Finance 4405: Fall 2012
Advanced Corporate Financial Management I
Dr. Mukunthan
Class period:
MW 9:30 to 10:45
Santhanakrishnan
Office:
BA 430
Classroom:
BA 211
Office Hours: By appointment
Office phone:
282-5747
Web address: Moodle
email address: santmuku@isu.edu
Instructor:
Course Objective:
FIN 405 utilizes business cases, lectures, and other techniques to extend and apply the
principles and concepts learned in FIN 315. After a review of basic business tools, we will
examine in detail ratio analysis, cost of capital, capital investment analysis, capital raising
process, and leasing analysis. Secondary objectives are to improve your critical analysis and
discussion skills.
Prerequisites:
You must have completed (with a passing grade) Finance 315. There are no exceptions to
the prerequisite requirements. You will be required to certify in writing that you meet the
prerequisites before taking the course.
A minimum grade of C- or better is required to fulfill all College of Business Core
Requirements, Major Requirements, and Specific Graduation Requirements. The C- or better
requirement extends to satisfying prerequisites for all College of Business courses. If you do
not pass this course with a C- or better, YOU WILL NOT RECEIVE A DEGREE FROM THE
COLLEGE OF BUSINESS.
Learning Objectives:
Consistent with the learning objectives for the College of Business, this course will address
the following Finance Objectives:
1) Given the appropriate information, the student should be able to apply Time Value of
Money concepts to estimate the value of a stream of cash flows at different points of
time.
2) Given the necessary information, the student should be able to identify relevant cash
flows used in a time value of money analysis.
3) The student should be able to evaluate the relation between risk and expected return of
an investment opportunity.
As well as the following Accounting Objectives:
1) Students should be able to explain the primary purpose of and information provided in
three key financial statements: balance sheet, income statement and statement of
cash flows
2) Given the necessary basic financial statements, the student should be able to evaluate
the following aspects of a company: liquidity (current ratio (or quick ratio), operating
efficiency (total asset turnover ratio), leverage (debt ratio), and profitability (return on
equity ratio).
For students to receive graduate credit in those courses designated at the 55XX level, specific and
evaluated activities and performances must be identified in the course syllabus.
Required Texts:
1. Corporate Finance: Core Principles and Applications, 3/e
2. McGraw Hill by Primus Online Cases
Grading:
Mini Quizzes (5 @ 2%)
Case Analysis
Case Discussion (4 @ 5%)
2 Midterm Exams (2 @20%)
Total………………………………………...…..
10%
30%
20%
40%
100%
The final grade will be based on your score in each of the above components.
Mini Quizzes
I will assess your knowledge of the content of each section of material using quizzes. There are
6 quizzes total. You may drop your lowest quiz from your grade calculation. There are
therefore no makeup quizzes given. The quizzes are a means to ensure that you are up-todate on the material covered in the class. The quizzes may also contain questions pertaining to
articles on current world and business events discussed in class.
Exams
Exams will be a combination of problems, essay or multiple-choice questions. Exams will
contain original questions that require critical thinking and an ability to apply class concepts to
hypothetical problems. Essay answers will be graded on writing as well as content. A formula
sheet will be provided.
Make Up Policy
You will not be able to make up any exams or cases you miss. If you miss an exam or case,
you will receive a zero for that proportion of your grade. Late cases will receive a grade of zero.
A paper is "late" if you turn it in any time after the start time of the class on the due date.
Attendance and Class Conduct
While I will not take attendance during class, it is the student’s responsibility to OBTAIN my
permission to miss a class PRIOR to the class. A message or email sent within a few hours of
class time will not be considered permission for absence. Missing more than 3 classes without
permission will result in dropping a grade (for example from A to A-).
Some kinds of student conduct make it difficult for other students in class to learn and would
also be unacceptable in the business world if you were attending meetings or working with
others. Things to avoid would include but not be limited to; arriving late for class, leaving class
early, accepting cell phone calls except in the case of an emergency and talking while other
students or the instructor are presenting material.
Written Case Analyses
You may work on these analyses in groups of three. These analyses are due at the beginning
of class. Each case analysis is worth 7.5% of your grade. A separate document outlines the
format and other information to help you prepare your reports.
Case Discussion
Case Discussion points are based on the contributions to the discussion and overall learning of
other members of the class (Attendance is not participation). Since we will discuss two cases on
each topic, you are graded on all the cases (and not just those that you are required to
complete your case analyses on).
On days when a case analysis report is due, once it is submitted we will discuss the case as a
group. I will lead the discussion, but I expect you to be able to provide an analysis of the issues
discussed. In this regard, it is important that you understand and be able discuss all aspects of
the case (You are expected to work on the full case and not just on the part you helped to
write).
Students with Disabilities:
Our program is committed to all students achieving their potential. If you have a disability or
think you have a disability (physical, learning disability, hearing, vision, psychiatric), that may
need a reasonable accommodation, please contact the ADA Disabilities & Resource Center
located in Graveley Hall, Room 123, 282-3599 as early as possible.
Academic Integrity:
Academic integrity is expected at ISU and the College of Business. All forms of academic
dishonesty, including cheating and plagiarism, are strictly prohibited, the penalties for which
range up to permanent expulsion from the university with “Expulsion for Academic Dishonesty”
noted on the student’s transcript. If you are unclear as to what constitutes academic
dishonesty, you can get a copy of the College of Business Policy on Academic Integrity from the
College of Business office in BA 202, or from the College of Business website at
www.cob.isu.edu, or refer to the ISU Faculty/Staff Handbook policy on academic dishonesty at:
www.isu.edu/references/fs.handbook/part6/6_9/6_9a.html.
How to do well in the class?
Unfortunately, there are no short–cuts to doing well in this class. Based on my experience in
teaching this class, the following steps have worked the best.
1) Master the contents covered in the lecture: If a topic is not clear you need to review that
content from the book and/or meet with me during the office hours. This typically takes
about an hour a week
2) Work on the suggested problems from the back of the chapter. This should take 2-3
hours a week.
3) Work on the case assignment. This important exercise is expected to take 2-3 hours a
week.
Therefore, in addition to attending the class sessions, I expect you to spend about 6 hours a week
in order to do well in the quizzes and exams.
Teaching Policies

