Course Perspective and Objectives

The objective of this course is to introduce fundamental concepts and techniques involved in corporate financial management.  The ideas presented will be both 1) descriptive--what financial managers do when operating the firm, and 2) analytic--how the financial manager uses various accounting, economic, and quantitative techniques in achieving the objective of stockholder wealth (stock price) maximization.  The ideas presented will be real-world in nature and will simulate issues involved in the workplace.  I want this course to integrate with and help synthesize your other business courses.

A Quick Plug:  Finance as an area of study offers tremendous income/career potential.  See me if you think you might be interested in finance as a major.

General Information

Course Prerequisites Accounting (2043) and Economics(2013) as listed in the university catalog. Statistics, while not required, will be helpful.

Exams  There will be four objective-type exams including the final.  You cannot earn greater than 100% on any one exam.  Extra credit points exceeding 100% cannot be carried over to other exams or to the final average. Each exam will count for twenty-five percent of your final numerical grade. Exam dates will be announced so as to allow ample time for study and review. Each exam will cover a specified block of material as outlined on the Assignment Outline. You should be prepared to complete an exam in the allotted time. I must have a written reason for a missed exam.  Written explanations for missed exams must be submitted to me promptly (preferably before the missed exam) and will be accepted at the discretion of the instructor.

Homework Problem Assignments  Suggested end-of-chapter problems are listed at the end of this syllabus.  You should consider these as old-fashioned homework.  They are not to be turned in but you should be prepared to work them if you are taking this course.

Some strong advice:  Finance is a "contact sport."  Accordingly you must be prepared to devote some time to working problems in order to learn the material and do well on the exams.  Test questions will pull heavily from the assigned end-of-chapter problems.  We will attempt to go over every assigned problem in class.  When we have these review sessions you should have at your side your worked solution so that you can check your answers and resolve any mistakes or confusions you might have.  Don't wait until test time to find out you don't know something!  I have solutions to all assigned end-of-chapter problems in my office if you wish to check your answers or go over them in private.

Reading Assignments & Homework Responsibilities   Reading assignments are listed on the Chapter Topic Outline.  A light reading of the text assignments should be completed before the topic is discussed in class.  It is your responsibility to look over the review questions (in addition to problems) appearing on the syllabus.

Use of a Formula Sheet on Exams   I will distribute a formula sheet for each exam which will replicate formulas and equations exactly as they appear in the text (if it's not in the text, it won't be on the formula sheet).

Use of a Calculator   I will conduct the course under the assumption that you can use a business (not statistical) calculator, e.g., HP 12C, TIBAII+, or HP 10B.  Note that the text is keyed to calculator use.

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.  Some curving of the final numerical course average for some students may occur at the discretion of the instructor. Individual student performance, and class participation will influence your curve.  To qualify for any grade curving which may occur, students must comply with the Class Participation Policy listed below.

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.  Good attendance can raise a marginal letter grade.  Roll will be taken at each class meeting. It is your responsibility to sign the roll. Please note that a passing test grade average during the semester is not a substitute for regular class attendance and class participation.

Large or Small Businesses?  The concepts covered in this course apply to both large and small, privately-owned  business organization as well.

Advice   You must stay current with the material in order to do well in the course.  Cramming is ill-advised and will prove unproductive. If you don't understand something come by the office.  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.  Good note taking is important in this course and will highlight what you need to know for the exams.  Read over your notes the same day you take them.

Text  Principles of Managerial Finance,  Brief (2nd edition) by L. Gitman, 2000.

Optional  Study Guide to accompany the text by S. Eakins. The Study Guide is strongly recommended--use your discretion.

Optional The Wall Street Journal. Be a prepared business student-read the WSJ. We will try to touch on selected journal topics as they come up. See me for a reduced semester subscription to the Wall Street Journal.  You also get the inter-active edition as a freebie.  The WSJ may be helpful in your term paper assignment.  Feel free to share a copy.

The PMF Disc  Accompanying the text is the CD-ROM software disc, PMF.  This software is keyed to the text chapters and problems and is composed of three modules, the PMF Tutor, the Problem-solver, and Excel Spreadsheet templates.  This software can aid in working numeric intensive problems and can help in self-testing.  I strongly encourage the use of the PMF disc throughout this semester.  If you sell you text at the end of the semester please include the PMF disc.

The Internet and Finance

The internet offers a tremendous portal to information on financial markets and business corporations.  While there will be no formal assignments using the internet, I usrge you to make use of this invaluable information resource.

Americans with Disabilities Act  If you have special needs due to a learning disability or other disability, please contact Dr. Dwayne Snyder, Room 239 of the Admin Bldg., 254-968-9373.

CHAPTER TOPIC OUTLINE

Appendix A - Financial Interest Factor tables
Appendix B - Solutions to Self-test Problems
Appendix C - Answers to Selected End-of-Chapter problems
Appendix D-  Instructions for using the PMF software

Chapter 1.   Overview of Managerial Finance

Chapter 2.  Institutions, Markets, Interest Rates, and Corporate Taxation
   Include pages 83-87.  Omit Theories of the Term Structure, page 42.

Chapter 4 Financial Statements, Depreciation, & Cash Flow (omit pages 83-87)
 

FIRST EXAM

Chapter 5 Financial Statement Analysis (Ratio Analysis)

Chapter 6 Time Value of Money (Try using Tutor from the PMF disc for this
   chapter)

Chapter 7   Risk and Return
 

SECOND EXAM

Chapter 3 Basic Corporate Securities:  Bonds and Stocks

Chapter 8 Valuation of Bonds and Stock (and Firms)

Chapter 11 The Firm's Cost of Capital
 

 THIRD EXAM

Chapter 9  Capital Budgeting and Cash Flow Principles

Chapter 10 Capital Budgeting Techniques, Certainty & Risk

Chapter 12  Leverage and Capital Structure
   (omit page 407 on asymmetric information and pages 410-417)

Chapter 13   The Firm's Dividend Policy
  (exclude the accounting aspects of stock splits/dividends, pages 443 & 447)

Chapter 14  Financial Planning (Pro forma Income Statement and Balance Sheet analysis only; omit pages
463-471 on cash budgeting).  This chapter will be covered time permitting.
 

  FINAL EXAM
 

 (The instructor reserves the right to alter the syllabus according to topic and time
  constrains.)
 
 

  PLEASE BRING YOUR CALCULATOR AND TEXTBOOK TO CLASS