SYLLABUS - FINANCIAL MANAGEMENT
FINK 507 - Sect 115
Summer, 2014
Mode of Instruction:
This class meets fully online during the eight week semester that begins June 3 and ends July 25.
This course uses the TAMUCT Blackboard Learning system described below and later in this Syllabus in
Section 7.0 titled: “Technology Requirements.” Students should check the Blackboard continuously
throughout the semester for Communication, Assessments, Solutions, Calculator Tutorials, and other
helpful information. See (https://tamuct.blackboard.com).You will use the Blackboard username and
password communicated to you separately to log on to this system. A&M-Central Texas has a license for
a readiness assessment for online learning. Students can gauge their readiness by taking an assessment at:
http://tamuct.smartermeasure.com. This link is included in Bb at the Online Resources portion of the
Course Menu.
Instructor: Dr. Mary H. Kelly
Office: 323F in Founder’s Hall
Assistant Professor of Finance
Phone: 254-501-5846
Office Hours:
On campus from 12 -3 pm on the following days: June 2-4; June 10; July 9, 15.
Online Virtual Office Hours M-F throughout the day from 9 am – 9pm
Do not hesitate to request an appointment in person or by phone for any day or time.
Request an appointment by emailing me or emailing our COBA Administrator.
Administrator for Course, Department, and College of Business Administration (COBA):
Ms. Jennifer Perez-Rivera at j.perez@ct.tamus.edu or 254-519-5437.
Appointments and other information can be obtained with her assistance via email or phone.
Communication between Instructor and Student and between Students:
The best way to reach me is by Bb email with FIN 507 in the subject line (called messages in
Bb) or at my university email (mhkelly@ct.tamus.edu). I generally respond within a day, or
sooner if I am online for virtual office hours or related matters.
A General Discussion Board on Blackboard will allow you to ask questions of others in the
class and receive their answers. Utilizing this discussion board is a key feature for class interface
and will allow you to share your specific experience and knowledge with others.
Online Communication Standards:
All communications and interactions are expected to be civil and appropriate for the learning
environment. If the instructor becomes aware of lapses, action may involve deduction of points or
other sanctions per university policies and procedures.
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Important Dates this Semester:
Monday, June 2, is the first day of classes for Summer Semester, 2014.
Tuesday, June 10, is the deadline to drop this 8-week course per Sect 9.0 below.
Wednesday, July 9, is the last day to drop this 8-week course with a Q or W.
Thursday, August 7, Graduation Application Deadline for Summer 2014 (Degree Only)
Saturday, August 9 at 10 am, is Commencement.
Friday, June 27, Graduation Application Deadline for Fall 2014 (Commencement Participation)
1.0 Course Description:
1.0 a Catalog Description
Course focuses on financial decision making in the modern corporation. Basic issues include capital
budgeting, capital structure, corporate sources of funding, dividend policy, financial risk
management, standard theories of risk and return, and valuation of assets.
Prerequisite: Graduate standing and FIN 500 (if required of student), or approval of the
MBA Admissions Committee.
1.0 b Expanded Description
The purpose of this course is to improve the financial decision making skills of students by
exposing them to a graduate treatment of advanced concepts and techniques used by financial
managers in the modern corporation.
A central theme of this course is value based management. The course begins with an elevated
review of the analysis of financial statements. Emphasis is given to the construction and
interpretation of the statement of cash flows and the possibly differing pictures of corporate
financial health as given by accrual versus cash flow methods. Financial ratio analysis follows.
Conventional liquidity, activity, debt, debt coverage, profitability, DuPont, and market based ratios
are computed and used in both time series and industry average analyses. The impact of offbalance sheet items on ratio interpretation is discussed. Some examples of financial planning and
techniques of financial forecasting follow. These methods require use of computerized
spreadsheet models in "what if" scenarios. The impact of interest rates and shifts in the yield
curve as they relate to the firm's financing mix (debt versus equity) is presented.
Fundamental concepts related to risk and return follow. Risk in a portfolio context is developed
along with the CAPM and the calculation of beta. Time value of money methods extend the basic
ideas of compounded growth rates and discounting. Bond and stock valuation methods are
developed. Bond ratings, their determination, and how they impact the firm's cost of capital are
discussed. Stock valuation utilizes the conventional dividend discount models as well as price
ratio analysis. The c
concept of "free cash flow" is studied and contrasted with the more traditional discounted dividend
models of valuation.
