Finance 301 – Spring, 2010, section 001
Syllabus
Professor - John McCollough: B.S. in Accounting, M.B.A., Ph.D. in Economics, 18 years work
experience in corporate accounting/finance.
Meeting Times: Monday and Wednesday from 2:30 pm – 3:45 pm
Meeting Place: Room 205
Office Hours: 12:30pm – 2:00pm Monday and Wednesday.
My adobe connect meeting room is at https://breeze.psu.edu/jdm37/office/
Once this is up and running you can reach me during office hours using adobe connect from your
home, workplace, or other. When I do not have office hours and I am in front of the computer
grading papers or working on my research I will try to have Adobe connect up and running so
that you can have more access to me.
Professor contact information: 1-610-285-5120 (w); jdm37@psu.edu (e-mail)
Required Text - Fundamentals of Financial Management – 11th edition by Brigham and Houston
Course Prerequisites –
Acctng 211
Econ 004
Mgmt 301
SCM 200 or Stat 200
Course Goal – This is a 3 credit introductory financial management class. The goal of this
course is to give the students an understanding of basic financial concepts and vocabulary. In
addition, students will be able to analyze and evaluate an investment using standard financial
management tools and theory.
Course Objectives * When given all known variables except for one with respect to a financial instrument the
student is expected to solve for the unknown variable
* The student must be able to accurately define all the determinants of corporate interest rates
* The student must be able to correctly evaluate the value of a bond and determine the amount of
bond discount or premium
* The student must be able to solve for the present value of an investment when the cash inflows
are both even and uneven throughout the life of the investment or when management has the
option to change an investment once the investment is under way.
* The student must be able to solve for the net present value, the internal rate of return, the
modified internal rate of return, and the discounted payback period of an investment. In addition,
the student needs to be able to accurately access the advantage and disadvantage of each of the 4
evaluation methods.
* If an investment has several possible outcomes, the student must be able to solve for that
investment’s level of risk per dollar of return
* The student must be able to solve for the estimated price of a share of stock by using the
required rate of return found by the CAPM method with the constant dividend growth model.
* The student must be able to determine the correct value of a firm when that firm is not traded
publicly by using the discounted expected free cash flow method.
* From a given set of financial statements the student must be able to calculate a series of
financial ratios, the firm’s weighted average cost of capital, the stock’s required rate of return,
cash conversion cycle, and the company’s free cash flow.
* The student will give a group presentation on a company that its group selects. The student’s
group will state whether or not they feel that the company is a good buy and the student’s group
will present detailed financial statistics which they have calculated (see above) to suppot their
argument.
Class Format – Class will begin promptly at 2:30 pm. Lecture will continue until 3:45 pm. The
last half hour of either a Monday or a Wednesday class will be spent working on problem sets in
collaboration with group members.These exercises will be similar in format to the exam
questions.. In addition, on a random basis the first 5 minutes of class will consist of an extra
credit question which will also be similar in format to an exam question. Class periods set aside
for exam reviews will be of a question and answer format.
Attendance policy – Although attendance is not mandatory for this class, prompt, on-time,
attendance will directly impact your grade positively. The reason for this is that there will be inclass practice exercises that will be mandatory and count towards your overall grade. In addition,
the exam questions will be look similar in format to the in-class practice exercises. There will
also be an extra credit question given out from time to time in the beginning of class. Students
who miss class or are late to class will not have the opportunity to make up the extra credit
question.
Grade Determination – There will be 4 exams. Your highest 3 exam grades will each count as
24% of your grade. Your lowest exam score will count only 12% of your grade. In addition, inclass practice exercises will count as another 11% of your grade. The grade for the in-class
practice assignments will be determined by adding up all correct points awarded for each
assignment and dividing that by the total number of points possible. Of the 11%, 3% will consist
of your group member’s evaluation of you as a team member and a contributor to the homework
problems. Finally, 5% of your grade is based on the in-class presentation due at the end of the
semester.
Your grade will be the average of your exam scores and the in-class practice exercises.
To receive an “A” your average must be 93% or higher.
To receive an “A-“ your average must be 90% - 92%.
To receive a “B+” your average must be 87% - 89%.
To receive a “B” your average must be 83% - 86%.
