SCHOOL OF BUSINESS ADMINISTRATION
SYLLABUS
FINC-301
FINANCIAL MANAGEMENT
FALL 2011
Instructor:
Dr. D.K. Malhotra
Office:
102 Tuttleman Building
Phone:
(215) 951-2813
E-mail:
Malhotrad@philau.edu
Web Page:
http://faculty.philau.edu/MalhotraD
Office Hours:
11.00 a.m. – 12:30 p.m. Mondays and Wednesdays or by appointment
Required Text:
Foundations of Finance: The Logic and Practice of Financial Management
by Keown, Martin, Petty, and Scott, 7rd
Edition, Prentice Hall/Pearson.
Calculators:
A calculator that has a power function will be necessary for the course.
Relatively inexpensive will suffice.
No programmable (text storing) calculators will be allowed for tests.
Calculators performing financial functions are allowable.
IT IS MANDATORY TO BUY A
BUSINESS/FINANCIAL CALCULATOR FOR THIS COURSE.
Course Description:
This is an introductory level finance course that will examine the role of the
financial decision-maker at the corporate level.
The emphasis will be on the goal of the firm, the efficient market
hypothesis, discounted cash flow analysis, and the trade-off between risk and
return.
Prerequisite:
All students must have completed ACCT 101, STAT 201, or MATH 321.
It is the students' responsibility to
make certain that they have successfully completed these courses.
If at any time during the semester it is learned that a student has not
successfully completed these prerequisites, he/she will be dropped from the
course receiving, neither credit nor tuition refunds.
Course Objective:
The objective of the course is to teach students how to approach and solve the
fundamental financial problems facing all businesses including non-profit and
government. Each topic explored in
the course represents a real-life financial problem facing the "firm".
Much of what the students will learn currently is in use in firms across
the state and nation.
Requirements:
1.
Attend class regularly.
2.
Do homework.
3.
Study class notes prior to next class and come prepared to the class to
participate actively in discussions.
4.
Be able to take time pressure tests.
Attendance:
Attendance
is mandatory. You are responsible
for what is covered in the class and any absence on your part leaves you
responsible for finding out what was presented in class.
You will benefit a lot from the course by doing problems and reviewing
concepts, which are covered in the class.
Grading:
EXAM I
25%
EXAM II
25%
FINAL EXAM
25%
QUIZZES
15%
Class Participation
10%
No late homework will be accepted. No makeup exams will be given. If you miss
an exam due to an unavoidable reason, the grade on the missed exam will be
transferred to the final exam.
THE FINAL EXAM IS COMPULSORY AND
COMPREHENSIVE. DO NOT EXPECT ANY
SCALING ON THE GRADES.
Help Sessions:
I do plan on devoting class before each exam reviewing the material, which will
be covered on the test.
Academic Honesty:
Students are expected to perform according to a code of academic honesty that
prohibits cheating on tests and plagiarizing others’ work.
Violation of this code may result in failure of the course.
Grading Policy:
The following policy will be followed for assigning letter grades in this
course.
93 and above
A
90 – 92
A-
87 – 89
B+
83 – 86
B
80 – 82
B-
77 – 79
C+
73 – 76
C
70 – 72
C-
Less than 70
F
Retention of Student Exams, Papers, etc:
Students’ materials will be retained for a minimum of four weeks into the
subsequent semester.
TENTATIVE COURSE OUTLINE:
08/23
Introduction to Financial Management (Chapters 1)
·
Forms of Business Organization
·
Goal of the Firm
·
Why Managers should maximize shareholders’ wealth
·
Ethics and
Shareholder Wealth Maximization
08/25
Shareholder Wealth Maximization and Motivating Management
(Chapter 1)
08/30
Financial Environment (Chapter 2)
·
Role of Financial Markets
·
Types of Financial Markets
·
Primary versus Secondary Markets
09/01
Financial Environment (Chapter 2)
09/06
Risks and Return (Chapter 6)
·
Meaning of Risk
·
Meaning of Return
o
Actual Return
o
Expected Return of a Security
09/08
Risks and Return (Chapter 6)
·
Measurement
of Expected Return of a Security
·
Risk of a Security
·
Measurement of Risk of a Security
09/13
Risks and Return (Chapter 6)
·
Meaning of a
Portfolio
·
Why Create a
Portfolio?
·
Expected Return of a Portfolio
09/15
Risks and Return
·
Measurement of Expected Return
·
Risk of a Portfolio
·
Measurement of Risk of a Portfolio
09/20
Risks and Return
·
Capital
Asset Pricing Model
·
Security
Market Line
09/22
Risk and Return and Review for Exam I
09/27
Day of Service
09/29
Exam I
10/04
Time Value of Money (Chapter 5)
·
Meaning of Time Value of Money
·
Why time value of money?
·
Concept of Present Value and Discounting
·
How to compute future value of a single cash flow?
·
Concept of Future Value and Compounding
·
How to compute future value of a single cash flow?
10/06
Time Value of Money (Chapter 5)
·
Calculation of Interest Rate
·
Calculation of time period
10/11
Time Value of Money (Chapter 5)
·
The Effect of Compounding
·
Multiple Cash Flows and Present Value
10/13
Time Value of Money
·
Annuities
·
Perpetuities
10/18
Bond Valuation (Chapter 7)
·
Features of a Bond
·
Valuation of an Annual Bond
10/20
Bond Valuation (Chapter 7)
·
Valuation of Semiannual Bonds
·
Bond Yields
10/25
Stock Valuation (Chapter 8)
·
Features of a Stock
·
Valuation of a Stock
·
Zero Growth Model
·
Constant Growth Model
10/27
Stock Valuation and Review for Exam 2
11/01
Exam 2
11/03
Capital Budgeting Analysis (Chapter 9)
·
Meaning and Significance of Capital Budgeting
·
Techniques of Capital Budgeting
·
Payback Period
·
Internal Rate of Return
11/08
Capital Budgeting Analysis (Chapter 9)
·
Modified Internal Rate of Return
·
Net Present Value
·
Profitability Index
·
Evaluation of various techniques of capital budgeting
11/10
Capital Budgeting Analysis (Chapter 9)
11/15
Capital Budgeting Analysis (Chapter 9)
11/17
Cash Flows Estimation for Capital Budgeting (Chapter 10)
·
Significance of Estimation of Project Cash Flows
·
Relevant versus Irrelevant Cash Flows
·
Impact of Net Working Capital Change on Project Cash Flows
·
How to Estimate Project Cash Flows?
11/22
Project Cash flows and Risk Analysis (Chapter 10)
·
Project Risk Analysis
· How
to Evaluate Projects in the Presence of Risk?
11/24
Thanksgiving Break (No Class)
11/29
Cost of Capital (Chapter 11)
·
Concept of Weighted Average Cost of Capital
·
Cost of each component of capital
12/01
Cost of Capital (Chapter 11)
·
How to Calculate WACC?
·
Review for Final Exam