My primary responsibility is to facilitate your learning. It is my job to structure exams and
assignments to assess whether your attained the course learning objectives. In other words, I
am here to enable you to pass the class. While passing the class is a valid concern, the only
action we can take is to learning the contents as best as we can and the grades will reflect the
learning outcomes.

I will not entertain requests for extra credit any time during the course of the term. The grading
procedure listed in this syllabus will be our ‘contract’ that we will abide by during the term.

You are expected to behave like a professional and treat other students as colleagues. If you
are going to miss a class meeting, make sure you inform me ahead of time. Please keep in
mind that there are consequences to every choice you make.

Cell phones/Smart Phones should be turned off when you enter the class room. If you are
expecting an emergency phone call, make sure you let me know before class time and put the
ringer on vibrate mode. If you have to respond (either voice or text), please step outside the
class room. If I see you on your phone, I will ask you to leave the room.

Communication policy: I prefer to communicate in person or by emails. I will respond as quickly
as possible to emails (within hours) sent between 8 am to 5 pm. Emails received after 5 pm or
during the weekends will be responded the next working day. If you want to meet with me, I will
be happy to meet you. Make sure you set up an appointment.

I will send you emails to your isu.edu account. If you do not check that account regularly, then
make sure you forward your isu.edu emails to your regular email address.

Please keep in mind that these communications are business communications. Therefore use
formats and language appropriate for such communications (i.e. if you send emails that do not
use proper format such salutation and proper grammar and sentence structure, I may not
respond to your emails.

You will be held responsible for announcements made in class.
Monday
Wednesday
August 27
August 29
Introduction to the course
September 3
Introduction to Corporate Finance and
Value Creation
September 5
No class
September 10
Discuss Warren Buffett Case
September 7
Ratio Analysis
September 17
Ratio Analysis
September 19
Quiz #1
Discussion of Krispy Kreme Case
September 24
The Financial Detective Case Due
Class Discussion of the case will follow
September 26
Cost of Capital
October 1
Cost of Capital
October 3
Quiz #2
Discussion of Nike Case
October 8
Teletech Corporation Case Due
Class Discussion of the case will follow
October 10
TVM Quiz #3
Capital Budgeting
October 15
Capital Budgeting
October 17
Capital Budgeting
October 22
Open Date
October 24
Quiz #4
The Investment Detective Case Discussion
October 29
Worldwide Paper Company Case Due
Class Discussion of the case will follow
October 31
Open Date
November 5
Midterm Exam
November 7
Capital Raising Process
Capital Raising Process
November 12
November 14
Discussion of Jet Blue Case
Quiz #5
November 19
Leasing
Thanksgiving Week: No Class
November 26
Thanksgiving Week: No Class
November 28
Leasing
December 3
Open Date
December 5
Primus Automation Case Due
Class Discussion of the case will follow
December 10
Review
Quiz #6
December 12
Closed week
Closed week
December 19
November 21
Final Exam: 7:30 to 9:30 AM