BUAD 306: Business Finance
Syllabus – Spring 2012
Professor:
Office:
Tom Chang
HOH 503
Office Phone: 213-740-1135
E-mail: tom.chang@marshall.usc.edu
Lecture Class
Mon./Wed.
8:00 – 9:50a
Room: JKP 110
Office Hours
Mondays
1:30 – 3:00p
Room: HOH 503
Finance Learning Center
Mon.-Thu.
Fri.
10:00a – 6:00p
11:00a – 2:00p
Room: Bridge 203
Introduction and Course Objectives
BUAD 306 is a fundamentals course in business finance. Finance is a way of thinking about
problems that involve money. This course is designed to provide an introductory framework for
understanding how financiers think, how they break down components of a financial problem, and
how they make decisions as investors and corporations in the financial market. By the end of the
semester, you should be familiar with financial vocabulary, understand aspects of financial theory,
develop skills in financial computation, and appreciate the underlying financial mindset as well as
incentives involved when solving problems of finance. You will learn how to determine risk, how
to make decisions, and how to value an investment as a potential financial opportunity.
Required Materials
• Fundamentals of Corporate Finance, Ninth (Alternate) Edition by Ross, Westerfield and
Jordan.
• Calculator with financial functions: I recommend the Hewlett Packard 17bII+ for those
who expect to continue in finance. Otherwise the Hewlett Packard 10bII has the functions
you’ll need for this class, and is less expensive. Many graphical calculators, such as the
TI-83, have built-in financial functions. You should bring your calculator to all classes and
exams. You will be extremely disadvantaged if you do not have your calculator during
exams. I will teach from the Hewlett Packard 10bII.
Prerequisites: ACCT 410, BUAD 250a, BUAD 280 or BUAD 305.
Course Notes: Copies of lecture slides and other class information are available through your
Blackboard account.
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Grading Summary:
Assignments
% of Grade
TESTS
Midterm #1
Midterm #2
Final Exam
20%
20%
35%
HOMEWORK ASSIGNMENTS
10%
CLASS PARTICIPATION
5%
TRADING GAME
10%
TOTAL
100%
Final grades represent how you perform in the class relative to other students. Your grade will not
be based on a mandated target, but on your performance. Historically, the average grade for this
class is about a (B). Three items are considered when assigning final grades:
1. Your average weighted score as a percentage of the available points for all assignments (the
points you receive divided by the number of points possible).
2. The overall average percentage score within the class.
3. Your ranking among all students in the class.
ASSIGNMENTS AND GRADING DETAIL
Your grade is made up of the following categories:
1. Exams. All exams are closed book, closed notes. Financial calculators are allowed and
recommended, but E-devices (cell phones, PDAs, I-Phones, Blackberries, other texting
devices, laptops, i-pods, etc.) are not allowed. You will be provided with any relevant
equations (and some irrelevant ones). All exams will use the Scantron multiple choice
format. Students must provide their own pencils
Any re-grade requests must be submitted to me in writing within one school week of the
distribution of correct answers. Any re-grading will encompass the entire exam.
2. Assignments. The homework grade will be assessed over approximately 6 assignments,
each due on Wednesday at 5pm. There will not be an assignment due the week of either
mid-term. Assignments will be given a grade of “check” or “no credit”. Homework will
be assigned a “check” if and only if the assignment is reasonably complete and correct.
Working in groups is encouraged, but each group member must turn in his or her own
separate write-up. Identical or nearly identical answers will result in “no credit” for all
parties. Solutions sets will be posted on the class Blackboard site.
3. Trading Game. Students will manage a portfolio of stocks of mutual funds over the
course of the semester. The grade for this assignment will be based on a their
performance, and a 1-2 page report describing their trading strategy.
4. Class Participation. 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.
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An example of a negative contribution is being disruptive in lecture (especially during an
exam).
MARSHALL GUIDELINES
Add/Drop Process http://www.usc.edu/dept/publications/cat2011/academic/policies.html In compliance with USC and Marshall’s policies classes are open enrollment (R-clearance) through
the first week of class. All classes are closed (switched to D-clearance) at the end of the first week.
This policy minimizes the complexity of the registration process for students by standardizing
across classes. I can drop you from my class if you don’t attend the first two sessions. Please note:
If you decide to drop, or if you choose not to attend the first two session and are dropped, you risk
being not being able to add to another section this semester, since they might reach capacity. You
can only add a class after the first week of classes if you receive approval from the instructor.
Statement for Students with Disabilities Any student requesting academic accommodations based on a disability is required to register with
Disability Services and Programs (DSP) each semester. A letter of verification for approved
accommodations can be obtained from DSP. Please be sure the letter is delivered to me (or to TA)
as early in the semester as possible. DSP is located in STU 301 and is open 8:30 a.m.–5:00 p.m.,
Monday through Friday. The phone number for DSP is (213) 740-0776.
