Villanova University
Villanova School of Business
Department of Finance
PRINCIPLES OF FINANCE (FIN 1113)
FALL 2009
Instructor: Dr. Gunita Grover
Office: 2011 Bartley
Phone: 610.519.4322
Fax: 610.519.6881
Office Hours: Tuesday and Thursday: 9:00 – 9:45 am, 1:00 – 2:15 pm and by appointment
Email: gunita.grover@villanova.edu
Web Page Address: www.homepage.villanova.edu/gunita.grover
Course Prerequisites: The prerequisites for this course are ACC 1101, DIT 2010 (or MAT 1235 or
MAT 2310 or MAT 4310 or ECE 3720), ECO 1001, ECO 1002 and DIT 1006. It is the student’s
responsibility to be certain that the prerequisites have been successfully completed. If at any time
during the semester it is determined that a student has not completed the prerequisites, the student
can be administratively dropped from the course without credit or tuition refund. (DIT 2010 may be
taken concurrently with FIN 1113)
Required Text: Essentials of Corporate Finance by Ross, Westerfield and Jordan, 6th edition,
McGraw Hill/Irwin, 2008.
Recommended Reading: It is recommended that you read the Wall Street Journal to stay abreast of
business news. We will discuss articles from the WSJ in class. All VSB students have a
subscription to the paper and electronic versions of the WSJ.
Course Objective: This course introduces the fundamental tools used in financial decision making.
It discusses financial markets in which a business operates and the market for stocks and bonds
(where securities are first issued and then traded). It includes a study of the time value of money, the
concepts of return and risk and the valuation of bonds and stocks. Capital budgeting, the cost of
capital and financial statement analysis will be emphasized. There will be an examination of
working capital policies and practices.
Calculator: It is required that you have access to a financial or business calculator. The
recommended calculators for this class are the TI BA II Plus or the HP 10-B. Appendix D of the
text includes instructions on the use of these two calculators. If you have a TI-83, that will be
adequate, as well. The financial calculator will help you solve problems efficiently, especially on
exams. It will also be a useful tool in your professional and personal lives. Please bring your
calculator to class.
Instruction Format: The format of this course is mainly lecture with some class discussion. It is
important that the student be prepared for each class meeting by reading ahead the materials to be
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covered in class. You will be required to complete some assignments in class, and will be asked to
bring your laptop to class on certain days.
You are encouraged to solve problems from the end of the chapter soon after the material is covered
in class. Answers to selected (odd-numbered) problems are given in Appendix C of the book.
Answers to even-numbered problems can be obtained from the instructor. You are required to turn
in selected problems from the end of the chapters. The assigned problems and their due dates will be
posted on the instructor’s web site.
Laptop Policy: Students will be required to bring their laptop computers to class on certain days to
complete in-class assignments.
Grading: Your grade for the course will be determined as follows:
Exam 1
Exam 2
Exam 3
Exam 4
Final
Assignments
Class Participation
Total
15%
15%
15%
15%
25%
12%
3%
100%
Exam Make-up Policy: You have been notified of your exam dates in advance and are expected to
take your exams on the scheduled dates. You must notify me in advance and provide appropriate
documentation if you are not able to take a scheduled exam. If I determine that your absence
qualifies as an excused absence, (i.e. your absence was totally unavoidable), the weight of your
missed exam will be added to the weight of the final exam (which will be comprehensive). If I
determine that your absence is not excusable, or if you failed to notify me in advance, you will
receive a zero for the missed exam.
Attendance: You are encouraged to attend class regularly. Attendance will be taken at the
beginning of each class. Please be courteous towards your peers and instructor, by turning off all
electronic devices before you enter the class room and remain seated in the room during the 75
minutes of class time. Your active participation in class discussion is strongly encouraged.
Completion of in-class assignments will be counted towards your class participation grade.