More current methods to access manager performance such as market value added and economic
value added are discussed and numerically demonstrated. The rationale and the use of the cost of
capital is derived using real world examples. Basic capital budgeting decision techniques are
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explained along with methods to adjust for cash flow risk. Cash flow estimation is necessary for
capital budgeting is demonstrated. Types of leverage are described and used to demonstrate how
business and financial risk differ, and how these risks impact expected return on equity in the
levered firm. The Modigliani/Miller theorems are explained and related to various observed
industry capital structures. The firm's dividend policy and share repurchase decision as they
impact shareholder wealth are described. Various theories of dividend policy such as the
Modigliani/Miller dividend irrelevance argument, the residual dividend theory, the tax and
clientele theories of dividends, and the signaling aspect of a firm's dividend policy are discussed.
The course concludes with a discussion of various working capital management policies.
Corporate ethics and related topics are discussed throughout the course. Global examples of
corporate financial decision making are included when appropriate. A semester term paper
covering a current topic in the firm's financial decision making is assigned. Spreadsheet
mechanics using Excel are emphasized throughout the course.
2.0 Course Objectives and Outcomes
2.1 Student Learning Outcomes (“SLOs”)
SLOs are measurable and the Course Calendar states which SLO listed below is addressed in
each Assessment. Upon completion of this course, a student should be able to demonstrate
the following that will be measured during the course:
A.
B.
C.
D.
E.
F.
G.
H.
Create spreadsheets with financial data used to facilitate decision making.
Draw conclusions about a firm's financial health.
Explain time value of money concepts for valuation purposes.
Describe a firm’s theoretical stock price using established stock valuation models.
Evaluate a firm's cost of capital used in financial decision making.
Compare investment decisions using established capital budgeting techniques.
Discuss the impact of public policy on financial decision-making.
Recognize examples of unethical corporate governance and behavior.
2.2 Student Goals or Competencies.
Upon completion of this course, students should understand the following, which will be
measured through SLOs described above in 2.1.
• The building blocks of value-based corporate decision making aimed at maximizing the firm's
stock price.
• The importance of understanding a firm's financial statements.
• The importance of financial forecasting in overall financial planning.
• The nature of a firm's financial environment as it pertains to interest rates.
• The basics of risk and return as they relate to stocks in isolation and in a portfolio.
• The importance of time value of money methods for valuation purposes.
• The importance of a firm's weighted average cost of capital.
• Risk analysis in capital budgeting decisions.
• How leverage and capital structure are related to risk and expected return.
• The basics of the firm's dividend policy decision.
• Various working capital management strategies.
• The financial aspects of bankruptcy and reorganization.
• The importance of ethical behavior and how ethics should impact decision making.
• The relationships between academic course material and real-world decision skills.
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3.0 Required Readings, Materials, and Textbooks:
Students tend to use different texts, due to the availability of texts from previous years or from
prerequisite courses, and the content can be very similar, but the order of the topics may differ between
texts and the Course Calendar attempts to address this by listing topics with sufficient detail to use other
texts.
(1) The text is “Fundamentals of Corporate Finance” by Ross, Westerfield & Jordan, 10th edition.
ISBN is 978-0078034633. This text has an excellent website: www.mhhe.com/rwj.
The text above is available for a Reduced Price that includes Premium Online Content at no
additional cost when purchased from the university’s Bookstore, and the text has been specially
prepared by the publisher (with fewer chapters than the hardcover listed above and the chapters may
be in a different order), but some students reported this version of the text had certain pages and
charts that were not clearly reproduced. The ISBN is 9780077717605 or 1121770134. This text has
the same website noted above: www.mhhe.com/rwj.
(2) The course site on Blackboard will have numerous postings of reading material for students - such as
power point slides, practice problems, lecture notes. Some content stems from the text.
(3) Computer Access to Excel.
This course will emphasize using Excel to perform financial calculations, yet a financial calculator
may be used, too. It is important for students to know that keystrokes differ between excel and
calculators, and among different models of calculators, which can lead to different answers and
erroneous financial decisions.
(4) A Financial Calculator may be used as an alternative to excel on exams. The most popular one used
by students is the shown below, the TI BAII+ that can be purchased for about $30. Instructions are
posted in Bb at the link called “Course Postings-Students Only.”
4.0 Course Requirements:
Attached to the end of this syllabus is the Course Calendar - a schedule of course topics and
assignments required for completion of this course. Depending on class dynamics, we may
move more quickly or slowly to enhance the learning environment. Changes may be made
at the discretion of the instructor.
