BaylorUniversity
Finance 4360
Corporate Financial Management
Spring 2012
Dr. Steven P. Rich
Office:Hankamer 340
Phone Number:710-4547
E-mail:
Home page:
Backup Home page:
Course Objectives:
In Finance 4360, we examine how firms make optimal financial decisions. We explore this issue through discussions of how cash flow, time, risk,information, market imperfections,the absence of arbitrage,and the presence of options determine the value of real and financial assets. You should also gain an understanding of how to use Excel to analyzecorporate financial decisions.
Prerequisite:Finance 3310
Office Hours:
Mon:10:00 – 12:00; 1:00 – 1:25
Wed:10:00 – 12:00; 1:00 – 1:25
Note:If for some reason I will not be available for some of my office hours, I will post a note on my door. If possible I will also send out an email and/or make an announcementin class prior to the missed office hours.
Books:
Required: Corporate Finance(2nd edition) by Berk and DeMarzo
Optional: Study Guide to accompany Corporate Finance by Simonson
My Home Page:
My Finance 4360 web pages contain essential course materialsand may be accessed from my main home page by clicking on “Class Info” and then the “Finance 4360” link.
Grading:
Daily Quizzes 1300
Class Participation300
Final600
Total Possible Points2200
Your grade will depend on how many of these possible points you earn. Earning 1980points will result in an A, 1935 points a B+, 1760 points a B, 1715 points a C+, 1540 points a C, and 1320 points a D. Earning fewer than 1320 points will result in you flunking the course. It is possible that you will need fewer points than those listed.
Quizzes: Every Monday and Wednesday I will give a quiz at the end of class that is worth 50 points. I will count your 26 best quizzes out of the 28 quizzes this semester (no quiz on the first day). The quizzes will have one or more questions related to the topic we are currently discussing or to one of the topics we have recently covered.
Class participation: Class participation points will be earned by asking and answering questions in class. These questions can be about the notes or the homework problems. It may also depend to a (very) small degree on being in class. When we start a new topic, I will give the class a chance to ask questions about the topic. After all your questions are answered, I will then begin to ask questions of those in the class at random. The impact of your questions and answers on your class participation grade depends on the quality of your questions and on how well you answer my questions. If your name comes up and you are absent, your participation grade suffers more than if you had been in class and answered “I don’t know”.
Final: The final will consist of 10 short-answer questions worth 15 points each and six problems worth 75 points each.
WSJ Bonus Quizzes: Finance alumni consistently tell me that you need to be reading the WSJ every day. This is especially crucial in the semester you interview for a job. To give you an incentive to read the WSJ daily, I will give a series of WSJ multiple-choice bonus quizzes at the beginning of class each Monday and Wednesday. Each question will be worth one point and the total possible points for the semester should equal around 70 points. This is more than enough points to push you up by half a letter grade. For example, last semester a third of those who earned an A would have had a B+ without their WSJ points and half of those who earned a B+ would have had a B without their WSJ points. The Monday quizzes will have questions from the Friday, Saturday, and Monday WSJs. The Wednesday quizzes will have questions from the Tuesday and Wednesday WSJs. All questions will come from “locked” questions on the front pages of the first three sections of the WSJ (front section, marketplace, and money and investing). The questions should cover the main point of the article.
Course Policies:
Honor Code: Violations of the honor code (including cheating and not reporting cheating) will result in an F in the course and possible expulsion from the University.
Attendance Policy: The business school attendance policy states that students will receive an “F” in a class unless they attend at least 75% of all class sessions. I will use the quizzes to determine your absences.
Technology during quizzes and exams:During quizzes and exams, you may not at any time bring out (from your backpack or pockets) a computer of any kind (including handhelds), or a phone, or a calculator that contains text related to this class. I reserve the right to flunk anyone who breaks this rule for any reason. I will project the current time on the screen at the front of the room so that you will know what time it is even if you use your phone as a clock.
Statute of limitations:A two-week statute of limitations applies to appeals on grading. The two-week period begins when I post grades for quizzesand begins on the first day of next semester for the final.
Recommendations:
Spreadsheets: According to my former students, most finance graduates spend most of their day working in Excel. As a result, I recommend that you solve all homework problems using Excel in addition to solving them using pencil, paper, and calculator. Most of the problems from old exams will be easy to model in Excel, but many of the textbook problems should provide a nice challenge. In fact, some of the problems in the textbook are essentially impossible to solve without using Excel. In my opinion, spreadsheet should include 3 areas: an area into which data is entered, an area that displays solutions, and sometimes an area in which calculations are performed. The data entry and solutions areas should be highly visible while the calculation areas don’t need to be visible. You goal is to build flexible spreadsheets where it is easy to change any of the variables and see the new result.
Homework: Working homework problems is one of the best (if not the best) way to learn the material for this course. And the best problems for working to prepare for the exams I write are problems from exams I wrote in the past. I therefore highly recommend that you work the problems you will find if you follow the link “Questions from old exams” for each section of material we cover. The textbook also has many good problems you can work, but these are often VERY long with multiple steps. While the textbook problems are more complex than problems you will work on quizzes and even the final, they are good practice for the kinds of problems you will face after you graduate. I also suggest that you write out answers to the “Concept Checks” for each section and definitions for the “Key Terms”. When working homework problems, I recommend that you avoid looking at the book, the notes, and especially the solutions until you get stuck or think you have the correct answer. After you have tried the problems yourself, I recommend that you get together with a study group to discuss the homework. As you defend your answers and/or ask others about their answers, you will learn a lot more about finance than you would on your own. For the topics you find especially difficult, you might use MyFinanceLab at: At MyFinanceLab, click on “Study Plan” for additional problems (with hints) that are virtually identical to the problems in the book.WARNING: MyFinanceLab is a great tool if you are stuck, but using it to get hints (or even worse to show solutions) will give you a false sense of confidence. The hardest part of finance is figuring out what to do...and MyFinance lab does the heavy lifting for you.
Schedule:
Jan 9Introduction to class
11Begin Chapter 3
25Begin Chapter 4
30Begin Chapter 5
Feb6Begin Chapter 6 & 7
8Begin Chapter 10
13Begin Chapter 11
27Begin Chapter 14
29Begin Chapter 15
Mar7Begin Chapter 16
21Begin Chapter 20
April 2Begin Chapter 21
23Begin Chapter 22
27Review for final
May29:00 – 11:00: Final for 2:30 class
24:30 – 6:30: Final for 1:25 class
34:30 – 6:30: Final for 4:00 class
Note: According to Baylor policy, everyone must take their final at the scheduled time unless they have 3 (or more) exams on the same day. If you have 3 (or more) finals on the same day, talk to me about taking your final with one of my other 4360 class.
Syllabus for Finance 4360 - 1