Statement on Academic Integrity USC seeks to maintain an optimal learning environment. General principles of academic honesty
include the concept of respect for the intellectual property of others, the expectation that individual
work will be submitted unless otherwise allowed by an instructor, and the obligations both to
protect one’s own academic work from misuse by others as well as to avoid using another’s work
as one’s own. All students are expected to understand and abide by these principles. SCampus, the
Student Guidebook, contains the Student Conduct Code in Section 11.00, while the recommended
sanctions are located in Appendix A. http://www.usc.edu/dept/publications/SCAMPUS/gov/
Students will be referred to the Office of Student Judicial Affairs and Community Standards for
further review, should there be any suspicion of academic dishonesty. The Review process can be
found at: http://www.usc.edu/student-affairs/SJACS/ Failure to adhere to the academic conduct
standards set forth by these guidelines and our programs will not be tolerated by the USC Marshall
community and can lead to dismissal.
Emergency Preparedness/Course Continuity In case of emergency, and travel to campus is difficult, USC executive leadership will announce an
electronic way for instructors to teach students in their residence halls or homes using a
combination of Blackboard, teleconferencing, and other technologies. Instructors should be
prepared to assign students a "Plan B" project that can be completed at a distance. For additional
information about maintaining your classes in an emergency please access:
http://cst.usc.edu/services/emergencyprep.html
Please activate your course in Blackboard with access to the course syllabus. Whether or not you
use Blackboard regularly, these preparations will be crucial in an emergency. USC's Blackboard
learning management system and support information is available at blackboard.usc.edu.
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Incomplete Grades In incomplete (IN) grade may be assigned due to an “emergency” that occurs after the 12th week of
classes. An “emergency” is defined as a serious documented illness, or a documented unforeseen
situation that is beyond the student’s control, that prevents a student from completing the semester.
Prior to the 12th week, the student still has the option of dropping the class. Arrangements for
completing an IN course should be initiated by the student, and negotiated with the instructor.
Class work to complete the course should be completed within one calendar year from the date the
IN was assigned. The IN mark will be converted to an F grade should the course not be completed.
Assignment Submission Policy
Assignments must be turned in on the due date/time electronically via Blackboard. Any assignment
turned in late, even if by only a few minutes, will receive a zero. If your internet breaks down on
the due date, you must deliver a hard copy to me either in class, placed in my mailbox in Bridge308 by 5pm the day it is due.
Homework will not be returned. If you wish to keep a copy of your homework, please copy the
assignment before turning it in. Homework assignments are kept in storage in case they are needed
for re-grades or grade disputes. You can always ask to review your past homeworks.
There are some legitimate reasons for not turning in homework on time. However, you must
provide documentation for any such claim.
Confidentiality and IRB Information
Student grades and class performance may be analyzed for non-medical research. Any such
research will analyze aggregate behavior, and individuals will not be identified or identifiable in
any way. There will be no identifiable information obtained in connection with the study. Your
name, address or other identifiable information will not be collected. If you have any questions
about data collection and use, including your rights as a participant, please don’t hesitate to
contact me.
The University of Southern California’s Human Subjects Protection Program (HSPP) reviews and
monitors research studies to protect the rights and welfare of research subjects. Questions can also
be directed to HSPP:
University Park IRB, Office of the Vice Provost for Research Advancement, Stonier Hall, Room
224a, Los Angeles, CA 90089-1146, (213) 821-5272 or upirb@usc.edu.
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COURSE READINGS/CLASS SESSIONS
o
Students should read the assigned chapter(s) BEFORE the associated lecture date. Class
#
Date
1
1/9
Introduction to Corporate Finance
2
1/11
Financial Statements
1/16
HOLIDAY – No Class
3
1/18
Long Term Financial Planning and Growth
4
4
1/23
The Time Value of Money
5
5
1/25
Discounted Cash Flow Valuation
6
6
1/30
Discounted Cash Flow Valuation
6
7
2/1
Flex Day/Review
8
2/6
Midterm I
9
2/8
Interest Rates and Bond Valuation
7
10
2/13
Interest Rates and Bond Valuation
7
11
2/15
Stock Valuation
8
2/20
HOLIDAY – No Class
12
2/22
Net Present Value and Other Investment Criteria
9
13
2/27
Making Capital Investment Decisions
10
14
2/29
Some Lessons from Capital Market History
12
15
3/5
Flex Day/Review
16
3/7
Midterm II
3/12
SPRING BREAK – No Class
3/14
SPRING BREAK – No Class
17
3/19
Return, Risk, and the Security Market Line
13
18
3/21
Return, Risk, and the Security Market Line
13
19
3/26
Cost of Capital
14
20
3/28
Raising Capital
15
22
4/2
Financial Leverage and Capital Structure Policy
16
21
4/4
No Class
23
4/9
Financial Leverage and Capital Structure Policy
16
24
4/11
Dividends and Payout Policy
17
25
4/16
Behavioral Finance
22
21
4/18
No Class
26
4/23
The Financial Crisis of 2008
27
4/25
Flex Day/Review
Topic
Chapters
1
2, 3
1-6
7-10
Final Exam TBA
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