5.0 Complete Course Calendar:
The complete course calendar is attached to this syllabus. Changes may be made at the discretion of
the instructor. The Course Calendar shows the learning outcomes targeted by each particular
assessment/exam or assignment. The format of this course requires you to work on your own a great
deal. To facilitate your learning, solutions to problems will be posted on Blackboard and can total
many pages; hence, be fiscally prudent with any printing.
6.0 Grading Criteria and Rubrics:
A maximum of 500 points will be awarded as described below. All grades will be posted in Bb.
Exam scores will post in Bb Gradebook immediately upon completion, but detailed scores will be
available only after the due dates. Other grades will generally be posted within a week after due date.
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400 Points from four Exams:
Each of the exams will be worth a maximum of 100 points, consisting of multiple choice
questions and/or short essays that cover both concepts and calculations. The format of each
exam is likely to be a window of several days to complete the exam online and may involve
only one attempt, more than one attempt that produces an average of all attempts, or another
format that may be a classroom setting; hence, it is important for students to check Bb and be
aware of announcements during class to ensure accurate information on assessments.
A missed assessment will count as a zero unless prior arrangements have been made with the
professor, who reserves the right to allow a missed assessment to be made up by applying its
weight to another assessment. Any written assignments will be graded for application of APA
style, as well as proper spelling, grammar, writing skills, and content.
5 Points from an online Quiz:
Complete timed quiz on corporate identities.
20 Points from four Excel Assignments:
Each of the four Excel Assignments will be worth a maximum of 5 points.
75 Points from a Current Event Research Assignment:
A topic will be assigned by the instructor and detailed requirements will be posted in Bb.
Discussion Boards
A specific Discussion Board will be available for student interactions on course topics and other
Discussion Boards will be set up for the Quiz and the Current Event Research Assignment.
Incomplete Policy:
A grade of “Incomplete” can be given only under extenuating circumstances, such as serious
illness or other necessary absences. An “Incomplete” must be completed in accordance with
university policy. If this does not happen, then the “Incomplete” will be changed to an “F.” If you
are not earning at least a “C” in the course, and have not completed most of the course, then an
“Incomplete” grade may not be appropriate.
Grading Scale will be as described below.
A = 90 -100% or 450 - 500 points
B = 80 - 89% or 400 - 449 points
C = 70 - 79% or 350 - 399 points
D = 60 - 69% or 300 - 349 points
F = below 60% or below 300 points
7.0 Technology Support and Requirements:
7.1 Technology Support
For technological or computer issues, students should contact Help Desk Central. 24 hours a
day, 7 days a week: Email: helpdesk@tamu.edu
Phone: (254) 519-5466
Web Chat: http://hdc.tamu.edu
When calling for support please let the support technician know you are a TAMUCT student.
For issues related to course content and requirements, contact the instructor.
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7.2 Technology Requirements
This course will use the new TAMU-CT Blackboard Learn learning management system for class
communications, content distribution, and assessments.
Logon to https://tamuct.blackboard.com to access the course.
Username: Your MyCT username (xx123 or everything before the "@" in your MyCT e-mail
address) Initial password: Your MyCT password
For this course, you will need reliable and frequent access to a computer and to the Internet. You
will also need a headset with a microphone or speakers and a microphone to be able to listen to
online resources and conduct other activities in the course. If you do not have frequent and
reliable access to a computer with Internet connection, please consider dropping this course or
contact me (your email and phone number) to discuss your situation.
Blackboard supports the most common operating systems:
PC: Windows 8, Windows 7, Windows Vista
Mac: Mac OS X Mavericks
NOTE: Computers using Windows XP, Windows 8 RT and OS X 10.6 or lower are NO
longer supported.
Check browser and computer compatibility by following the “Browser Check” link on the
TAMU-CTBlackboard logon page. (https://tamuct.blackboard.com) This is a CRITICAL step as
these settings are important for when you take an exam or submit an assignment.
Upon logging on to Blackboard Learn, you will see a link to Blackboard Student Orientation
under My Courses tab. Click on that link and study the materials in this orientation course. The
new Blackboard is a brand-new interface and you will have to come up to speed with it really
quickly. This orientation course will help you get there. There is also a link to Blackboard Help
from inside the course on the left-hand menubar. The first week of the course includes activities
and assignments that will help you get up to speed with navigation, sending and receiving
messages and discussion posts, and submitting an assignment. Your ability to function within the
Blackboard system will facilitate your success in this course.
Technology issues are not an excuse for missing a course requirement – make sure your
computer is configured correctly and address issues well in advance of deadlines.
