FINC 3131-05 (CRN 80946)
Business Finance I
TTH2:00PM-3:15PM (Room ATK 207)
Fall 2017
Dr. Narain
Instructor: Office Hours:
Dr. Lakshmi S. Narain (Dr. Lucky) TTH1:00PM-1:45PM
419 ATKINSON Hall W 11:00 AM- 1:00 PM
Tel: (478)445-3521 (Office) and by appointment
email: website: lucky.gcsu.edu
Prerequisites: ACCT 2102, ECON 2106 or approved equivalent
Text: (Required) Fundamentals of Financial Management (Concise 8th Edition),
Brigham and HoustonISBN: 978 1285065137
(Suggested) Good Financial Calculator (TI BA II PLUS, HP10B, TI 83, TI 83 PLUS)
(Suggested) The Wall Street Journal, New York Times, Business Week
Course Description: A study of the basic theory and tools needed to understand and engage in the financial decision-making process. Topics covered include: the time value of money, risk and return, capital budgeting, cost of capital, financial statements and analysis, financial planning, and working capital management. The ethical dimensions of financial management will be addressed throughout the course as and where applicable. Also Refer to attached “Learning Objectives”
Course Policy: The weights for the final course grade are as follows:
Test1 (in-class)=25%; Test2 (in-class test 17%;project8%)=25%; Test 3 (in-class)=25%
Test 4 (in-class)=25%
Total =100%
*Optional Journal Articles 3 Bonus Points Maximum*
Students may optionally submit a short typed summary and commentary of each of 10 recent business journal articlesin financial management areas for a maximum of 3 bonus points.Suggested journals are Wall Street Journal, New York Times, Business Week. The articles should be dated from 21st August, 2017. The Summary and Commentary for each article should be separately titled. Copies of the articles should be attached. The bonus points will be added to your overall score based on exams and homework before a grade assignment for the course is made. For example, if you made a 68 point average based on your mid-term and final exams and home-work, your bonus points (say 2) will be added to the 68 and your course grade will be based on 70 (68+2). Assignment of points will be not only for content, but also for proper English (spelling, grammar and idiom). Points will not be prorated for submitting less than 10 articles, which means that you must submit 10 articles to be eligible for bonus points.
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Grade Distribution
A - 90% and above
B - Between 80% and 90%
C - Between 70% and 80%
D - Between 60% and 70%
F - Below 60%
Grades will not be given out over the phone or by email. You have to come to the class after the test date, when I return the test score and go over the test. Otherwise you have to come by my office during office hours to find out the score.
The exams will consist of multiple choice questions covering concepts and numeric problems. Students will be allowed to write/type key formulas on an 8x11 sheet (front & back) and use it on the exam. The formula sheet should not contain any worked out problems or any written cues to questions on the exam. It should have the name of the student and should be turned in to the instructor at the end of the exam. A student, who cannot take an exam on the scheduled date(s) due to circumstances beyond the student's control, (official, university related work, religious holiday or illness) should contact the instructor as early as possible with valid documentation, so that alternate scheduling can be made. If no such contact is made, a zero will be assigned for the exam and no make-up will be administered. The final exam is required to get a passing grade in the course.
Project:
The project (8%)will be a group project. Students for each group will be assigned by the instructor. Each group should get the financials for a publicly traded company for six years (2010-2016) and complete the project requirements, which will be posted later on my website. There will be no classes on Sept. 28th(Th), Oct. 3rd (T) and Oct. 5th(Th). Students in each group should meet during those class hours (either in the class room or elsewhere) to work on the project. The project will be due on Tuesday (Oct. 12th) at start of class. The project should be typed, with all data used as attachment. Again, details of the project will be posted on my website later.
Practice Problems
Practice Problems will be assigned throughout the semester; however, these will not be collected or graded. These will be given out periodically in class or via email or placed on my faculty web site. Students are strongly advised to do these problems. Their solutions will be subsequently made available, so that students can compare their work with the solution and learn from it. Students are encouraged to form study groups for the course.
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Academic Honesty
The integrity of students and their written and oral work is a critical component of the academic process. All written work submitted in this course will be individual work unless otherwise instructed. The submission of another’s work as one’s own is plagiarism and will be dealt with using the procedures outlined on pp. 64-67 in the Undergraduate Catalog. Remember that allowing another student to copy one’s own work is considered cheating. Also see the student Honor Code at the website:
Any form of cheating on the exams, in the use of the formula sheet or in the completion of homework assignments will result in a failing grade for the course and will also be reported to the university authorities for appropriate disciplinary action. (refer to above section on academic honesty)
Attendance policy: Attendance will not be taken, except during the 1st week of classes. However, students are encouraged to attend every class, since the course is calculation intensive and conceptual issues are discussed in class. Missing even a single class will put the student very much behind the class. Should a student miss a class for whatever reason, he/she will be
GROUND RULES FOR THIS CLASS:
- Come to class on time.
- Bring to class text book, assigned PPT Slides and Handouts and have them ready for access all the time
- Bring to class financial calculator and have it ready for access all the time
- When the instructor is explaining and working out a problem in class, participate in the
calculation using your calculator. This gives you practice.
- Do not hesitate to halt the instructor and ask for more explanation of discussed material, before the instructor proceeds ahead. If you do not, it will be assumed that everything has been understood.
- Take full advantage of the instructor’s office hours. If, sometimes, the posted office hours conflict with your other classes, make an appointment with the instructor. Students who have sought my help outside class have tremendously improved their performance in the course.
