily lecture based. Lectures will cover theoretical concepts necessary to
analyze complex financial decisions as well as examples and applications used in the industry.
Course materials
The readings and requirements for the course are based on Ross, Westerfield and Jaffe’s
“Corporate Finance” (10th edition). However, feel free to purchase used versions and/or older
versions (8th, 9th edition). Older versions are substantially cheaper. Bear in mind: Slight changes
will most likely exist between editions (different numbers in examples, sometimes different
order of chapters, etc.) but the concepts remain the same.
Practice Questions (and Solutions) from the 10th edition will be posted on the course homepage
to avoid confusion caused by differences in practice questions across different versions. I
recommend owning a hardcopy of the book.
Besides this book, any additional material will be either handed out in class or posted on the
course website.

FIN 300: Financial Management / Making Financial Decisions - Winter 2017

A simple calculator or financial calculator is required. A financial calculator is
recommended but not required. Many of the problems you will encounter require arithmetic
operations that are easier to solve with a financial calculator than with non-financial calculators,
especially in the limited time frame of an exam. If you decide to use a financial calculator, it is
your responsibility to learn how to use it. I will post instructions on Canvas and have TAs help
you to learn how to use it. We will spend zero class time on learning how to use a calculator.
Homework Assignments
Four problem sets will be posted on the course website. You must turn in your homework by
11.59pm on the due date. No late homework will be accepted. Homework due dates are:
Homework

January 29

Homework

February 14

Homework

Mar 21

Homework

April 11

You are allowed to work together on homework assignments – and I encourage you to work
together! However, you must hand in your own individual homework. Photocopies of
others’ work are unacceptable. You must show how you obtained all your answers.
Homework assignments are graded pass (1) / fail (0): to pass, you need to attempt to answer all
questions. Incorrect answers will not be penalized.
Final Exam and Mid-Term
Note that the mid-term starts on Michigan time and you have to be in the room by that time.
The final exam starts as stated (non-Michigan time). Exam dates are:
MID TERM EXAM:

February 21st

FINAL EXAM:

April 24th

There will be no makeup mid-term. If you miss the mid-term exam due to a well-documented
valid written excuse (e.g. a doctor’s note, religious holiday), your grade will be based on your
other work. Otherwise, missing the mid-term is equivalent to getting a grade of zero for the
mid-term. It is RSB policy to not consider recruiting activities an excuse for a missed
exam.
You will be allowed to bring one sheet of paper (maximum size: 8-1/2” x 11”) with notes and
formulas (both sides are ok) on it to the exam room. The paper must be handwritten (not
photocopied, not from a computer print-out) and handed in along with the mid-term/final
exam. You can get that sheet back a few days after the test/exam.
You will be allowed to bring a calculator, but no programmed text in the calculator. No
laptops, no iPads, no etc. Cell phones, smartphones, and all electronic devices must be
turned off during tests and exams. All exams must be completed individually.
The final exam will be based on all material covered in class.

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FIN 300: Financial Management / Making Financial Decisions - Winter 2017

Grading
Your course grade will be weighted as follows:
Homework:

5%

Mid-term:

30%

Final Exam:

50%

Class participation:

15%

Allocation of participation points is at the discretion of the instructor. Factors that influence the
participation portion of your grade include attendance, being on time, not leaving early, not
disturbing class or others, and (quality of) contributions to the class discussion.
If you have a question about the way I grade any of your work, come and talk to me
immediately. If you disagree with the grade even after you have discussed it with me, you must
submit your question in writing within one week after I return your work. If you appeal, I will
re-grade your entire assignment; your grade may increase, decrease, or remain the same.
The grading policy at Ross mandates < 40% at A− or above, < 90% at B or above, and > 10% at
B− or below for this class. Consistent with this policy, BBA students will be ranked across all
BBA students in all my sections and non-BBA students will be ranked across all non-BBA
students in all my sections. According to that ranking, final grades will be assigned as follows:
A+

up to 5%

A

15%

A−

20%

B+

25%

B

25%

B− or below 10%
Academic Honor Code
Personal integrity and professionalism are fundamental values of the Ross School of Business
community. This course will be conducted in strict conformity with the Academic Honor Code.
The
Code
and
related
procedures
can
be
found
at
http://www.bus.umich.edu/Academics/Resources/communityvalues.htm. The site also contains
comprehensive information on how to be sure that you have not plagiarized the work of others.
Claimed ignorance of the Code and related information appearing on the site will be viewed as
irrelevant should a violation take place. Non-Ross students taking the course should also
familiarize themselves with the Code as they will be subject to the Code while enrolled in this
course.
Special Considerations
The University of Michigan is committed to providing equal opportunity for participation in
all programs, services and activities. Students wishing to receive testing accommodations
must register with the UM SSD (Services for Students with Disabilities) as soon as possible.