8.0 Drop and Withdrawal Policy:
If you discover that you need to drop this class, you must go to the Records Office and ask for the
necessary paperwork. Professors cannot drop students; this is always the responsibility of the
student. The record’s office will give a deadline for which the form must be returned, completed,
and signed. Once you return the signed form to the records office and wait 24 hours, you must go
into Duck Trax and confirm that you are no longer enrolled. If you are still enrolled, FOLLOW-UP
with the records office immediately. You are to attend class until the procedure is complete to avoid
penalty for absence. Should you miss the deadline or fail to follow the procedure, you will receive an
F in the course.
9.0 Academic Integrity
Texas A&M University - Central Texas expects all students to maintain high standards of personal
and scholarly conduct. Students found responsible of academic dishonesty are subject to disciplinary
action. Academic dishonesty includes, but is not limited to, cheating on an examination or other
academic work, plagiarism, collusion, and the abuse of resource materials. The faculty member is
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responsible for initiating action for each case of academic dishonesty and report the incident to the
Associate Director of Student Conduct. More information can be found
at http://www.tamuct.edu/departments/studentconduct/facultyresources.php.
10.0 Disability Support Services
If you have or believe you have a disability and wish to self-identify, you can do so by providing
documentation to the Disability Support Coordinator. Students are encouraged to seek information
about accommodations to help assure success in their courses. Please call (254) 501-5831 or visit
Founder's Hall 114, Suite 114. Additional information can be found at
http://www.tamuct.edu/departments/disabilitysupport/index.php
11.0 Tutoring
Tutoring is available to all TAMUCT students, both on-campus and online. Subjects tutored include
Accounting, Finance, Statistics, Mathematics, and Writing. Tutors are available at the Tutoring
Center in Warrior Hall, Room 111. Visit www.ct.tamus.edu/AcademicSupport and click "Tutoring
Support" for tutor schedules and contact info. If you have questions, need to schedule a tutoring
session, or if you're interested in becoming a tutor, contact Academic Support Programs at 254-5015830 or by emailing tutoring@ct.tamus.edu.
Chat live with a tutor 24/7 for almost any subject on your computer! Tutor.com is an online tutoring
platform that enables TAMUCT students to log-in and receive FREE online tutoring and writing
support. This tool provides tutoring in Mathematics, Writing, Career Writing, Chemistry, Physics,
Biology, Spanish, Calculus, and Statistics. To access Tutor.com, log into your Blackboard account
and click "Online Tutoring."
12.0 Library Services:
Library distance education services aims to make available quality assistance to A&M-Central Texas
students seeking information sources remotely by providing digital reference, online information
literacy tutorials, and digital research materials. Much of the TAMUCT collection is available
instantly from home. This includes over half of the library's book collection, as well as approximately
25,000 electronic journals and 200 online databases. Library Distance Education Services are outlined
and accessed at: http://www.tamuct.edu/departments/library/deservices.php
Information literacy focuses on research skills which prepare individuals to live and work in an
information-centered society. Librarians will work with students in the development of critical
reasoning, ethical use of information, and the appropriate use of secondary research techniques. Help
may include, but is not limited to: the exploration of information resources such as library collections,
the identification of appropriate materials, and the execution of effective search strategies. Library
Resources are outlined and accessed at: http://www.tamuct.edu/departments/library/index.php
13. Additional Information:
An important component of a learner-centered syllabus is a section directed to you, a student-scholar
that explains the instructor’s teaching philosophy for this course. Here it is:
My expectations are for you to develop reasonable proficiency with financial theories and
applications to the decision-making process. Current events in finance will be discussed.
I hold a special interest in your professional development that stems, in part, from a career in
corporate banking prior to specializing in higher education. Specifically, I obtained progressively
responsible industry experience during a rapidly changing time in the financial services industry that
began with a formal Finance Training Program and advancement to Regional Finance Manager and
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Vice President of Corporate Banking. I managed professionals in credit, collections and business
development, while maintaining relationships with large companies across the U.S. for structured
financings, swaps, fx, trust services, cash management, private banking, and other commercial
services.
Please don’t hesitate to discuss the course or professional development with me, as I never tire of
teaching finance and discussing related matters with students!
Remember: the best way to reach me is Bb email with FIN 507 in the subject line.
14.0 Course Calendar is below.
MODULE 1
Weeks 1, 2, 3 (June 3 – June 22):
This module addresses the Student Learning Objectives (SLOs) stated below that are also stated
in Section 2.1 of this syllabus.
