WIDENER UNIVERSITY
SCHOOL OF BUSINESS ADMINISTRATION
FIN 600A
MANAGERIAL FINANCE
Fall 2003
Instructor:
Tel: (610) 499-4321
Dr. Iqbal Mansur
Fax: (610) 499-4614
Office: 226 QC
Email: iqbal.mansur@widener.edu
____________________________________________________________________________
COURSE DESCRIPTION:
The study of financial management is essential for anyone interested in the operation of a business
firm. The course is designed in a way which will provide students with an understanding of the
principles of financial management that are applicable to the current and ever-changing business
environment. This course will also serve as a foundation for advanced study in finance and
investments.
LEARNING OBJECTIVES:
A fundamental course in finance to provide the business students with an understanding off
financial management of business firms and to provide a theoretical and conceptual framework that
a financial manager can use to reach decisions in the day-to-day operation of the business. This
course is designed to:
1)
Explain how financial management fits into the overall operations of a firm.
2)
Explain the role of financial markets and the mechanisms of valuation as it applies to
financial management.
3)
Investigate how a firm should make its short-term and long-term financing in regards to its
goals and objectives.
4)
Determine a firm’s strengths and weaknesses by analyzing key financial ratios.
5)
Understanding the importance of time value of money and apply it to the concept of capital
budgeting including both replacement and expansion decisions.
6)
Understand techniques used to manage current assets.
7)
Understand the concept of the cost of capital and how it is used with the investment
opportunity schedule to make the firm’s financing and investment decisions.
8)
Give students the opportunity to practice effective communications techniques, both
written and oral.
9)
Give students the opportunity to use computer spreadsheets to solve financial problems.
2
10)
Expose students to current issues in finance through weekly discussion of current events as
reported in the Wall Street Journal.
TEXTBOOKS:
Brigham, E. and Ehrhardt, M., Financial Management: Theory and Practice, 10th ed., Harcourt, Inc,
2002.
Brigham, E., and Klein, L., Cases in Financial Management, The Dryden Press, Custom Printed,
1999.
In addition, students are urged to read the Wall Street Journal on a regular basis.
REQUIRED CALCULATOR:
A full financial calculator, i.e., one that does time value of money, NPV, IRR, etc., is
expected.
ASSIGNMENTS:
1.
Readings from the assigned textbooks and other references.
2.
Preparation of assigned problems and case assignments for class discussion and submission
of written reports.
COURSE EXPECTATIONS:
1)
I hope you will regard this class as your class. Its success depends upon your participation
and involvement. Your inquires and questions are important to all of us. Participation in
class discussion is expected, and carry 5% of course grade. To facilitate class interaction
and to ensure that you get credit for class participation, please display your name card in
class at all times.
2)
Please come prepared to discuss the assigned readings, answer the assigned problems, and
ask questions about the materials that you did not understand. I am not going to give
lectures about the assigned topics; instead I will be answering your questions about the
materials that you did not understand.
EXAMS:
Two examinations will be given, a mid-term and a final. Written reports and student participation
in case discussions will be a major factor in grade determination.
Written Case Reports
Mid-Term
Final
Class Participation
The plus/minus will be used.
D:\106762678.doc
45%
25%
25%
5%
3
MAKE-UP POLICY:
No make-up examinations will be given except under very extreme and extenuating circumstances.
In those cases where a make-up exam is permitted, it is expected that the exam be taken as soon
as possible; any unnecessary delay in taking a make-up exam may result in no exam being given.
ACADEMIC HONESTY:
Although certainly not anticipated at this level of study, the student should be aware that the first
cheating offense on examinations will result in application of the University’s Academic Honesty
procedure and may result in failure. Plagiarism on case reports will result in the application of
similar proceedings; Students can discuss case studies among themselves, however, they should
write their papers alone.
SKILLS:
Communication Skills:
Skills In:

Proficiency in writing
 Ability to understand and communicate accounting, economics and statistical
concepts
Skills Out:
 Ability to analyze accounting, economics and statistical information and
write cohesively
 Ability to speak the language of finance and business
Computer Skills:
Skills In:

Basic knowledge of spreadsheet packages
Skills Out:
 Application of spreadsheets for financial problem solving
Quantitative Skills:
Skills In:
 Prerequisite level background in economics and mathematics
Skills Out:
 Ability to apply the quantitative skills cohesively to solve problems in financial
management
Guidelines for Case Preparation and Presentation:

Prior to class, become thoroughly familiar with the case assigned for that session. Review
the questions presented at the end of the case. You will need to read the assigned
chapters in the textbook to prepare case solutions.
D:\106762678.doc
4

Each student will be assigned to a small group for case study. Following the group
discussion of the case assigned, a representative from each group will orally present the
group’s findings and conclusions to the class.

