School Of Business Administration
Syllabus (Summer I 2016)
Financial Policy and Planning (iMBA-629)
School Of Business Administration
Syllabus
Course Title
Course Number
Semester
Instructor
Office Phone
Email
Office
Office Hours
appointment.
Web Site
: Financial Policy and Planning
: iMBA-629
: Summer I 2016
: Dr. D.K. Malhotra
: (215) 951-2813
: MalhotraD@philau.edu
: 104 Tuttleman
: 11:00 a.m. - 12:30 p.m. Monday and Wednesday or by
Credits
Course Type
: 3.0
: 3-0-3
: http://faculty.philau.edu/MalhotraD
Prerequisites: All students must have completed iMBF 505 or equivalents.
It is the students' responsibility to make certain that they have successfully completed
these courses. If at any time during the semester it is learned that a student has not
successfully completed these prerequisites, he/she will be dropped from the course
receiving, neither credit nor tuition refund.
Course Description:
This course focuses on the investment and financing decisions of the firms. Topics
include capital budgeting, cash management and cash flow analysis, capital
structure, dividends, and international operations. Financial policy making is
considered within the context of contemporary valuation and risk management
theories. Various financial planning models are analyzed in the course.
Course Objective:
The objective of this course is to further enhance the student’s ability to approach
and make financial decisions. This course is intended to be a blend of both the
theoretical and practical aspects of financial decision making.
Required Text(s) and/or Supplies:
Corporate Finance by Ross, Westerfield, and Jaffe, McGraw Hill/Irwin Publishing Co.,
tenth edition (ISBN: 0078034639), 2013 edition.
Additional Recommended Readings:
The Wall Street Journal; Barron’s Paper; Corporate Finance
Attendance:
Attendance is mandatory. You are responsible for what is covered in the class and
any absence on your part leaves you responsible for finding out what was presented
in class. You will benefit a lot from the course by doing problems and reviewing
concepts which are covered in the class. For every class that you miss without a
valid excuse, there will be a penalty of four points from your final grade and for
every half class that you miss there will be a penalty of two points from your final
grade.
Course Outcomes:
Upon course completion, students will be able to:
1. Demonstrate proficiency in analyzing financial statements to identify the
strengths and weaknesses of a firm
2. Develop the ability to analyze capital budgeting decisions of a firm using
traditional capital budgeting techniques of discounted cash flow analysis
3. Demonstrate the ability to estimate the cash flows from a project
4. Develop the ability to analyze the relationship between risk and return and
its impact on financial decision making
Overview of expectations for the course, including major assignments or
projects:
Assignments
Weight
Evaluates which Course
Outcomes?
In Class Quizzes (Each
20%
assignment will be equally
weighted)
Quiz 1
Outcome 1
Quiz 2
Outcome 2
Quiz 3
Outcome 3
Homework Assignments
60%
Outcomes 1, 2, 3, and 4
Financial Analysis of Company
10%
Outcomes 1, 2, 3, and 4
Group Project
Class Participation
10%
Outcomes 1, 2, 3, and 4
100%
Grade Distribution:
Letter Grade
A
AB+
B
BC+
C
CF
Grade
Points
4.00
3.67
3.33
3.00
2.67
2.33
2.00
1.67
0.00
Percent Allocated
93% or higher
90% to < 93%
87% to < 90%
83% to < 87%
80% to <83%
77% to <80%
73% to <77%
70% to <73%
<70%
Academic Integrity
Academic integrity is a policy about ethical behavior at Philadelphia University
regarding one’s intentions, decisions, and actions while conducting academic work.
It includes values such as avoidance of the following: cheating; plagiarism; copying;
the fabrication of information; and facilitating, or denying others access to
information. It expects honesty and rigor in research, course work, writing and
publishing. Academic Integrity is taken seriously in this course. Any student
violating the University’s academic integrity policy will be subject to appropriate
sanctions. The University’s complete academic integrity policy is available in the
Academic Catalog and University’s Student Handbook. Academic resources,
including information on citation and documentation for all written work, projects,
and presentations, are also available on the Learning and Advising Center’s website:
http://www.philau.edu/learning/writingguidelines.html.
Policy on Lateness, Absences, Makeup Work
In accordance with University policy, students are expected to attend class every
day with all relevant required course materials and work. If you are absent from
class, contact your faculty as soon as possible, preferably before the next class
meeting. Students remain responsible for any missed work, for work completed in
class and for work due and must arrange for that work to be delivered to the faculty
on time.
Serious illness, family emergencies, or other crises mean that students should
contact the Dean of Students Office as soon as possible (215-951-2740) and follow
up with a direct explanation to the faculty. Students are responsible for all work
related to this class; however, faculty may (but are not required to) make some
accommodation in terms of time of delivery and/or make-up exams for major tests.
Please consult with your faculty and your academic advisor to determine whether
you should withdraw from the course or request an incomplete grade in the case of
serious illness or crises.
Collection of Student Work for Assessment
Philadelphia University is committed to providing excellent and innovative
educational opportunities to its students. To help us maintain quality academic
offerings and to conform to professional accreditation requirements where relevant,
the University and its programs regularly examine the effectiveness of the curricula,
teaching, services, and programs the University provides. As Philadelphia University
sees appropriate, it may retain representative examples or copies of student work
from all courses. This might include papers, exams, creative works, or portfolios
developed and submitted in courses or to satisfy the requirements for degree
programs as well as surveys, focus group information, and reflective exercises.
Information on Digital Resources
This course is available on blackboard at http://bb.philau.edu
Academic Support Services: Gutman Library (www.philau.edu/library)
Gutman Library is a gateway to a variety of information resources. The homepage of
the library provides 24/7 access to online databases of articles, e-journal
collections, e-books, and specialized information to support this course. The library
building is wireless, has 80 available workstations (PCs and Macs), printers,
scanners, and copiers; as well as individual and group study spaces.