A. Create spreadsheets with financial data used to facilitate decision making.
B. Draw conclusions about a firm's financial health.
G. Discuss the impact of public policy on financial decision making.
H. Recognize examples of unethical corporate governance and behavior.
Ch 1 Overview of Financial Management and the Financial Environment
Ch 2 Financial Statements, Calculation of “Free Cash Flow” and Taxes
See Bb posting on OPTIONAL LINKS. Students report positively on the video “Careers in Finance”
See Bb posting on Financial Stmt Review (2minutes by Dr. Kelly)
See Bb posting for Calculator Tutorial (will need to do arithmetic now, but will do more complex
calculations after exams 1 and 1b)
See Bb posting for Sample Excel Assignment (Suggestion: do with a split screen showing problem and
solution.)
See Bb Postings for Power Point Slides, Lecture Notes, Practice Problems, and Preview of Exam
Concepts and Procedures used to prepare Financial Stmts
Public Policy Impact on Corporate Finance Decisions
(Examples: EBITDA, Dividends Paid, etc.)
Free Cash Flow Calculations vs. Net Income Calculations
EBITDA & other real-world calculations of Free Cash Flow (FCF)
FCF in text vs. other texts vs. FCF at www.yahoo.finance
Why FCF is calculated vs. Cash Flow Statement vs. GAAP stmts.
See Bb posting on OPTIONAL LINKS for video on Law & Order-CI: Tuxedo Hill episode
(Previous students recommend this episode. The financial shenanigans and crimes highlight the
importance of understanding the language of finance, in addition to calculations, especially the term Free
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Cash Flow and its most elementary formula called EBITDA. The episode can be purchased at
amazon.com for about $3 and runs approximately 45 minutes w/o commercials.
ASSESSMENT 1 / EXAM 1 on chaps 1 and 2 due by end of day on date posted in Bb
Assessment 1 addresses Student Learning Objectives (SLOs) described in Section 2.1 A, B, G and H.
Ch 3 Ratio Analysis with Financial Statements
See Text, chapter 3
5 Categories of Ratios and the most common ratios (about 15)
6th Category added in lecture –Productivity Ratios
(example: Sales/Total Employees; Sales/Full-time Positions)
th
7 Category added as description for Common Size Financial Stmts
(see text and know for exams; know Balance Sheet Identity)
Review DuPont Equation for ROE
(history and usefulness for seeing 3 categories at once thru algebra)
Understand Ratio Benchmarks and Window Dressing
See Bb posting for Power Point Slides, Lecture Notes, Practice Problems, and Preview of Exam
See Bb posting for Video on Ratios beyond text (6 minutes)
ASSESSMENT 2 / EXAM 2 due by end of day on date posted in Bb.
Assessment 2 addresses Student Learning Objectives (SLOs) described in Section 2.1 A, B, G and H.
MODULE 2
Weeks 4, 5 (June 23 – July 6):
This module addresses the Student Learning Objectives (SLOs) stated below that are also stated in
Section 2.1 of this syllabus.
A. Create spreadsheets with financial data used to facilitate decision making.
C. Explain time value of money concepts for valuation purposes.
Ch 5 Introduction to Time Value of Money Concepts and Calculations (“TVM”)
Ch 6 Discounted Cash Flow (DCF) Valuation Technique
See Bb posting on “Excel Tutorial”
See Bb posting on “Calculator Tutorial”
See Bb posting called “TVM handout.”
See Text and Bb Posting on Time Value of Money (TVM) Concepts, Calculations, Applications, and
Practice Problems, etc.
The following TVM topics are the bulk of this course and we may cover them more quickly or slowly
based on class dynamics.
(1) Lumps Sums
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(2)
(3)
(4)
(5)
(6)
(7)
Annuities
Multiple or Uneven Cash Flows
Bonds
Stocks (risk measures of beta vs. sigma; risk measures for one stock vs. portfolio;
calculating Expected Return vs Historical Return vs Required Return per risk level, etc.;
Risk and return per the Efficient Markets Hypothesis (EMH); Modern Portfolio Theory
and Diversification; Stock Valuation with the Dividend Discount Model (DDM) vs the
Capital Asset Pricing Model (CAPM);
Capital Structure Decisions
Calculations for WACC and the effects of capital structure on firm value
Capital Budgeting Decisions
Analyzing the techniques of NPV, IRR and Payback Period
See Bb posting on OPTIONAL LINKS for video on Time Value of Money Part I – Lottery: an example
of a Present Value-Lump Sum Payment.