Specific guidelines for your individual written case presentations are presented below:
1)
Each case must contain a cover page and a one-page executive summary. The
executive summary should clearly detail your findings and conclusions and consist of
a definition of the problem analysis, and solution/recommendation.
2)
Answer the questions for each case. Identify each question and each sub-section
clearly. (You do not have to retype the questions.)
3)
Answers must be typed, double-spaced, on 8½” x 11” paper, with 1” margins all
around. All pages must be numbered. All tables should be numbered consecutively
in the text in Arabic numerals and presented on separate sheets.
4)
Paper should not exceed six (6) pages (not including tables).
5)
Show all calculations and provide explanations so that we can follow your logic.
6)
Cases must be completed and submitted on due dates, i.e. within one week of the
case discussion. No late cases will be accepted.
D:\106762678.doc
5
COURSE OUTLINE:
1.
Foundation of Financial Management
1.1
1.2
1.3
1.4
1.5
2.
2.2
2.3
3.
3.4
3.5
4.3
4.5
4.7
5.
Chs. 13, 14
Discounted Cash Flow Analysis
The Basics of Capital Budgeting
4.2.A
Capital Budgeting Methods: Payback, NPV, IRR, MIRR, PI
4.2.B
Independent vs. Mutual Exclusive Projects
4.2.C
Capital Rationing
Project Cash Flow Analysis
4.3.A
Formulating Projects in Terms of Incremental Cash Inflows
& Outflows
4.3.B
Evaluating Projects with Unequal Useful Lives
4.3.C
Capital Budgeting for Multinational Corporations
Capital
4.5.A
4.5.B
4.5.C
Case Analysis
Budgeting Under Uncertainty
Project Risk: Definition and Measurement
Techniques for Measuring Project Risk
Risk Analysis of Foreign Capital Projects
Risk and Return
5.1.A
Definition and Measuring Risk
5.1.B
Total Risk vs. Market Risk
D:\106762678.doc
Chs. 22, 23
Current Asset Investment and Financing Policies
Sources of Short-Term Financing
Management of Cash and Marketable Securities
3.3.A
Setting Target Cash Balance
3.3.B
Cash Management Techniques
3.3.C
Management of Marketable Securities
3.3.D
Cash Management in Multinational Corporations
Account Receivables Management
3.4.A
Setting Credit Policy
3.4.B
International Credit Management
Case Analysis
Capital Budgeting
4.1
4.2
Chs. 2, 3, 4
Financial Statement Analysis
2.1.A
Sources and Uses of Funds
2.1.B
Ratio Analysis
Financial Planning and Control
2.2.A
Methods of Forecasting Financial Plans
2.2.B
Factors Influencing External Financing Requirements
Case Analysis
Short-Term Financial Management
3.1
3.2
3.3
4.
Definition of Financial Management
The Goal of the Corporation
The Agency Relationship
Financial Markets and Institutions: Domestic and International
The Determinants of Market Interest Rates
Financial Analysis and Planning
2.1
Chs. 1, 5
Chs. 6, 7
6
5.1.C
5.1.D
5.1.E
6.
Valuation and the Cost of Capital
6.1
6.2
6.3
7.
7.2
7.3
7.4
8.4
8.5
9.
D:\106762678.doc
Chs. 19, 20, 21
Investment Banking Process
Common Stock
Long-Term Debt
8.3.A
Types of Long-term Debt
8.3.B
Term Debt Financing
8.3.C
The International Bond Financing
Lease Financing
8.4.A
Types of Leases
8.4.B
Evaluation by Lessor and Lessee
Case Analysis
Multinational Financial Management
9.1
9.2
9.3
Chs. 16, 17, 18
Capital Structure Theory
7.1.A
The Modigliani-Miller Models
7.1.B
The Miller Model
7.1.C
The Trade-Off Models
Capital Structure Policy
7.2.A
Business and Financial Risk: A Total Market Perspective
7.2.B
Business and Financial Risk: A Market Perspective
7.2.C
Operating and Financial Leverage
7.2.D
Factors that Affect Capital Structure Decision
7.2.E
International Differences in Capital Structures
Dividend Policy
7.3.A
Dividend Theories
6.3.B
Stock Repurchases
Case Analysis
Long-Term Financing Decisions
8.1
8.2
8.3
Chs. 9, 10, 11
Valuation Models
6.1.A Bond Valuation
6.1.B Preferred Stock Valuation
6.1.C Common Stock Valuation
6.1.D Stock Market Equilibrium
The Cost of Capital
6.2.A Capital Components and Costs
6.2.B Weighted Average Cost of Capital
6.2.C
Marginal Cost of Capital
6.2.D
Establishing the Optimal Capital Budget
Case Analysis
Capital Structure and Dividend Policy
7.1
8.
Measuring Portfolio Risk
Capital Asset Pricing Model
Risk and Return of International Investments
Differences vs. Domestic Financial Management
Multinational Capital Budgeting
Multinational Financing and Asset Management
Ch. 27
7
FIN 600A– Fall 2003
DATE
CHAPTERS
CASE/TEXT
PROBLEMS
9/3/03
1, 2
None
2.12
9/7
3, 4
#42 Swan-Davis, Inc.
3.14; 4.5
9/17
5,8
#42 Swan-Davis, Inc.
Written Report Due
8.13
9/24
13, 14
None
13.18; 14.9
10/1
22, 23
#70 Potato Best Products
22:10; 23:16
10/8
6, 7
#70 Potato Best Products
Written Report Due
10/15
MID-TERM EXAM
10/22
9, 10
None
10/29
11
#46 The Western Company
11.12
11/5
16,17
#46 The Western Company
Written Report Due
16.3; 17.5
11/12
18
None
11/19
12, 19
#20 Bessemer Steel Products, Inc.
12/3
27, Catch-up
#20 Bessemer Steel Products
Written Report Due
12/10
19.3
FINAL EXAM
Please note that the instructor reserves the right to change any items of the syllabus and course
guidelines presented above without the prior approval of the students enrolled in class.
D:\106762678.doc