FIN 315-04
Business Finance I
Spring 2010
Syllabus
Contact Information
Name: James A. Milanese
Office: 385 Bryan Building
Phone number: 334-4864
Office hours: Tuesdays and Thursdays 10:00 to 11:00
Email address: jamilane@uncg.edu
Prerequisites
ACC 201or 218 and 202, ECO 201 and 202
Overall Course Objectives
1. To introduce you to financial foundations, financial operations, and financial
principles.
2. To prepare you for future studies in finance.
Learning Outcome Goals
At the end of this course, students should be able to:
1.
Discuss the interrelated areas of finance, the role of finance within an
organization, forms of the business organization, agency problems, and the
factors that influence the stock price.
2.
Explain the information provided by the income statement, balance sheet,
statement of cash flows and how modifications of accounting data can be used
for making corporate and stock valuation decisions.
3.
Describe the nature of ratio analysis, the groups and types of ratios, the DuPont
system, and quantitative and non-quantitative factors in evaluating a company’s
performance.
4.
Describe the different financial markets, financial market instruments, the
components and factors influencing the interest rate, the yield curve, and
explanations for the shape of the yield curve.
5.
Define risk, return, diversifiable risk, market risk, and explain how to measure
and apply required risk and return in the context of an individual stock and a
stock portfolio.
6.
Demonstrate how to find the present and future values of lump sums and
annuities, solve for the time or interest rate in TVM problems, calculate periodic
and effective interest rates, and construct a loan amortization schedule.
7.
List the main classifications and characteristics of bond, calculate bond price
and various bond yields, and explain the importance of bond ratings and criteria
for rating bonds.
8.
Identify important stock ownership rights and terms, how to value common and
preferred stock, and understand stock market information in the newspaper and
levels of market efficiency.
9.
Explain the concept of a firm’s weighted average cost of capital, define and
calculate the component costs of capital using alternative approaches, calculate
the weighted average cost of capital, and identify situations when the use of the
composite WACC is not appropriate.
Required Texts
Eugene F. Brigham and Joel F. Houston, Fundamentals of Financial Management (The
Concise 6th Edition), Prentice Hall, Englewood Cliffs, NJ, 2009 (REQUIRED)
In addition to the textbook listed above, a financial calculator is required for this course.
Any calculator that is capable of performing time value of money, amortization, net
present value and internal rate of return calculations will be sufficient. The
recommended calculator for this course is the HP 10B or HP 10B II.
Practice problems
Each level will present practice problems for you to work through as you master the
content. In addition, the Game Board and Test Your Skills exercises are for your practice
and do not factor into your grade.
Exams
You will complete four exams. You will have one and a half hour to complete each
exam.
How Graded
Exam 1
Exam 2
Exam 3
Cumulative Final Exam
February 12
March 5
April 9
May 4
25%
25%
25%
25%
Topics Covered on Each Exam
Exam 1
Chapter 1: An Overview of Financial Management
Chapter 3: Financial Statements, Cash Flow and Taxes
Chapter 4: Analysis of Financial Statements
Exam 2
Chapter 16: Financial Planning and Forecasting
Chapter 2: Financial Markets, Institutions
Chapter 6: Interest Rates
Exam 3
Chapter 8: Risk and Rates of Return
Chapter 5: Time Value of Money
Chapter 7: Bonds and Their Valuation
Final Exam
All Material From Previous Exams plus
Chapter 9: Stocks and Their Valuation
Chapter 11: The Basics of Capital Budgeting
Chapter 10: The Cost of Capital
Your final grade will be based on the following scale:
92 – 100
90 – 91.9
88 – 89.9
82 – 87.9
80 – 81.9
78 – 79.9
72 – 77.9
A
AB+
B
BC+
C
70 – 71.9
68 – 69.9
62 – 67.9
60 – 61.9
Below 60
CD+
D
DF
Exam Guidelines
1. The exam will only be available for a 12-hour period. If it is not taken in that time
period, no consideration will be given.
2. From the time you begin the exam, you will have one hour and a half to complete
and submit each exam If you log-off, the clock is still running. No exam will be
accepted if this time limit is exceeded.
3. You are to work independently on the exam. You may not confer with anyone about
the exam.
4. You may not use anything but a calculator during the exam. Things such as books,
notes, recordings or other aids are not permitted. You are to take the exam as if you
were in a classroom with nothing but your pencil and calculator.
Any violation of points 3 or 4 above is a violation of the UNCG Academic Honor Code
and will result in an automatic grade of F in this class. In addition, formal charges will be
brought against the student.
Honor Policy
All graded material for this class is subject to the UNCG Academic Honor Policy. If you
are not familiar with this policy, please use the following link:
http://www.uncg.edu/reg/Policy/HonorPolicy.html
Student Disabilities:
All students with a disability requesting special services must go through the Office of
Disabilities Services. If you are requesting special accommodations, please bring your
paper work from Disability Services directly to me the first week of class. All such
information will be help in confidence.
The web link to this office is
http://ods.dept.uncg.edu/services/ .
Challenges
There are mini cases or challenges for each level. These are for the student’s benefit and
are not to be handed in. Each is designed to highlight certain aspects of the material from
that unit.
GameBoard Exercises and Test Your Skills
There are exercises and problems for each level. These are for the student’s benefit and
will not factor into your final grade. Like the challenges, each is designed to highlight
certain aspects of the material from that unit