See Bb posting for TVM Practice Problems-Lump Sums, Annuities, and Uneven Cash Flows
See Bb posting for Excel Assignment 1 (due by date of Exam 3) on Lump Sums, Annuities, and Uneven
Cash Flow that includes Lecture Notes. (Suggestion: do with a split screen to view both problem and
solution.)
Ch 7 TVM for Bond Valuation
See Bb posting on OPTIONAL LINKS as students report positively on the video “Definition of the Bond
Market and how it differs from the Stock Market”
See Text and Bb Postings on:
Bond Concepts and Calculations.
Credit Ratings – know what Investment Grade Rating means vs. High Yield Rating (euphemism
for Junk Rating);
Know what Sinking Fund means;
Know meaning of Callable Bonds and YTC vs. YTM calculations
Review Priority of Claims in Bankruptcy for Bonds – secured vs. unsecured;
Know what Bond Indenture means, etc.
See Bb posting for TVM Practice Problems-Bonds
See Bb posting for Excel Assignment 2 (due by date of Exam 3) on Bonds that includes Lecture Notes
(Suggestion: do with a split screen to view template and solution.)
See Bb posting for Preview of Exam 3
ASSESSMENT 3 / EXAM 3 due by end of day on date posted in Bb.
Assessment 2 addresses the Student Learning Objectives (SLOs) described in Section 2.1 A and C.
MODULE 3
Weeks 6, 7 (July 7 – July 20):
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This module addresses the Student Learning Objectives (SLOs) stated below that are also stated in
Section 2.1 of this syllabus.
A. Create spreadsheets with financial data used to facilitate decision making.
D. Describe a firm’s theoretical stock price using established stock valuation models.
We may cover topics in this module more quickly or slowly, based on class dynamics.
Ch 8, 12, 13, parts of 17 related to stock dividends
See Text and See Bb Postings on:
Dividends and Other Distributions to Owners (ch 17)
Cash vs. Stock Dividends and Stock Buybacks (ch 17)
The Signaling Theory (ch 17)
Stock risk measured by σ vs. β (ch 12 and 13)
Stock return measured by DDM (ch 8)
Stock return measured by CAPM (ch 13)
Stock return measured by CAPM vs. DDM vs. Avg of both (ch 13)
Portfolio Management -weighting, diversification, risk profile (ch 13)
Empirical evidence of stock valuation models (ch 13)
EMH and its three forms (ch 12)
See Bb Posting for Lecture Notes and Practice Problems on Stock Valuation
See Bb Posting for Excel Assignment 3 (due by date of Exam 4) on Stocks using DDM
See Bb Posting for Excel Assignment 4(due by date of Exam 4) on Stocks using CAPM
See Bb Posting for Preview of Exam 4
ASSESSMENT 4 / Exam 4 due by end of day on date posted in Bb.
Assessment 3 addresses the Student Learning Objectives (SLOs) described in Section 2.1 A and D.
MODULE 4
Week 8 (July 20 – July 25):
This module addresses the Student Learning Objectives (SLOs) stated below that are also stated in
Section 2.1of this syllabus.
A. Create spreadsheets with financial data used to facilitate decision making.
B. Draw conclusions about a firm's financial health.
E. Evaluate a firm's cost of capital used in financial decision making.
F. Compare investment decisions using established capital budgeting techniques.
G. Discuss the impact of public policy on financial decision making.
Ch 14, 16 only key sections related to WACC for TVM Applications for Capital Structure Analysis
(WACC is the Weighted Average Cost of Capital)
See Bb Posted Materials (as time permits) on:
Calculating WACC (ch 14)
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Discuss empirical evidence suggesting the use of debt tends to increase the value of a firm –
leading to the quest for an optimal capital structure that maximizes a firm’s value for the
benefit of its owners/shareholders (recall, ch 1)
Ch 9, 10
only key sections related to TVM Concepts and Calculations for Capital Budgeting Analysis
See Bb Postings on Lecture Notes and Practice Problems (as time permits) on:
Capital Budgeting Decisions by NPV, IRR, Payback, and Other Methods
NPV and IRR Rules for Acceptance of Project(s)
Payback Rules - do not consider TVM at all
Capital Rationing
Reasons for NPV preference in capital budgeting decisions
See Bb Posting for Readings and Research Requirements on a Current Topic in Corporate Finance
Research and Writing Assignment due by end of day on date posted in Bb.
This writing Assessment / Assignment addresses the Student Learning Objectives (SLOs) described in
Section 2.1 A, B, E, F and G.
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