Course Perspective and Objectives
This course presents a survey of mainstream fundamentals of corporate financial management at the intermediate level. We will attempt to investigate most of the basic areas of the financial operations of the business corporation. These include such topics as financial statement analysis, risk, rates of return, time value of money, bond/stock/firm valuation, capital budgeting, capital structure, leverage, dividend policy, working capital management, financial planning, and mergers/acquisitions. I hope to give corporate finance an operational twist. That is, we will present concepts and techniques that are real-world in nature and which simulate the types of problems and situations you will encounter in the financial workplace. The material covered is intended to provide an essential component of your overall business/finance degree. While we will engage in some review, our objective is to upgrade the coverage of the above-listed topics from the principles level.
For those students taking Investments this semester (Finance 4043), please try to integrate the two courses. While each is fundamentally different in topical coverage, some basic concepts overlap. Use this fact to integrate common areas of financial knowledge.
Today a finance degree offers tremendous career and income potential. If you are not a finance major you are welcome in this class. If you think you might like to be a finance major, see me.
All serious students of business should read the Wall Street Journal. See me for a reduced semester subscription ASAP.
Course Prerequisites FIN 3013, ACC 3033, GB 3113. Some knowledge of micro/macro economics will be helpful.
Exams There will be three exams including the final. Exams will be problem-oriented in nature and will be similar in style and difficulty to the material covered in the problem set assignments. The final exam will be comprehensive. The dates of exams will be announced in class so as to allow ample time for preparation. Each exam will cover a specified block of material as outlined on the Assignment Outline.
Use of a Calculator Use of a "business" calculator (e.g., TIBAIIPlus, HP 12C or something similar) will be required for this course including the examinations. Your calculator should perform NPV and IRR functions. Note that our textbook is keyed to the use of a financial calculator.
Spreadsheet Analysis Many finance applications lend themselves to the use of a personal computer spreadsheet (like Lotus 123 or Excel). Spreadsheet analysis will be used on some assignments. Note: If you have not yet taken our micro-computer applications course here at TSU, I strongly encourage you to do so (Acct 3013 or CIS 3013). This course is a mandatory part of the finance degree.
Grades and Grading Policy
Grades will be assigned according to the conventional university scale:
90-100 A; 80-89 B; 70-79 C; 60-69 D; 59 and below F. While I don't
formally "curve" grades, some upward adjustment of a final numerical grade
may occur at the discretion of the instructor. Any curving will depend
on individual student class participation, attendance, homework submission
rate (in addition to homework average), and a discernable upward exam grade
trend. To qualify for any grade curving which may occur, students
must meet the Class Participation Policy and Assigned Homework Problems
requirement listed below. Grade computations as a percent of your
total numerical grade are as follows:
|First exam||20 percent|
|Second exam||20 percent|
|Comprehensive final||25 percent|
|Homework/class participation||30 percent|
|Internet Research Project||5 percent|
Class Participation Policy I require every student to participate in this course. Accordingly, class attendance is mandatory and constitutes a large part of your expected participation in the course. Excessive absences mean you are in non-compliance with the participation policy, a fact which may compromise a final marginal grade. Roll will be taken at each class meeting. Please note that a passing course grade average during the semester is not a substitute for regular class attendance and participation.
Assigned Homework Problems During the semester I will assign homework problems and questions to be handed in for grading. A listing of these problem sets appears at the end of this syllabus. Grades on this material will constitute the 30% homework/participation portion of your final numerical grade referred to above. Failing to turn in assigned homework means you are in non-compliance with the above-stated Class Participation Policy, a fact which could jeopardize your grade in the course as outlined above. Each homework assignment will be graded on the basis of 100 points. The 30% homework/participation percentage will be taken from a straight numerical average of all homework grades. Compliance with the homework requirement includes submitting the Internet Research Project. Late papers will be penalized. Solutions to all problem sets are in my office.
Ten Points on the Final Exam I will add ten (10) points to the final exam grade of any student meeting the Class Participation Policy and submitting all Assigned Homework problems (on time).
Internet Research Paper A short internet research term project will be assigned and will be worth 5% of your total grade. The instructions for this project will be distributed shortly. This assignment will be due at the end of the semester. This project will require you to assemble a financial picture of a NYSE firm of your choosing using (ONLY) data downloaded from the internet. The only typing required will be a short summary of your findings. More on this later.
Reading Assignments Chapter reading assignments are listed on the Assignment Outline. Reading the chapter assignment before the lecture will aid in understanding lecture material. Please try to read over the chapter before the material is discussed in class.
Large or Small Businesses? The concepts covered in this course apply to both large and small business organizations. With a few exceptions they apply to the small, privately-owned business as well.
Advice The best way to make a good grade in this course is to come to class, keep up with the reading material, and work the questions and problems. Both this course and the Investments course are homework intensive. Please keep this fact in mind this semester.
Request Please refrain from wearing any type of cap or head gear in class. No dipping.
Honor Code Homework should represent your work. You are not to give or receive help from anyone on assigned questions/problems--to do otherwise is to cheat. After you have tried to solve a problem and are at an impasse, see me. I will point you in the right direction so you can do well a particular assignment.
Text Fundamentals of Financial Management, Brief, 3rd ed., Brigham & Houston, Dryden Press 2002. The Study Guide to accompany this text is recommended, but not required. I will not use the Study Guide in class.
tables appear in Appendix A
2) Solutions to Self-Test Problems appear in Appendix B
3) Answers to end-of-chapter problems appear in Appendix C
4) Selected equations & data appear in Appendix D
5) The Self-Test questions appearing within each chapter are excellent vehicles to test your learning. I
also recommend the Self-Test Problems and Starter Problems appearing at the end of each chapter.
6) The instructor reserves the right to alter the assignment outline and list of assignments.
Chapter 1 An Overview of Financial Management
Chapter 2 Financial Statements, Cash Flow, and Taxes (omit pp 44-47 and 48-50)
Chapter 3 Analysis of Financial Statements
Chapter 4 The Financial Environment
Time Value of Money (omit "Fractional Time Periods," page 235). I
will not formally lecture on this
chapter in class. Instead we will go over the solutions to the end-of-chapter problems.
Chapter 7 Bonds and their Valuation & Appendix 7A - Zero Coupon Bonds
Chapter 8 Stocks and their Valuation (pp 308-313 optional; omit pp 326-332)
Chapter 5 Risk and
Rates of Return (include pages 326-332)
Appendix 5A, Calculating Beta Coefficients
Chapter 9 Cost of Capital
Chapter 10 The Basics
of Capital Budgeting
(omit "Multiple IRRs" page 403 and the "Post Audit," pages 409-413)
Chapter 11 Cash Flow Estimation
for Capital Budgeting (omit pp 438-441)
Appendix 11A Depreciation
Chapter 12 Risk and Capital Budgeting (pp 460 – 474 only)—selected topics
Chapter 13 Capital Structure
Appendix 13A Degree of Leverage
Chapter 14 Dividend Policy (pages 542 - 566 only)
Chapter 15 Financial Forecasting (pages 584 – 595 only) (time permitting)
Chapter 21 Mergers, LBOs,
Divestiture, & Holding Companies (time permitting)