McGill University

Desautels Faculty of Management

Course Syllabus
FINE 342: Corporate Finance
Instructor: Vadim di Pietro

Contact Information: vadim.dipietro@mcgill.ca. I get a lot of emails, so if I forget to reply within

24 hours, please just email me again. My office number is Armstrong 155D and my office phone number
is 514-398-8052 or 514-983-8292.

Office hours: To be announced in class and posted in the announcements section on the course
webpage.

Course description:
The course provides a framework for analyzing corporate financial decisions. Topics include:

 Equity Issuance
 Debt Issuance
 Capital Structure Theory
o Cost of Equity, Debt, and Weighted Average Cost of Capital
o Miller Modigliani irrelevance theory
o Tax advantage of debt
o Bankruptcy cost of debt
o Conflicts of interest and agency costs
o Asymmetric information and Pecking Order Theory
 Valuation
o Discounted Cash Flow Analysis
 Adjusted Present Value
 Flows to Equity
 Weighted Average Cost of Capital
o Multiples
 Payout policy
 Adverse selection and optimal contract design
 Real Options

Course material:
The course will be based on class notes. Power point slides will be posted to the course webpage.
Students are also responsible for additional material presented in class that is not covered in the
slides. Although not required, a good optional reference textbook would be Corporate Finance by
Ross or Corporate Finance by Berk and Demarzo (any editions are OK since the book is optional).
Grading Scheme:

Assignments: 15%
Midterm: 35%
Final exam: 50%
Dates for the above will be posted in the announcements section on the course webpage.

Assignments: There will be 2 assignments worth 7.5% each. These will serve to reinforce and
complement concepts learned in class. Assignments are to be completed in groups of up to 5
students. Late assignments will not be accepted. Due dates will be announced during the
semester.

Some useful links:

www.cxoadvisory.com Good summary of investment strategies analyzed in academic papers.
www.economist.com Economic and finance news.
www.wsj.com Wall Street Journal.
www.finance.yahoo.com Finance news and historical financial data.
www.seekingalpha.com Up to the minute breaking news (very good mobile website)
www.ft.com Finance news and weekly surveys on investments, banking, finance, etc.
www.marketwatch.com Finance news.
www.bloomberg.com Finance news.
www.afajof.org Journal of Finance.
www.ssrn.com Search for academic papers on finance.
www.nber.org National Bureau of Economic Research has links to economic web sites and historical stats.
www.econ-datalinks.org Contains links to useful economic and business data sources.
www.barra.com Contains historical monthly equity returns for a number of market indices.
www.ibbotson.com Contains interesting research and links to financial data.
www.nyse.com New York Stock Exchange
www.cbot.com Chicago Board of Trade
www.cme.com Chicago Mercantile Exchange
www.londonstockexchange.com London Stock Exchange

Additional Notes:

1) In the event of extraordinary circumstances beyond the University’s control, the content and/or evaluation
scheme in this course is subject to change.
2) In accord with McGill University’s Charter of Students’ Rights, students in this course have the right to submit in
English or in French any written work that is to be graded.
3) McGill University values academic integrity. Therefore all students must understand the meaning and
consequences of cheating, plagiarism and other academic offences under the Code of Student Conduct and
Disciplinary Procedures (see www.mcgill.ca/students/srr/honest for more information).