California State Polytechnic University, Pomona
Finance, Real Estate and Law
College of Business Administration
Managerial Finance I
FRL 300
Section 01: Class #14223
1:30 p.m. - 2:45 p.m.
Section 02: Class #14224
3:00 p.m. – 4:15 p.m.
Monday & Wednesday
Building 163 – Room 1005
P. Sarmas
Winter Quarter 2016
www.cpp.edu/~psarmas
Catalog Description:
This is the first of two-course sequence for College of Business Administration majors. Topics include
the role of a financial manager; financial statement analysis; financial planning and control; time value
of money; bond and stock valuation; investment analysis techniques; and short-term financial
management. 3 Lecture/Problem solving.
Required Background or Experience:
Understanding of all topics in ACC 207/207A, and EC 201 and knowledge of algebra, good
comprehension of written and spoken English, and knowledge of computer spreadsheet analysis.
1.
Prerequisite:
Pass ACC 207/207A, EC 201, MAT 125, and microcomputer proficiency with a “C” or better.
2.
Prerequisite Justification:
Mastery of the principles and methods of managerial finance sequence requires knowledge of the
principles and methods of financial statement construction and basic principles of micro- and
macroeconomics. Modern financial analysis also requires the ability to utilize a variety of
computer software programs.
3.
General Education Contribution
The communication skills and analytical skills learned in English and mathematics courses
greatly enhance the students' ability to understand the concepts and apply the techniques of
financial management introduced in this course. Good comprehension of written and spoken
English and competency in college level algebra are essential for good performance in this
course.
Managerial Finance I – FRL 300 – Winter 2016
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Course Objectives:
The objectives of Managerial Finance I are to provide students with a sound introduction to the role of
finance in a business firm, especially firms organized as corporations, and to the principles and methods
of financial analysis and valuation. Topics covered include the role of a financial manager in business
firm, the operation of financial markets and the determination of interest rates, the interplay of
accounting and finance, the interpretation of financial statements, the use of financial ratios as a tool to
evaluate firm financial performance, financial forecasting and planning, the principles of the time value
of money, present and future values, rate of return, effective interest rates, techniques of bond valuation,
the effects of interest rate changes on bond prices, techniques of stock valuation, an overview of the
capital budgeting process, the sources and instruments of long-term financing, and the process and
procedures involved in raising funds for business firms.
Expected Outcomes:
In this course, business students, as prospective managers, will gain knowledge and acquire skills related
to financial decision-making process in a business firm. Upon successful completion of the course, the
student should be able to do the following:
 interpret financial statements and financial ratios and to use them to assess the financial strengths
and weaknesses of a firm,
 forecast external financing requirements,
 employ simple techniques of financial planning,
 apply compounding and discounting techniques to calculate present and future values of money and
rates of return,
 value bonds and stocks,
 utilize basic investment performance measures in making investment decisions, interpret them, and
explain the strengths and shortcomings of each measure,
 assess the impacts of changes in the economic environment on investment values and financial
decisions, and
 describe the basic sources and types of long-term financing.
Required Text:
Text:
Authors:
Publisher:
Fundamental of Corporate Finance
Stephen A. Ross, Randolph W. Westerfield and Bradford D. Jordan
Irwin-McGraw-Hill, 2016, Eleventh Edition
Recommended Texts:
Brealey, Myers, and Marcus
Fundamentals of Corporate Finance
Fundamentals of Financial Management
Brigham and Houston
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Managerial Finance I – FRL 300 – Winter 2016
Academic Integrity:
Violation of academic integrity include, but are not limited to, the following: cheating on an
examination, test or quiz; plagiarism on any paper or report; falsifying data, research or report;
representation of forged documents; misrepresentation of information in oral or written form. Such
violations will be dealt with severely by the instructor, the associate dean and the standard committee."
Course Requirements:
1.
2.
3.
4.
5.
6.
Class attendance and participation is required.
Reading the assigned chapter(s) prior to the meeting.
Practice problem assignments listed in the lecture schedule section.
Completing the homework assignments by stated due date.
Completing the mid-term and final examinations.
Please note that there are NO late assignment and NO make-up examination.
Examination:
1.
2.
3.
4.
5.
6.
7.
8.
Please note that you will need to present your Bronco ID at the time of examination.
You may be asked to sign the attendance sheet during the exam.
Turn-off your cell phones.
You will not be permitted to leave the classroom after examinations are distributed.
You will have to bring your own scantron and calculator (TI-BA II, HP 12C, or HP 10B).
You will be provided with a formula sheet.
Each examination is composed of true-false, multiple-choice and short-problem questions.
There are special instructions on Common Final Examination (topics, formula sheet, exam
schedule), which will be posted on the Blackboard.
9. Check your common final examination schedule.
10. ABSOLUTELY NO MAKE-UP!
Course Assistance:
Office Information
Location:
Telephone:
Fax:
E-Mail:
Building 164, #2053
(909) 869 2405
(909) 869 2124
psarmas@cpp.edu
Office Hours
Monday
Wednesday
Wednesday
Others:
4:30 p.m. – 5:30 p.m.
9:00 a.m. – 11:30 a.m.
1:00 p.m. – 1:30 p.m.
By appointment
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Managerial Finance I – FRL 300 – Winter 2016
CONNECT:
McGraw-Hill’s CONNECT is an online homework management system containing questions tied
directly to your textbook. We will be using Homework Manager for several assignments in this course.
