Course:BA 435– Corporate Finance

Session:Spring 2007

Time:Monday-Wednesday-Friday - 9:00-9:50am

Location:Old Main, Room 306

Instructor:Dr. Riley Moore

Phone:(360) 438-4511

Email:

Office:Room 372

Office Hours:Tuesday &Thursday: 8:00-9:30am

Wednesday & Friday: 11:00am-noon

Other times by appointment

Website:

Text:Brigham, Eugene F. and Phillips R. Daves, Intermediate Financial Management. 9th Edition, Thomson/South-Western, 2007.

Course Description:

Course draws upon both finance theory and practical applications to help understand the key concepts that underlie the analysis and execution of financial decisions. Starting with the objectives of the firm and its Chief Financial Officer, the course will teach students how to apply time value of money principles, the capital budgeting framework, and analysis of financing options when making financial decisions.

Course Objectives:

Upon completion of the course, students are expected to be able to:

  • Identify elements of corporate investment projects.
  • Recognize elements and sources of corporate financing.
  • Identify factors affecting the flow of corporate funds.
  • Relate the Efficient Markets Hypothesis (EMH) to corporate financial decision making.
  • Define the present value of money.
  • Recognize the formulas involved in solving for different examples of present and future value.
  • Use a financial calculator to practice solving present and future value problems.
  • Evaluate investments by calculating interest rates, annual bond yields, and stock prices.
  • Discuss the factors that affect interest rates and borrowing costs for financing projects.
  • Recognize the advantages of using Net Present Value versus Internal Rate of Return to calculate the value of a project.
  • Recognize the significance of the debt-to-equity ratio to the financing decision and why firms may choose debt.
  • Recognize the effects of leverage and its relationship to cost of equity (how financing decisions affect the value of a firm).

Course Evaluation:

3 Exams(25% each) - 75%

Homework -20%

Attendance/Participation - 5%

Grade equivalents:

A100 - 944.00

A- 93 - 903.67

B+ 89 - 873.33

B 86 - 843.00

B- 83 - 802.67

C+ 79 - 772.33

C 76 - 742.00

C- 73 - 701.67

D+ 69 - 671.33

D 66 - 641.00

D- 63 - 600.67

F 59 – 00.00

W (withdrawal) - not computed in grade point average (GPA)

AU (audit) - not computed in grade point average (GPA)

I(incomplete) - not computed in grade point average (GPA)

P(pass) - not computed in grade point average (GPA)

Exams

Three exams to be given as in-class assessments. These exams will cover reading materials, questions, lectures and any material presented by guest speakers. They will consist of multiple choice, problems and essay questions.

Homework

Homework consists of each student answering selected questions at the end of each chapter in written form. They are due at the beginning of the class on the Monday following the week the material was covered. Electronic submissions are accepted, but students submitting electronically must assume responsibility for keeping hard copies of their submissions and for periodically checking to make sure the submission have been received.

Note: Financial calculator, such as the TI BA II Plus, is recommended.

Class Expectations and Policies:

Regular and prompt class attendance is an essential part of the educational experience.

  • Students are expected exercise good judgment regarding attendance and accept full responsibility for ensuring that work does not suffer from absences.
  • Students are also expected to attend each class on time and expected to participate in class discussions. Please read the chapters in advance of the lectures so that you are in a position to participate. As a courtesy to your classmates, make every effort to arrive at class on time.
  • Any student who misses three or fewer class meetings will receive a 2 percent bonus towards their final grade. In the event of an absence, you are responsible for all material missed. Make-up exams may be set in extreme emergencies only.
  • Any "Academic Dishonesty" violation (see SMU StudentHandbook for details) can result in an "F" in the course and may result in disciplinary action by the university. Academic dishonesty consists of any of the following acts:
  • Assisting another student on examinations, tests, quizzes or other assignments,
  • or receiving assistance from a student without permission of the instructor.
  • Using unauthorized materials for assistance during examinations, tests, quizzes or other assignments.
  • Plagiarism is the act of using the words and ideas of others without giving proper credit.·This includes having another individual write a paper or take an examination for you, directly quoting material without using quotation marks or proper indentation, and not giving credit for another person's original ideas and organization.

Access/Disability Services:

Section 504 of the Rehabilitation Act of 1973 and Americans with Disabilities Act of 1990 (ADA) mandates colleges and universities to provide "reasonable accommodation" to any enrolled student with a disability. The law protects the student's rights to have an equalized opportunity for learning and for participating in campus programs and activities. Students have the right to services and reasonable accommodations providing they meet the basic requirements to perform activities of the program.

Saint Martin's University Student Services includes a Disability Support Services office which works with students and potential students. We arrange those accommodations that allow our students to participate in classes and activities and have equal access to a full education here at the university alongside their fellow students, in whatever format the class is offered.

BA 435 - Tentative Course Outline

Week 1 (1/17&1/19) - Introduction & course overview

Chapter 1 – An Overview of Financial Management

Week 2 (1/22-1/26) - Chapter 2 – Risk & Return: Part I

Friday (01/26) - Last day for changing or adding a class & Last day to apply for May degree and graduation ceremonies

Week 3 (1/29-2/02) - Monday (01/29) – Meet at SMU Spangler Hall

Chapter 3 – Risk & Return: Part II

Week 4 (2/05-2/09) - Chapter 4 – Bond Valuation

Week 5 (2/12-2/16) - Chapter 5 – Basic Stock Valuation

Review for Exam 1

Week 6 (2/19-2/23) - No class Monday - President's Day (holiday)

Exam 1 (Chapters 1-5)

Chapter 6 – Financial Options

Week 7 (2/26-3/02) - Chapter 8 – Analysis of Financial Statements

Week 8 (3/05-3/09) - Chapter 9 – Financial Planning & Forecasting Financial Statements

Week 9 (3/12-3/16) - No classes - Spring vacation

Week 10 (3/19-3/23) -Chapter 10 – Determining the Cost of Capital

No Class Wednesday - Saint Benedict's Day

Review for Exam 2

Week 11 (3/26-3/30) - Exam 2 (Chapters 5-6 & 8-10)

Chapter 11 – Corporate Value and Value-Based Management

Friday (03/30) - Last day to withdraw from a class

Week 12 (4/02-4/06) -Chapter 12 – Capital Budgeting: Decision Criteria

No class Friday - Easter Recess (Good Friday)

Week 13 (4/09-4/13) - No Class Monday - Easter Recess (Easter Monday)

Chapter 13 – Capital Budgeting: Estimating Cash Flows and Analyzing Risk

Week 14 (4/16-4/20) - Chapter 15 - Capital Structure Decisions

Week 15 (4/23-4/27) - Chapter 18– Initial Public Offerings, Investment Banking, and Financial Restructuring

Week 16 (4/30-5/02) -Chapter 21 – Working Capital Management

Review for Final

Wednesday (05/02) – Last day of class

Week 17 (5/07-5/09) -Final TBA