FINC 332 BUSINESS FINANCE Fall 2012
Fall 2012
Day & Time: Mondays/Wednesdays 5:00-6:15pm
Location: TBA
Prof. David Pollon
Email: davidpollon@yahoo.com
Course Description
Principles underlying the financial management of a business: time value of money, securities valuation, capital budgeting, cost of capital, sources of funds, capital structure policy, cash management and dividend policy.
Pre-requisite: ACCT 201 (Financial Accounting), ECON 201 (Introduction to Microeconomics), and ISOM 241 (Business Statistics)
Course Learning Objectives
Upon completion of the course, students should be able to:
1) Apply fundamental financial techniques to solve common business problems
2) Evaluate financial opportunities using relevant theory and practice
3) Critique strategic issues from a financial perspective
Course Learning Activities
Textbook Readings:
Chapter readings are assigned according to the schedule that follows. Textbook reading is required and is designed both to reinforce what is discussed in class, and to cover topics for which classroom time is insufficient.
End-of-Chapter Problems
Homework problems will be assigned for each chapter. These problems will not be collected or graded, but selected problems will be discussed in class. These problems mirror exam questions.
Assessment Tools
Exams = 90% of the final course grade
There will be three equally weighted exams, each worth 30% of the final course grade. Grades are awarded based on each student’s correct answers and his ability to clearly explain the calculation process.
Class Participation = 10% of the final course grade
This part of the student’s grade is based on the contribution to class discussions by way of asking and answering questions, and assisting in bringing about a productive learning environment. Attendance is also included in this part of the course grade.
Grading Scale
95-100 = A 88-91 = B+ 77-79 = C+ 65-69 = D+ 59 and below = F
92-94 = A- 84-87 = B 73-76 = C 60-64 = D
80-83 = B- 70-72 = C-
Attendance Policy
Attendance is included in the Class Participation element of the course grade. However, students missing
more than seven classes, whether excused or unexcused, will fail the course.
Course Textbook
Brigham, Eugene F. and Joel F. Houston. 2012. Fundamentals of Financial Management: Concise Edition, 7th ed. Mason, OH: Thomson South-Western
Supporting / Optional Reading Material
Besley, Scott and Eugene F. Brigham. 2008. Essentials of Managerial Finance, 14th ed. Mason, OH: Thomson South-Western
Course Schedule
1) Monday, September 3, 2012 – An Overview of Managerial Finance
Finance manager’s responsibilities, business ethics, agency relationships
- Readings: Chapter 1 (no homework)
2) Wednesday, September 5, 2012 – Financial Statements
Income statement, balance sheet, cash flow statement
- Readings: Ch. 3 (no homework)
3) M 9/10 Analysis of Financial Statements
Ratio analysis
- Readings: Ch. 4
4) W 9/12 The Financial Markets and the Investment Banking Process
Financial markets and institutions
- Readings: Ch. 2
5) M 9/17 The Time Value of Money
Future value, present value
- Readings: Ch. 5
6) W 9/19 The Time Value of Money
Annuities, uneven cash flow streams
- Readings: Ch. 5
7) M 9/24 Special Topics
8) W 9/26 The Cost of Money
Interest rates
- Readings: Ch. 6
9) M 10/1 Bonds
Characteristics and Valuation
- Readings: Ch. 7
10) W 10/3 Review
- Readings: Ch. 1-7
11) M 10/8 ***Exam #1***
- Readings: Ch. 1-7
12) W 10/10 Stocks
Characteristics
- Readings: Ch. 9
13) M 10/15 Stocks
Valuation
- Readings: Ch. 9
14) W 10/17 Special Topics
MIDTERM BREAK
No University classes held week of October 22
15) M 10/29 Risk and Rates of Return
Defining and Measuring Risk, Capital Asset Pricing Model
- Readings: Ch. 8
16) W 10/31 Capital Budgeting Techniques
Payback, net present value, internal rate of return
- Readings: Ch. 11
17) M 11/5 The Cost of Capital
Weighted average cost of capital
- Readings: Ch. 10
18) W 11/7 Capital Structure
Business and financial risk, optimal capital structure, degree of leverage
- Readings: Ch. 13
19) M 11/12 Review
- Readings: Ch. 8-11, 13
20) W 11/14 ***Exam #2***
- Readings: Ch. 8-11, 13
21) M 11/19 Dividend Policy
Signaling, stock splits, free cash flow
- Readings: Ch. 14
Wednesday, November 21 - Thanksgiving Holiday
22) M 11/26 Working Capital Policy and Managing Short-Term Assets
Cash conversion cycle, credit policy, managing receivables, inventory level and control
- Readings: Ch. 15
23) W 11/28 Managing Short-Term Liabilities
Accounts payable, short-term bank loans
- Readings: Ch. 15
24) M 12/3 Financial Planning and Control
Breakeven analysis, additional funds needed
- Readings: Ch. 16
25) W 12/5 Review
- Readings: Ch. 14-16
26) TBA ***Exam #3***
To take place during Final Examination Week
- Readings: Ch. 14-16
