University of Southern California – Marshall School of Business
BUAD 215: Business Finance, Fall 2012
Instructor
Dr. Bemis
E-mail: abarquez@usc.edu
Office Hours: Wednesdays 12:00 pm – 2:00 pm; or by appointment.
Office: Accounting 228
Extra Help: Through the Finance Learning Center in Bridge-203.
Description
This course integrates the core principles and fundamental analytical techniques used in
financial management to prepare the student to assess and manage the financial health of
the organization. Students will be exposed to accounting and financial information used
in making effective business decisions. Capital investment analysis and other budgeting
methods are studied in relation to goal attainment and organizational success. The effect
of activities in the functional areas of business on the financial viability of the
organization is emphasized.
Course Materials
_ Required: Ross, Westerfield, and Jordan: Essentials of Corporate Finance,
Seventh Edition. ISBN 978-0-07-7427689
_ Required: Calculator with financial functions: I recommend the Hewlett Packard 12c
for those who expect to continue in finance. You should bring your calculator to all
classes and exams. Absolutely No graphing calculators allowed.
Registration
If you are currently registered for the class, you must be present at one of the first two class
meetings to keep that registration. If you are absent from both, you will be dropped from the
class. If you are not registered for the class and wish to be, you should add your name to the signup sheet during both of the first two class sessions.
The success of this course is dependent on adequate preparation for classes by the
students and instructor. The most effective and efficient use of classroom time aims at
reinforcing or clarifying what YOU tried to learn on an individual (or group) basis prior
to coming to class.
You are responsible on exams for all material covered in the lectures. There is
significant lecture material not in the book and significant book material not in the
lectures, but the exams come from the lectures.
This is a course that requires your daily hands-on participation. You are required to
attend all class meetings, read the assigned materials, contribute to class discussions by
asking questions or presenting possible solutions to the questions of others, and to
complete the assigned problems.
Students bring experience, observation, reflection to the course. This class will
encourage students to think about the relationships between practice and theory, and to
find ways to draw from and build for their future endeavors. At the same time, this
course encourages participants to deepen their knowledge and understanding of
literatures and theoretical perspectives relevant to the study of Finance. Successful
students develop a sense of their goals and are motivated by questions to which they seek
answers through their study, professional practice, interactions with peers and faculty,
and on –going habits of inquiry.
Course Activities/Organization
Active participation is essential to successful completion of the course. The
preparation for such participation and the quality of participation each week will
constitute a major portion of the final grade assessment for each class member.
Course content will focus primarily on contemporary issues representing a broad
spectrum of areas in Finance. However, some allowance may be made for
accommodating additional issues raised during the course of the semester by current
events and the unique background of the class member interests.
Grading Basis
Your grade is made up of the following categories:
Homework Assignments and Group Project 5%
1. Homework Assignments: Students will receive approximately 8 assignments
over the course of the semester, each due before class starts on Wednesdays.
2. Group Project: Students should work in groups of three to four.
Rules of Engagement All group work will be self policed, except in extreme
circumstances. There will be one grade per group, no matter how the work load is
distributed among the group members
Grading Criteria:
Class Participation/ Attendance
10%
Midterm Exams
40%
Group Project
5%
Final Exam
45%
Total
100%
3. Class Participation, 10%. Class Participation is a measure of a student’s positive or
negative impact on the class. An example of a positive contribution is asking questions
in lecture. An example of a negative contribution is being disruptive in lecture,
especially during exams.
4. Midterm Exams, 40%. There will be two midterm exams during the semester.
5. Final Exam, 45%
Homework
The homework grade will be assessed over approximately 8 assignments, each due on
Wednesdays in class before class starts. Assignments will be given a grade of “check” or
“no credit”. A “check” will be assigned if homework is reasonably complete and correct,
while “no credit” will be assigned otherwise.
Homework assignments are to be completed in neat handwriting. There will be no
typed answers and no faxes accepted without permission before the due date.
Late homework will receive no credit.
Working in groups is encouraged, but each group member must turn in his or
her own separate write-up.
Homework will not be returned. Please keep a copy the homework assignment
before turning it in. Homework assignments are kept in storage.
Exams
All exams are closed book. You must take your exams in the lecture section to
which you are registered. Students must provide their own pencils.
You are required to be present for midterm exams and for the final exam during
exam week. There are no make- up exams.
Sunglasses, hats, and other headgear are prohibited during exams except for verifiable
medical or religious reasons.
Availability: I care about each of my students and will make myself available as
needed to ensure student understanding of the course materials. You may also email me
24 hours a day. I will be happy to meet with you during office hours or after class, by
appointment.
Class Rules: Conducting yourself in a professional manner is essential to being
successful in any environment. This classroom is a safe platform to practice behaving in
a professional manner.
Professional decorum is based on respect for your colleagues and peers. Professional
decorum demands that your behavior show respect for the value of their time and yours,
respect for their time and yours, respect for their expertise, and respect for earned
positions.
Laptop and Internet usage is not permitted during academic sessions. Use of personal
communication devices, such as cell phone, is considered unprofessional and also is not
permitted during academic sessions.
Respect: Active participation in class requires a safe and trusting environment. It is
important for us to respect the views and comments made by others, even if we disagree
with such comments. I encourage critical discussion, yet it must be respectful, polite and
professional.
Academic Dishonesty
The use of unauthorized material and communicating with fellow students during an exam are
unacceptable. Examples of academic dishonesty include copying off another student, allowing
someone else to copy one’s own work, and refusing to stop when exam time is called. The
minimum penalty for academic dishonesty is to fail the class. The maximum penalty is expulsion
from the university.
Blackboard
The primary means for communication for BUAD 215 will be the Blackboard System
(http://blackboard.usc.edu). Grades will be distributed through this system. You are responsible
for registering your email address with Blackboard so that you can receive course
material.
Disabilities
Any student requesting academic accommodations based on a disability is required to register
with Disability Service and Program (DSP) each semester. Please ensure that a letter of
verification is delivered to me as early in the semester as possible. Advance notice is very
important.
Course Outline and Readings
Class
Topic
Chapters
1
8/27 Introduction to Corporate Finance
1
2
8/29 Working with Financial Statements
3
3
9/5
4
9/10 Introduction to Valuation: The Time Value of Money
5
9/12 Future Value and Compounding
6
9/17
Present Value and Discounting
7
9/19
Discounted Cash Flow Valuation
8
9/24
Annuities
9
9/26
Perpetuities & Loan Amortization
10
10/1 Review
11
10/3
Midterm Examination
12
10/8
Interest Rates and Bond Valuation
Ratio Analysis &The Du Pont Identity
4
4
5
6
& More on Bond Features
13
10/10 Determinants of Bond Yields
6
14
10/15
Equity Markets and Stock Valuation
7
15
10/17
Common Stock Valuation
16
10/22
Net Present Value and Other Investment Criteria
17
10/24
Payback Rule
18
10/29
Profitability Index
7
8
8
19
10/31 Practice of Capital Budgeting
20
11/5
21
11/7 Depreciation
22
11/12 Review
23
11/14 Midterm II
24
11/19 Historical Variance and Standard Deviation
25
11/26 Risk and Return
Making Capital Investment Decisions
8
9
10
11
& The Security Market Line
26
11/28 Cost of Capital
27
12/3 Weighted Average Cost of Capital
12
Bankruptcy & Liquidation Process
13
28
12/5 Dividends and Dividend Policy
FINAL REVIEW
Wednesday 12/12 FINAL EXAMINATION 8:00 am – 10:00 am
12
14