Class Section Meeting Times Room
1
2
Tuesday and Thursday, 1:15 - 2:30
Tuesday and Thursday, 2:40 - 3:55
NSFL
NSFL
Professor :
E-mail :
Office :
Phone :
Lee Pinkowitz
Pinkowitz@msb.edu
402 Old North
687-2689
Tues and Thurs 4:00-5:30, and by appointment
This course is designed as an introduction to the fundamentals of corporate finance for undergraduate students in all business disciplines. We will study the aspects of financial decision making in a corporate environment. Students should gain a basic understanding of the important issues faced by corporate managers and the criteria that managers use to make financial decisions.
For finance majors, the course serves as a basis for more detailed study of topics in future finance classes.
For non-finance majors, the course serves as an introduction to the financial basis of corporate decisions and provides students with an appreciation of what the “finance people” of an organization are doing.
Ross, Westerfield, and Jordan, Fundamentals of Corporate Finance , Fifth edition, Irwin/McGraw-Hill,
2000. (Required)
Two course packs are available on the ground floor of Old North. The “Lecture” course pack includes lecture notes and is required . The “Problems” pack includes sample problems, exams, and projects and is strongly recommended.
A financial calculator is required . Although you may select any calculator you wish, I will be using the
Texas Instruments BAII Plus in class. Thus, if you have the same calculator, you can easily follow along.
Regardless of which model you choose, invest some time early in the semester to study the owner’s manual for your calculator to learn how to use the calculator effectively. The BAII Plus is available for around
$30.00 on the Service Merchandise and Office Depot web sites.
A subscription to the Wall Street Journal is strongly recommended. Other helpful periodicals include
Investor’s Business Daily, Business Week, and The Economist. Additionally, there are many useful financial web sites including cnnfn.com, bloomberg.com, and yahoo.finance.com. A more thorough list appears on the class web site.
Students must have Junior standing and be well versed in Financial Accounting and Statistics. A thorough

understanding of basic mathematics such as Algebra is crucial. Inside the course pack are primers to remind you of what you should know in these areas.
Lectures will stress the most important issues addressed in the text. You are responsible for all material covered in class, assigned readings, and problem sets. Therefore, it is important for you to attend class. You are responsible for all announcements made in class. Class lectures will sometimes involve working through problems. Thus, you should bring a calculator to class so that you may work problems and participate in class. You should also bring your “Lecture” course pack to every class.
There will be two exams, one during the course of the semester and a comprehensive final. Exams will cover material from lectures, assigned readings, and group projects. Exams will strive to test comprehension and not merely memorization skills.
The Midterm exam will be in the evening on Thursday March 1 st . The exam will be from 7:45 - 9:45 p.m. and the room is to be announced. You will be given 2 hours for the exam. There will be no class on that day, but I will be available to answer last minute questions.
All exams will be closed book, but each student will be allowed to have one side of standard notebook paper
(8 ½ x 11 inches) as a formula sheet. You may write anything you like on the formula sheet, but it must also have your name on it. Formula sheets will be turned in with each exam.
Students should organize themselves into groups of no less than 3 and no more than 5 . It is recommended that you do this as quickly as possible in order to ensure that group members have compatible schedules. I also encourage you to try and include both finance and non-finance majors in the group. It often helps to have members of a group who have different backgrounds and/or perceptions. Groups must submit the names of their members to me by the start of class on Thursday January 25 th .
Members of the group must all be from the same class section.
Three group projects will be assigned during the semester and the composition of the group will not change.
Sample projects are included in the “Projects” course pack. At the end of the semester, group members will evaluate each other so as to discourage any “free-riding”. The grading will be turned in to me and remain confidential. A low score from any group member is a cause for concern. A low score from all group members will adversely affect your grade on the projects. The important thing to remember is that the key to the group work is the effort and contribution put in by each member. Although it is inevitable that the work will not be evenly distributed among all the group members, the main goal is to teach (and learn from) the other members of your group. This goal can only be achieved if each member is willing to contribute to the best of their abilities.
Although it is given no numeric weight, class participation will be a determining factor if you are between two grades. When it comes to participation, quality, not quantity is important. I will not simply be providing credit for anyone who makes a comment. Instead, I want to encourage a classroom environment where we can discuss the topics we cover in a meaningful way. Finance is a difficult subject and you must immerse yourself in it to understand the material. Participation requires that you keep up with the readings, do sample problems, and perhaps most importantly, ask questions when you are confused. Often the greatest learning is spurred from student’s questions.