To receive a “B-“ your average must be 80%-82%
To receive a “C+” your average must be 77% - 79%
To receive a “C” your average must be 70% - 76%
To receive a “D” your average must be 60%-69%
Anything less than 60% will be considered an F
Exam Policy – The student must contact me within 24 hours of missing an exam and have a
valid and verifiable excuse. An alternative make-up exam will be scheduled at the instructor’s
convenience. If the student cannot make up the exam by the next class period then 30 points will
be subtracted from his/her exam grade. I reserve the right to inspect any student’s calculator at
any time during the exam.
Extra credit points will be added to your lowest exam score. Therefore, there is a possibility that
your lowest exam score might not end up being the lowest exam score and as a result it will be
weighted 24% and your next lowest exam score will be weighted 12%.
Student’s Expectations and Responsibilities- Please arrive to class on time and plan to remain
for the entire class period. In consideration of the professor and the other students, and in order
to maintain a college level learning environment, please refrain from side conversations while
the lecture is taking place. Please remain seated during the lecture and do not leave the classroom
during the lecture as this disrupts the focus and concentration of the professor and other students.
In addition, please have cell phone turned off.
The last 30 minutes of either Monday or Wednesday’s class will be spent in collaboration with
fellow students on in-class exercises. Please understand that this does not mean class is over.
You are required to stay during this time and to complete the in-class work. In-class work that is
not completed must be completed outside of the classroom. In-class work is assigned in lieu of
homework.
Tentative Class Schedule:
Week 1: 01/11 & 01/13
Lecture – chapters 1 & 2
Week 2: 01/20 (01/18 is MLK day)
Lecture – chapters 2
Week 3: 01/25 & 01/27
Lectures – chapters 3 & 4
Week 4: 02/01 & 02/03
Lectures – 4 & 6
Week 5: 02/08 & 02/10
Test review on 02/08 – chapters 1-4, and chapter 6
Midterm # 1 on 02/10 covers chapters 1-4 and chapter 6
Week 6: 02/15 & 02/17
Lecture - chapter 5 & 7
Week 7: 02/22 & 02/24
Lecture – chapters 7 & 8
Week 8 : 03/01 & 03/03
Lecture – chapters 8 & 9
Spring Break Week of 03/08 -03/12 * No classes
Week 9: 03/15 & 03/17
Lecture – chapter 9
Test Review on 03/17 – chapters 5,7,8,9
Week 10: 03/22 & 03/24
Midterm # 2 – covers chapters 5,7,8,9
Lecture – chapters 10
Week 11: 03/29 & 03/31
Lecture – chapters 11 & 12
Week 12: 04/05 & 04/07
Lecture – chapters 16
Week 13: 04/12 & 04/14
Test Review on 04/12 - chapters 10,11,12,16
Midterm #3– covers chapter 10, 11, 12, 16
Week 14: 04/19 & 04/21
Lecture – chapters 17 & 13
Week 15: 04/26 & 04/28
Lecture – chapters 18, 19, 20
Finals week – Final exam given – Chapter 13,17, 18,19,20
Academic Integrity
Senate Policy 49-20 ACADEMIC INTEGRITY:
Academic integrity is the pursuit of scholarly activity in an open, honest and responsible manner.
Academic integrity is a basic guiding principle for all academic activity at The Pennsylvania State
University, and all members of the University community are expected to act in accordance with this
principle. Consistent with this expectation, the University's Code of Conduct states that all students
should act with personal integrity, respect other students' dignity, rights and property, and help create
and maintain an environment in which all can succeed through their efforts. Academic integrity
includes a commitment not to engage in or tolerate acts of falsification, misrepresentation or
deception. Such acts of dishonesty violate the fundamental ethical principles of the University
community and compromise the worth of work completed by others.
Academic dishonesty includes, but is not limited to cheating, plagiarism, fabrication of information or
citation, prior possession of examinations, submitting work of another person or work previously used
without informing the instructor, or tampering with the academic work of other students
It is the policy in this course that while group discussion and collaboration for solving homework
problems and to discuss concepts is strongly encouraged, group efforts (outside of laboratory) for any
other reason, unless otherwise specified is not acceptable.
Failure to conform to the previously stated policies, especially during exams, will result in a '0' for the
particular activity and may result in an 'F' for the course.
For procedural guidance, please contact the Student Government Association for assistance from an
Academic Integrity Liaison.
Students who are charged with an Academic Integrity violation may not withdraw from a course while
a case is unresolved.