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FIN 300: Financial Management / Making Financial Decisions - Winter 2017

It is the student’s responsibility to submit their written request and Verified Individualized
Services and Accommodations (VISA) form to the instructor as early as possible, but no
later than two weeks prior to the test or quiz for which accommodations are requested. In
rare cases, the need for an accommodation arises after the two week deadline has passed
(for example, a broken wrist). In these cases the student should still contact SSD and the
instructor - however, due to logistical constraints we cannot guarantee that an
accommodation can be made after the two week deadline has passed. Requests only need
to be made once for each class.
Requests may be made through the Testing Accommodations survey and must include a
scanned or photographed copy of the VISA form.

Class Norms and Expectations
Your dedication and class participation will determine how much you learn in this course. To
this end, I expect you to observe the following norms:


Come to class on time and stay until the end. Late arrival and early departure without
my explicit prior approval are unacceptable. Leaving during class and coming back with
a beverage or food in hand is very unacceptable and rude.



Ask questions whenever something is not clear. It takes time to learn new concepts and
asking questions helps immensely. Asking questions will not adversely affect your
participation grade. If I do not know the answer to your question right away, I will get
back to you as soon as possible.



Participate actively in class lectures and discussions. This way you will get the most
out of this course. I may systematically cold call on individuals. So read up the
suggested material before you come to class.



I will never view honest mistakes negatively. I will use them as valuable learning
opportunities. Furthermore, it is better to make your mistakes in class than at work as
there are no monetary implications for mistakes made in class. In general, honest
mistakes will not adversely affect participation.



Treat your fellow students with respect, listen to their answers and react to the
issues raised by them. Always. You will be surprised how much you can learn from
each other.



Please turn cell phone ringers off during class. If some emergency requires you to
leave your cell phone on, please let me know before class. If your cell phone rings in
class, I will reserve the right of answering it for you (this may affect your class
participation though – and your relationship to the caller).



I am keen on hearing your feedback throughout the course. Feel free to email, call, or
send anonymous notes. I appreciate your comments and suggestions. Feedback will not
adversely affect your participation grade.

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FIN 300: Financial Management / Making Financial Decisions - Winter 2017



You are responsible for announcements made in class, such as changes to the schedule,
changes in homework due dates, and additional reading. If you are absent, consult a
classmate. I expect that you cooperate with your classmates. If you do it well, you will
learn at least as much from them as from the lectures.



Please prepare a legible name card and put it up in front of you during every lecture.
This will help me and your peers to learn your names more quickly.



I am not strictly opposed to the use of laptops in class. However, I will have to ask you
to sit in the back rows so as not to distract others, to switch off internet access, and to
mute the loud speakers.



It is your responsibility to check the course website as frequently as possible (at least on
a daily basis) so that you do not miss any announcement posted there.

Class Schedule
The following table describes our class schedule. The schedule is tentative: the topics covered
on each proposed date may change depending on our pace.

Class

Topics Covered

Textbook Reading

Jan 8




Course Introduction
Financial Statements &
Cash Flows



Chapters 1 & 2

Jan 10



Discounted Cash Flow
Valuation I



Chapter 4

Jan 17



Discounted Cash Flow
Valuation II



Chapter 4

Jan 22



Investment Decision
Rules



Chapter 5

Jan 24



Making Capital
Investment Decisions



Chapter 6

Jan 29



Applications #1

Jan 31



Risk Analysis and Real
Options

Assignments Due




Chapter 7

5 of 7

Homework #1 Due

FIN 300: Financial Management / Making Financial Decisions - Winter 2017

Class

Topics Covered

Textbook Reading

Feb 05



Bond Valuation I



Chapter 8

Feb 07



Bond Valuation II



Chapter 8

Feb 12



Stock Valuation



Chapter 9

Feb 14



Stock Valuation &
Applications #2



Chapter 9

Feb 19



Applications #2

Feb 21



MID-TERM EXAM
DURING CLASS TIME

Feb 26,
Mar 1



BREAK

Mar 5



Risk & Return



Chapter 10

Mar 07



The Capital Asset Pricing
Model (CAPM) I



Chapter 11

Mar 12



The Capital Asset Pricing
Model (CAPM) II



Chapter 11

Mar 14



Efficient Capital Markets



Chapter 14

6 of 7

Assignments Due

Homework #2 Due

FIN 300: Financial Management / Making Financial Decisions - Winter 2017

Class

Topics Covered

Textbook Reading

Mar 19



Risk, Cost of Capital, and
Valuation: Weighted
Average Cost of Capital
(WACC)



Mar 21



Applications #3

Mar 26



Long-Term Financing



Chapter 15

Mar 28



Capital Structure



Chapter 16

Apr 02



Limits to the Use of Debt



Chapter 17

Apr 04



Dividends and Other
Payouts



Chapter 19

Apr 09



Risk Management/
Options I



Chapter 22

Apr 11



Risk Management/
Options II



Chapter 22

Apr 16



Exam Review

Assignments Due

Chapter 13

Homework #3 Due

7 of 7



Homework #4 Due