The following databases available in the library will be useful in this course:
Standard and Poor’s NetAdvantage
ABI/Inform and Business Source Premier
Wall Street Journal
Wall Street Journal – Asia, Financial Times
New York Times
Students can also contact the Reference Desk directly Reference@philau.edu for
more specialized help in identifying sources, or stop by the Reference Desk when
the library is open.
The Learning and Advising Center (www.philau.edu/learning)
The Learning and Advising Center provides one-on-one tutoring assistance for
writing, study strategies, test taking, and specific Philadelphia University courses*.
To make a tutoring appointment, students should stop by the Learning and Advising
Center in Haggar Hall or call (215) 951-2799. Academic resources, including
information on citation and documentation, note taking, and study strategies are
available on the Center’s website.
Technology Resources (http://www.philau.edu/OIT/)
The campus is wireless. If you need a computer, Gutman Library and Search Hall
have open access computers. For assistance with technology issues, students should
contact the Technology Help Desk at (215) 951-4648 or send an email to
helpdesk@philau.edu.
Case Reports: The cases should be presented in a manner acceptable in a large
corporation. The decision as well as the qualitative and quantitative reasons for the
decision should be communicated in a typed memo. The relevant information
should follow the memo in table form with supporting notes showing calculations.
Cases will be evaluated according to content, analysis, presentations, and continuity.
If any two cases are identical, plagiarism will be assumed and no credit will be given to
either case.
CASE ASSIGNMENT REQUIREMENT:
Case reports must be submitted as per the following format:
1. Title Page:
Name of the Case
Prepared by
Course Number
Date
2. Executive Summary
One half to one page summary of the issues involved and the strategy and
recommendations must be included.
3. An analysis of the case on the basis of the questions given at the end of the case.
Your analysis of each question must include the following:
4.
Issues Involved
Strategies to deal with those issues
Recommendations with rationale
Length of Case Preparation: 4-5 pages
5. Papers are to be word-processed with correct grammar and punctuation.
Information in the papers must be properly documented.
Guideline: Consult other business communication books on business reports
Tentative Course Outline:
05/16
Introduction to Corporate Finance
What is Corporate Finance?
The Corporate Firm
Goals of the Corporate Firm
05/18
Accounting Statements and Cash Flows
The Balance Sheet
The Income Statement
The Working Capital
Financial Statement Analysis
05/23
Accounting Statements and Cash Flows
The Ratio Analysis
Du Pont Analysis
Limitations of Financial Analysis
05/25 Capital Budgeting and Techniques
Net Present Value Approach
Internal Rate of Return; Profitability Index;
06/01 Capital Budgeting Techniques
06/06
Project Cash Flow Analysis
Incremental Cash Flows
Inflation and Capital Budgeting
Investment of Unequal Lives
06/08 Project Cash Flow Analysis
06/13 Strategy and Analysis in Using Net Present Value
Corporate Strategy and Positive NPV
Sensitivity Analysis
Scenario Analysis, and
Break-Even Analysis
06/15 Cost of Capital
Risk, Return, and Capital Budgeting
The Cost of Equity Capital;
06/20 Cost of Capital
06/22 Presentation of your Financial Analysis Project Report
ADDITIONAL RECOMMENDED READING:
Michael J. Jensen and William H. Meckling. "Theory of the Firm: Managerial
Behavior, Agency Costs, and Ownership Structure." Journal of Financial
Economics, October 1976, pp. 305-360.
Richard A. Lambert and David F. Larcker. "Executive Compensation,
Corporate Decision Making, and Shareholder Wealth: A Review of the
Evidence." Midland Corporate Finance Journal, Spring 1986, pp. 64-71.
John Burr Williams. "Evaluation by the Rule of Present Worth." Theory of
Investment Value, Amsterdam: North Holland Printing Co. 1938.
Harry Markowitz. "Portfolio Selection." Journal of Finance, March 1952, pp.
77-91.
William Sharpe. "Capital Asset Prices: A Theory of Market Equilibrium under
Conditions of Risk." The Journal of Finance, September 1964, pp. 425-442.
Franco Modigliani and Gerald A. Pogue. "An Introduction to Risk and Return:
Concepts and Evidence, Part I." Financial Analyst Journal, March/April 1974.
Franco Modigliani and Gerald A. Pogue. "An Introduction to Risk and Return:
Concepts and Evidence, Part II." The Financial Analyst Journal, May/June
1974.
Barr Rosenberg and Andrew Rudd. "The Corporate Uses of Beta." Issues in
Corporate Finance, New York: Stern, Steward, Putnam, and Macklis, 1983, pp.
42-52.
Alan C. Shapiro. "Corporate Strategy and the Capital Budgeting Decision."
Midland Corporate Finance Journal, Spring 1985, pp. 22-36.
Marc Ross. "Capital Budgeting Practices of Twelve Large Manufacturers."
Financial Management, Winter 1986, pp. 15-22.
Merton H. Miller and Franco Modigliani. "Corporate Income Taxes and the Cost
of Capital: A Correction." American Economic Review.
Stewart C. Myers. "The Capital Structure Puzzle." The Journal of Finance, July
1984, pp. 515-592.
Merton H. Miller and Franco Modigliani. "Dividend Policy, Growth, and the
Valuation of Shares." Journal of Business, October 1961, pp. 411-433.
John D. Finnerty. "Financial Engineering in Corporate Finance: An Overview."
Financial Management, Winter 1988, pp. 14-33.
Eugene F. Fama. "Random Walk in Stock Market Prices." Financial Analyst
Journal, September/October 1965.