Your CONNECT Access Code can be purchased one of several ways:
1) As part of the package with your new text in the bookstore
2) If you buy a used book, you can purchase access code for Connect online at
www.mhhe.com/support.
3) As an alternative, if you need assistance, please contact McGraw-Hill Technical Support by visiting
www.mpss.mhhhe.com/ or call: (800) 331-5094.
4) Once access code is purchased, to register for the course go to:
Section 01 – 1:30 – 2:45 p.m.:
https://connect.mheducation.com/class/p-sarmas-winter-2016---130-245-pm
Section 02 – 3:00 – 4:15 p.m.:
https://connect.mheducation.com/class/p-sarmas-winter-2016---300-415-pm
5) The homework assignments must be complete and submitted by the due date shown in Connect, in
order, to earn credit toward the course grade.
6) Make sure that when your assignment is completed you SUBMIT it for GRADING.
7) Please note, all registration, access, and other technical problems should be resolved by you and
McGraw-Hill’s technical support team.
8) Complete assignments by the due date. No Late Assignment.
Course Grade:
Grades are determined in the following format:
Homework Assignment …………… 15 percent
Mid-term Examination I…………….25 percent
Mid-term Examination II……………25 percent
Final Examination…………………...35 percent
Score Grade Score Grade Score Grade Score Grade Score Grade
93
90
A
A-
86
83
80
B+
B
B-
76
73
70
C+
C
C-
66
63
60
D+
D
D-
0
F
Managerial Finance I – FRL 300 – Winter 2016
LECTURE SCHEDULE
Monday: January 4, 2016
Student List Check
Introduction
Chapter 1: Introduction to Corporate Finance
Introduction to Study of Finance
Financial Management Decisions
Forms of Business Organization
Wednesday: January 6, 2016
Chapter 1: Introduction to Corporate Finance
The Goals of Financial Management
The Agency Problem and Control of the Corporation
Cash Flows between Firm and Financial Market
Financial Market and the Corporation
Monday: January 11, 2016
Chapter 2: Financial Statements, Taxes, and Cash Flow
Balance Sheet
Income Statement
Taxes
Wednesday: January 13, 2016
Chapter 2: Financial Statements, Taxes, and Cash Flow
Cash Flow from Assets
Cash Flow to Creditors
Cash Flow to Stockholders
Homework Assignment: See Connect for Due Date
Monday: January 18, 2016
Academic Holiday
Wednesday: January 20, 2016
Chapter 5: Introduction to Valuation: The Time Value of Money
Future Value and Compounding
Present Value and Compounding
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Managerial Finance I – FRL 300 – Winter 2016
Monday: January 25, 2016
Chapter 5: Introduction to Valuation: The Time Value of Money
More on Present Value and Future Value
Homework Assignment: See Connect for Due Date
Wednesday: January 27, 2016
Chapter 6: Discounted Cash Flow Valuation
Future and Present Values of Multiple Cash Flows
Valuing Level Cash Flows: Annuities and Perpetuities
Monday: February 1, 2016
Midterm Examination I (Chapters 1, 2 and 5)
Wednesday: February 3, 2016
Chapter 6: Discounted Cash Flow Valuation
Comparing Rates: The Effect of Compounding
Loan Types and Loan Amortization
Homework Assignment: See Connect for Due Date
Monday: February 8, 2016
Chapter 7: Interest Rates and Bond Valuation
Bonds and Bond Valuation
More on Bond Features
Bond Ratings
Bond Indenture
Wednesday: February 10, 2016
Chapter 7: Interest Rates and Bond Valuation
Some Different Types of Bonds
Bond Markets and Quotations
Monday: February 15, 2016
Chapter 7: Interest Rates and Bond Valuation
Inflation and Interest Rates
Determinants of Bond Yields
Homework Assignment: See Connect for Due Date
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Managerial Finance I – FRL 300 – Winter 2016
Wednesday: February 17, 2016
Chapter 8: Stock Valuation
Common Stock Valuation
Some Features of Common and Preferred Stocks
Monday: February 22, 2016
Chapter 8: Stock Valuation
Estimating Returns
Stock Quotations
The Stock Markets
Homework Assignment: See Connect for Due Date
Wednesday: February 24, 2016
Chapter 9: Net Present Value and Other Investment Criteria
Conventional vs. Non-Conventional
Net Present Value
The Payback Rule
The Discounted Payback
Monday: February 29, 2016
Midterm Examination II (Chapters 6-8)
Wednesday: March 2, 2016
Chapter 9: Net Present Value and Other Investment Criteria
The Average Accounting Return
The Internal Rate of Return
The Profitability Index
The Practice of Capital Budgeting
Homework Assignment: See Connect for Due Date
Monday: March 7, 2016
Chapter 3: Working with Financial Statements
Statement of Cash Flow
Common Size Analysis
Ratio Calculation and Analysis
Homework Assignment: See Connect for Due Date
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Managerial Finance I – FRL 300 – Winter 2016
Wednesday: March 9, 2016
Chapter 4: Long-Term Financial Planning and Growth
What is Financial Planning?
Financial Planning Models
Percentage of Sales Approach
External Financing and Growth
Some Caveats Regarding Financial Planning Model
Homework Assignment: See Connect for Due Date
Common Final Examination
March 12, 2016
Saturday
10:00 a.m. - 12:00 noon
Tentative Schedule
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