I will provide a list of problems for each chapter that highlight the important concepts. Although these problems will not be collected, it is strongly recommended that they be done to solidify your understanding of the material. Occasionally, we will either work through problems in class together or I may assign problems to be done during class individually and then discussed. In addition, study questions and their corresponding answers will be included in the course pack. Students should attempt to solve the problems on their own and use the provided answers as a check of their work.
The final grade for the course will be determined as follows:
Exams 55 %
Group Projects 45 % (15 % of the grade on each of three projects)
The exam grade will be calculated as follows: 33 % from the exam you score higher on and 22 % on the exam with the lower score . The group projects are each worth 150 points and the exam are each worth 275 points. Thus, there are 1000 points total in the class. The exam weighting scale is such that the exam you do the best on counts at a weight of 1.2 and the other exam is weighted at 0.8. Thus, consider the following example where each student scored 140, 135, and 120 on their projects.
Student A Midterm Score: 215 Final Score: 150
Final grade is 140 + 135 + 120 + (1.2 * 215) + (0.8 * 150) = 773
Student B Midterm Score: 175 Final Score: 248
Final grade is 140 + 135 + 120 + (0.8 * 175) + (1.2 * 248) = 832.6
Thus, there is a curve built into the grading system to account for the fact that one exam may not fully reflect your knowledge of the material.
Grading in the class will be done using a distribution. Hence, there is no “score” which will be the cutoff for a particular grade. Rather, there will be a percentage of students who will receive a particular grade.
Although the distribution is not set in advance, it will likely be similar to the distributions from previous years which are listed below:
A - 26.4%, B - 37.6%, C - 23.2%, D - 9.6%, F - 3.2%
A - 25.6%, B - 39.4%, C - 23.4%, D - 11.0%, F - 0.7%
Appeal Policy
Although I make every effort to grade in a consistent and fair manner, occasionally students feel that an error has been made. All appeals must be made in writing within two weeks of the return of the exam/project. The appeal should include a description of the question(s) that need to be reexamined as well as an explanation of why the original grade was incorrect. However, I reserve the right to regrade the entire exam/project which could result in a lower grade if errors are found which were originally marked as correct.
Absence from Exam
Absence from any exam will not be excused except for the most serious reasons. Such serious circumstances must be validated in writing by an appropriately accredited professional (i.e. medical doctor). No makeup exams will be given. For excused absences on the midterm, the final exam will account for 55% of the grade.
Any unexcused absences will result in a grade of zero for that exam.

Academic Integrity
I expect students to adhere to the highest standards of academic integrity. It is your responsibility to know the
Honor Code and what constitutes a violation. As stated in the Honor Council Pamphlet, “Without regard to motive, student conduct that is academically dishonest, evidences lack of academic integrity or trustworthiness, or unfairly impinges upon the intellectual rights and privileges of others is prohibited.”
You should re-familiarize yourself with the Honor Code by looking at these web sites: http://data.georgetown.edu/honor/clean.cfm (Honor System Document) http://www.georgetown.edu/honor/plagiarism.html (What is Plagiarism)
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Some notes on the Honor Code and this class:
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I am REQUIRED to report any suspected violation of the Honor Code to the Honor Council. I will pursue these matters earnestly and fully. This is not a threat, but for your information.
Collaboration among group members is expected, necessary, and required; however, collaboration across groups is prohibited and a violation of the Code.
Cheating on exams (in whatever form) will be vehemently pursued.
Working together on practice problems from the book or prior exams is acceptable and encouraged.
Studying together for exams is also encouraged. You may collaborate on the construction of your one page study sheet for the exam.
In your projects, if you gather data from sources whether they be on the web, in the library, etc., you
MUST cite your source. You all want to receive credit for your work, thus it is only right to give credit for the work of others. A simple rule of thumb: If you have any doubts CITE IT .

- (Tentative, Assignment due dates and exam dates are subject to change)
Week Day Date Topic Things to Have Read/Done
1 Tues 1/16 Introduction to class
4
3
10
11
12
6
5
7
15
13
14
16
8
9
2
Thurs
Tues
Thurs
Tues
Thurs
Tues
Thurs
Tues
Thurs
Tues
Thurs
Tues
Thurs
Tues
Thurs
Tues
Thurs
Tues
Thurs
Tues
Thurs
Tues
Thurs
Tues
Thurs
Tues
Thurs
Tues
Thurs
Tues
Thurs
3/6
3/8
3/13
3/15
4/10
4/12
4/17
4/19
4/24
4/26
5/1
5/3
3/20
3/22
3/27
3/29
4/3
4/5
2/13
2/15
2/20
2/22
1/18
1/23
Ch. 1 - Introduction to Finance
1/25 Chapter 2 - Financial Statements and Cash
Flows
1/30
2/1 Chapter 3 - Financial Ratios
2/6
2/8
Math and Accounting Primers
Cort Business Services Article
Group members due
General Mills Annual Report,
Motley Fool, and Fortune Articles
Chapters 5 and 6 - Time Value of Money
Chapter 7- Bond Valuation
Chapter 8 - Stock Valuation
Group Project #1 due
2/27
3/1 No Class - EXAM # 1,
Evening
in
, Chapters 1-3, 5-8
NO CLASS - Spring Break
Chapter 9 - Investment Criteria
Chapter 10 - Capital Expenditures
Chapter 12 - Capital Market Lessons
Chapter 13 - Risk and Return
Chapter 14 - Cost of Capital
NO CLASS - Easter Break
Chapter 14 - Cost of Capital
Chapter 15 - Raising Capital
Topics in Finance
EXAM # 1
Chapters 1-3, 5-8
Graham and Harvey Article
Last day to withdraw from class
Group Project #2 due
Read Prospectus for Trading Simulation
Group Project #3 due