Academic Integrity Policy: The code of Academic Integrity of Villanova University addresses
cheating, fabrication of submitted work, plagiarism, handing in work completed for another course
without the instructor’s approval, and other forms of dishonesty, such as discussing the content of an
exam with a student who has not yet taken the exam. For the first offense, a student who violates the
Code of Villanova University will receive 0 points for the assignment. The violation will be
reported by the instructor to the Dean’s Office and recorded in the student’s file. In addition, the
student will be expected to complete an education program. For the second offense, the student will
be dismissed from the University and the reason noted on the student’s official transcript.
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Disability: It is the policy of Villanova University to make reasonable academic accommodations
for qualified individuals with disabilities. If you are a person with a disability please contact me
after class or during office hours and make arrangements to register with the Learning Support
Office by contacting 610-519-5636 or nancy.mott@villanova.edu as soon as possible. Registration
is needed in order to receive accommodations.
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FIN 1113
Course Outline
Fall 2009
Dr. G. Grover
Date
T Aug 25
R Aug 27
Chapter Topic
1
Introduction
1
Introduction to Financial Mgt
T Sep 1
R Sep 3
2
3
Financial Statements
Financial Statement Analysis
T Sep 8
R Sep 10
3
Financial Statement Analysis
Exam 1 (Chapters 1 - 3)
T Sep 15
R Sep 17
4
5
Time Value of Money
TMV- Multiple Cash Flows
T Sep 22
R Sep 24
5
5
Compounding Periods
Types of Loans – amortization
T Sep 29
R Oct 1
6
Bonds and their Valuation
Exam 2 (Chapters 4 – 5)
T Oct 6
R Oct 8
6
7
T Oct 13
R Oct 15
Assignments
Laptop assignment – In-Class
Assignment 1 Due
Assignment 2 Due
Bonds and their Valuation
Stocks and their Valuation
Fall Break
Fall Break
T Oct 20
R Oct 22
7
8
Stocks and their Valuation
Capital Budgeting Decisions
Laptop assignment – In-Class
T Oct 27
R Oct 29
8
Capital Budgeting Decisions
Exam 3 (Chapters 6 – 8)
Laptop assignment – In-Class
Assignment 3 Due
T Nov 3
R Nov 5
9
9
Estimating Cash Flows
Estimating Cash Flows
T Nov 10
R Nov 12
10
11
Capital Market History
Risk and Return
T Nov 17
R Nov 19
11
11
Risk and Return
Risk and Return
Laptop assignment – In-Class
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Date
T Nov 24
R Nov 26
T Dec 1
R Dec 3
Chapter Topic
Exam 4 (Chapters 9 -11)
Thanksgiving
12
12
Cost of Capital
Cost of Capital
16
No Class (Friday Class
Schedule)
Short Term Financial Planning
T Dec 8
R Dec 10
Thu, Dec 17
10:45 – 1:15
pm
Thu, Dec 17
1:30 – 4:00
pm
Assignment
Assignment 4 Due
Final Exam – Comprehensive
(10:00 section)
Assignment 5 Due
Final Exam – Comprehensive
(11:30 section)
Assignment 5 Due
Chapters 1 is introductory in nature and discusses the goal of financial management, forms of
business, the agency theory, and the role of ethics in the corporate world.
Chapters 2-3 describe the various financial statements (balance sheet, income statement and
statement of cash flows). It discusses the corporate tax system and shows how cash flows from
assets are equal to the cash flows received by creditors and stockholders. Chapter 3 is a discussion
of ratio analysis.
Chapters 4-5 discuss the time value of money – finding future and present values of single sums as
well as a series of cash flows. .
Chapters 6-7 describes bonds and stocks and methods to evaluate them. Their is also a discussion
on interest rates and the stock market.
Chapters 8-9 introduces the various methods used for capital budgeting and estimation of cash
flows.
Chapters 10-11 offer a historical look at capital markets and introduces the concepts of risk and
return, for a single asset as well as a portfolio. There is a discussion on systematic and unsystematic
risk and the CAPM.
Chapter 12 discusses the cost of debt and equity and the estimation of weighted average cost of
capital.
Chapter 16 introduces working capital management and short term financial planning.
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