Q. What do I have to study for the Midterm and what will it look like?
A. The midterm will cover all the material that we have
discussed in class until the day before the midterm. In particular, you will be responsible for Chapters 16 and 17 from Grinblatt and Titman (2001). You should also know the material in all of the slides on the Dupont Analysis and on capital structure powerpoints.
The midterm will have an article and questions on the text of the article. This article will be either on Dupont Analysis or on Capital Structure. In addition, there will be short answer questions on any of the material.
You should know:
- Standard Dupont Analysis
- Alternative Dupont Decomposition
- The five generic strategies for product market competition and their associated financial ratios
- The incentives for managers/equityholders of a leveraged firm
- the incentive to take excessive risk
- the incentive to underinvest
- the incentive to invest myopically
- The impact of capital structure on
- location decisions
- trade credit decisions
- competitive strategy
- negotiating with labor unions
- negotiating with governments
- investment in firm reputation
- ability of the firm to attract good quality employees
Q. What will the final exam cover?
Q. Are the exams open book or closed
Ans. The midterm and the final exams are closed book; however, you can
bring in one 8.5x11 sheet, which can contain only formulas. I am very strict about this. You may write
on both sides of the paper. However, you may not staple several
sheets of paper together. Going through your notes probably
cannot make up for the lack of a proper understanding of the material. If you have anything proscribed on your sheet, I will take away the sheet altogether and I may penalize you, as well.
Q. Can I use a calculator during the exams?
Ans: Yes, you may use a calculator during the exams. However, for every problem, you will have to write out the formula that you are using both in symbolic form, as well as with the numbers filled in. If you have done this, you don't have to show your computations. You can simply copy your numerical answer from your calculator. However, if you have not provided the formula in the answer, you may receive no points at all!
The use of computers, PDAs, graphing calculators, phone calculators or other instruments that can communicate and/or are able to store alphanumeric information is strictly prohibited during exams (it is your responsibility to verify whether your calculator is allowed, otherwise you will end up in an exam without a calculator).
Q. Can I do extra work to improve my
Ans. Sorry. I believe that in order to be fair, I have to give every student
the same opportunity to do extra work. Obviously, this is not feasible.
However, on occasion I will allow you to resubmit an assignment for grade
Q. What can I do to check my
understanding of the material and to prepare for the exams?
Ans. Here are some of the things you can do:
- To prepare for the Quantitative problems part of the exam, you can do the quantitative problems from the end of each chapter, as well as from the Additional Questions on Blackboard plus the problems on Connect.
- For the media article part of the exam, you can read current newspaper and magazine articles on relevant topics
and make up your own questions and articles. The Discussion Group on Blackboard will also be useful, as will the occasional discussions in class based on media articles. You should try to answer the questions at the end of media
articles that are posted online.
- You should read the chapter and try to answer the questions posed on the web under Important Terms and Concepts.
- You can make an appointment to talk to me.
Q. What do I have to study from