6N:225 MANAGERIAL FINANCE
University of Iowa
Des Moines
Prof. Art Durnev
Office S386
www.artdurnev.com
Email: TBA
Office hours: TBA
COURSE OBJECTIVES
The objective of the course is to provide an overview of the basic concepts and principles of
financial management. At the same time, it will give an insight into the decision making process of
financial managers. Topics to be covered include the time value of money, the tradeoff between
risk and return, valuation techniques, capital budgeting, the role of financial markets, corporate
governance, and risk management.
TEXTBOOK AND CASES
Textbook: Jonathan Berk and Peter De Marzo, Corporate Finance, 2nd edition
Case: Hedging currency risks at AIFS: HBS case 9-205-026
GRADING
Midterm Exam:
Final Exam:
1 Group Case:
Participation:
35%
45%
15%
5%
EXAMS
The exam dates will be fixed. You must take the exam on these dates, even if you have other
exams on the same day or during the same week. Extracurricular activities and family visits are
not valid reasons to request an alternative exam date. If you miss an exam due to medical
reasons, a doctor’s note should be presented.
CASE
The case will constitute 15% of your grade. The case is to be done in groups of up to 5 people. All
group members are expected to contribute to the case analysis. You will be required to evaluate
your teammates’ contribution. A case write-up has to contain an executive summary, the key
questions addressed, and a conclusion. The case write-up must be no more than 4 pages long
(excluding references and appendixes) plus appendices with the font size of 11 and line spacing
of 1.5. All tables and figures must be properly referenced in the text. Note that case studies rarely
have one correct answer.
IN-CLASS PRACTICE PROBLEMS
Practice problem sets and their solutions will be posted. They will be discussed during class, and
they are NOT to be handed in for grading. However, it is very important that each of you tries to
solve all the questions and understands the solutions provided. These questions will be very
valuable in helping you prepare for exams.
CLASS PARTICIPATION
You have to actively participate in class discussions to earn class participation grade which
constitutes 5% of your final grade. If you are frequently absent from class, your class participation
grade will be reduced.
SUBJECTS
1. FINANCIAL STATEMENT ANALYSIS
Chapter 2
2. TIME VALUE OF MONEY
Chapter 4
3. CAPITAL BUDGETING
Chapters 6 and 7
4. VALUATION OF BONDS
Chapter 8
Midterm Exam
5. FINANCIAL OPTIONS AND RISK MANAGEMENT
Chapter 20
Case 2: Hedging currency risks at AIFS
6. CAPITAL MARKETS AND PRICING OF RISK
Chapter 10
7. PORTFOLIO OPTIMIZATION
Chapter 11
8. CORPORATE GOVERNANCE ISSUES
Chapter 29
Models of corporate governance: who is fairest of them all
Explaining Differences in the Quality of Governance Among Companies: Evidence from Emerging
Markets (A. Durnev and E. H. Kim), Journal of Applied Corporate Finance, Vol.19, Issue 1, 16-24
Final Exam
Student Profile
6N:225 Managerial Finance
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