In addition to class attendance, students are advised to read the text, Power Point Slides and Handouts for each chapter, and work out problems prior to and after class so that active class participation and timely learning become possible. Power Point Slides as well as additional handouts for select chapters and calculator tutorials for TI BAII PLUS, TI 83/83 PLUS and HP-10B are on my web site.
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TENTATIVE SEQUENCE OF TOPICAL COVERAGE
Chapter 1
*Forms of Business Organization pp 6-8
*Goal of Management, Stock Price, Shareholder
Wealth, Profits pp 9-18
* Important Business Trends pp 15-16
* Business Ethics, Agency Problem pp 19-21
PPT Slides and Handout on my website for ch. 1
Chapter 3
* Financial Statements & Reports pp 56-73
Accounting Income, Depreciation, EBITDA,NOPAT,
Net Cash Flow, Net Operating Cash Flow,
Free Cash Flow, MVA and EVA pp 73-79; Handout
*Taxes pp 80-86; Handout
PPT Slides and Handout on my website for ch. 3
Chapter 4
*Financial Statement Analysis:
Financial Ratios and Du Pont Analysis pp 97-123
PPT Slides and Handout on my web site for Ch. 4
Chapter 2
* Financial Markets and Institutionspp. 25-46
PPT Slides on my web site for Ch. 2
Chapter 5
* Time Value of Money pp 138-172
Handout on my website for Ch. 5
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Chapter 6
* Cost of Money, Interest Rate and itsDeterminants pp 184-196
* Term Structure of Interest Rates/Yield Curve pp 197-199
* Interest Rates and Other Issues pp 206-210
Chapter 2 (Revisited)
* Capital Market/Stock Market Efficiency pp 46-51
Handout on Market Efficiency on my website for Ch. 2
Chapter 7
* Bond Valuation pp 217-246;
Select PPT Slides and Handout on Bond Valuation on my website for Ch. 7
Chapter 9
* Preferred Stock and Valuation pp 324-325
* Common Stock and Valuation pp 300-315
Handout on my website for Ch. 9
Chapter 8
*Stand-alone (Total) Risk, Market Riskand CAPM/SML
Per my handout for Chapter 8
*Stock Market Equilibrium Chapter 9 Appendix A pp334-336
Chapter 10
*Risk in Capital Budgeting:
Weighted Average Cost of Capital of the firm
Per material on my website for Ch. 10
Chapter 11
* Basics of Capital Budgeting pp 370-380; 390-391
Handout on my website for Ch. 11
Chapter 12
*Cash Flow EstimationPer material on my website for Ch. 12
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Tentative Exam and Other Important Dates
12tht Sept. (Tuesday) Test #1
28th Sept.-5th Oct. Th, T, Th No Class Project Time
10th Oct. (Tuesday) No Class/Fall Break
12th Oct. (Thursday) Project Due at Start of Class
17th Oct. (Tuesday) Test #2
19th Oct. (Thursday) Last day to drop course w/o academic penalty
16th Nov. (Thursday) Test #3
23rd Nov. (Thursday) No Class/Thanksgiving Holiday
28th Nov. (Tuesday) Optional Journal Articles Due
7th Dec. (Thursday) Last Day of Class
4th test
Note: Sequence of topics, mid-term exam dates may be changed at the discretion of the
instructor.
Religious Observance Policy
Students are permitted to miss class in observance of religious holidays and other activities observed by a religious group of which the student is a member without academic penalty. Exercising of one’s rights under this policy is subject to the GC Honor Code. Students who miss class in observance of a religious holiday or event are required to make up the coursework missed as a result from the absence. The nature of the make-up assignments and the deadline for completion of such assignments are at the sole discretion of the instructor. Failure to follow the prescribed procedures voids all student rights under this policy. The full policy and prescribed procedures are found at:
Assistance for Student Needs Related to Disability
If you have a disability as described by the Americans with Disabilities Act (ADA) and the Rehabilitation Act of 1973, Section 504, you may be eligible to receive accommodations to assist in programmatic and physical accessibility. Disability Services, a unit of the GCSU Office of Institutional Equity and Diversity, can assist you in formulating a reasonable accommodation plan and in providing support in developing appropriate accommodations to ensure equal access to all GCSU programs and facilities. Course requirements will not be waived, but accommodations may assist you in meeting the requirements. For documentation requirements and for additional information, we recommend that you contact Disability Services located in the GCSU Library Buildin.
Tel.: 478-445-5931
Fax: 478-445-1959
Email:
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Student Opinion Surveys statement
Given the technological sophistication of Georgia College students, the student opinion survey is being delivered through an online process. Your constructive feedback plays an indispensable role in shaping quality education at Georgia College. All responses are completely confidential and your name is not stored with your responses in any way. In addition, instructors will not see any results of the opinion survey until after final grades are submitted to the University. An invitation to complete the online opinion survey is distributed to students near the end of the semester. Your participation in this very important process is greatly appreciated.
Fire Drills
Fire drills will be conducted annually. In the event of a fire alarm, students will exit the building in a quick and orderly manner through the nearest hallway exit. Learn the floor plan and exits of the building. Do not use elevators. If you encounter heavy smoke, crawl on the floor so as to gain fresh air. Assist disabled persons and others if possible without endangering your own life. Assemble for a head count on the front lawn of main campus or other designated assembly area. For more information on other emergencies, please visit