SAMPLE SYLLABUS
Leonard N. Stern School of Business
New York University
Course Outline (Tentative)
C15.0007.003
Financial Management, Spring 2001
Tu-Th 9.30-10.45am
Room : Tisch 200.
Instructor : Deepak Agrawal
Tel : (212) 998-0319
Office : KMEC 9-180
E-mail : dagrawal@stern.nyu.edu
Web-site : www.stern.nyu.edu/~dagrawal
Office Hours : Tu-Th 11.00am-12.00noon
Course Description :
This course is designed to be an introductory course in Corporate Finance. It analyzes the three
broad areas of financial decision problems faced by modern corporations, viz. the investment
decisions (capital budgeting), the financing decisions (capital structure) and the payout decisions.
We will also study the fundamental principles of bond and stock valuation and risk return
tradeoff. Basic issues in International Corporate Finance, Mergers and Acquisitions and Futures
and Options will also be discussed.
Prerequisite for this course is the “Foundations of Financial Markets” course, C15.0002. You will
be expected to use Microsoft Excel AND Financial Calculator extensively for homework and
case assignments. Please make sure that the calculator has functions for Net Present Value
(NPV), Internal Rate of Return (IRR) and related formulas.
Required Readings
•
•
•
Ross, S., R. Westerfield and B. Jordan (RWJ), 1999, Fundamentals of Corporate
Finance, 5th edition.
Lecture Notes and Problems to be distributed in Class.
Harvard Business School (HBS) case studies.
(1) The Super Project (9-112-034)
(2) Other case(s) to be decided later
Other Recommended Readings
•
•
Brearly, R. and S. Myers (BM), 1999, Principles of Corporate Finance, 6th edition.
Chew, D., 1999, The New Corporate Finance-Where Theory meets Practice, 2nd edition.
Office Hours
Tu-Th 11.00am-12.00noon. You may call me or send me an e-mail to schedule an appointment
outside of office hours.
Requirements
Course requirements include [1] regular and active class participation [2] homework problems [3]
case analyses and/or projects [4] a midterm exam and [5] a final exam.
Reading and homework problems will be assigned for most lectures. The homework problems
are not generally to be turned in, but will of course be valuable in preparing for exams and cases.
Some problem sets may be required to be turned in at the discretion of the instructor. Solutions
will be provided. The assigned reading should be done before the corresponding class session so
that the student can contribute and participate during class in a constructive manner. Parts of the
homework problems will also be discussed in class and you should be prepared to solve them in
class. You will be required to do homework problems using both a calculator and a computer.
The cases are likely to be from Harvard Business School case collection, though the instructor
may assign other cases/ projects as well. The written analyses may be prepared by groups of three
to four students whose members will receive identical grades. It is your responsibility to form
your own groups, but if you need help please let me know. I expect everybody to be prepared to
discuss the cases in class.
The mid-term and final exams will be closed book, closed notes and based on material covered in
class. Computers are not allowed while taking the exams, and you’re supposed to bring your own
calculator with financial functions for the exam. There will be no make-up exams, and you must
take the exams at the scheduled time (no exceptions).
Although not required, reading of Wall Street Journal, business sections of New York Times and
other business publications shall enrich your class experience greatly.
Grading: The grades will be determined as follows:
Cases and Projects : 15%
Class Participation : 10%
Midterm exam
: 35%
Final exam
: 40%
Grade Distribution : Grading will be relative. Grade distribution will be based on the class
curve which has been set by the Finance Department. This curve is uniform across classes and the
instructor has no control on it. The specified grade distribution is only an approximation.
Cheating on exams will result in an F grade.
Mid-term exam date : 02/27/01, Tuesday
Final exam date : To be announced later.
Getting to know you: In order to know you better I would appreciate your filling up the
information sheet and returning it to me along with a recent photograph of yours pasted/stapled
on it.
Schedule: This schedule is preliminary and subject to change. The case due dates will be
announced in class. Readings from the Ross, Westerfield and Jordan text are noted with a “RWJ”
and are required.
Course Outline
[1] Broad issues in Corporate Finance
Readings : RWJ Ch 1.
[2] Time Value of Money
Readings : RWJ Ch 5 and 6.
[3] Firm’s investment decision : The Capital Budgeting Problem
• NPV, IRR and other investment criteria (Readings : RWJ, Ch 9)
• Identifying the project cashflows (Readings : RWJ, Ch 2, Ch 10)
• Project Analysis and Evaluation (Readings : RWJ, Ch 11)
[4] The “Super Project” Case
[5] Interest Rates and Bond Valuation
Readings : RWJ, Ch 7
[6] Valuation of Common Stocks
Readings : RWJ, Ch 8
[7] Risk-Return Tradeoff, CAPM and Security Market Line
Readings : RWJ, Ch 12,13
[8] Cost of Capital
Readings : RWJ, Ch 14
[9] Case analyzing the cost of Capital :
To be decided later
[10] Issues in Raising External Capital
Readings : RWJ, Ch 15
[11] Capital Structure Decision
Readings : RWJ, Ch 16
[12] Dividend Payout Decision
Readings : RWJ, Ch 17
[13] Case or Project
To be decided later
[14] Special Topics in Corporate Finance
• Mergers and Acquisitions (RWJ, Ch 24)
• International Corporate Finance (RWJ, Ch 21)
• Risk Management (RWJ, Ch 22)
• Options and Corporate Securities (RWJ, Ch 23)