Finance 3403
Business Finance
Spring 2015
Live lecture - BA1, Room 107: M and W 10:30 to 11:45 a.m.
Seating capacity in the live sections is 285 so you are more than welcome to attend the
live sessions.
All lectures are available via lecture capture. Lecture captures are available via
Webcourses. Please do not wait until the last minute to watch the videos as there are
sometimes technical issues with Webcourses and or/the internet. All materials and
assessments for the course are available through Webcourses at https://my.ucf.edu. You
may also access the system at the following link: http://webcourses2c.instructure.com/.
Please call (407) 823-5117 for assistance with any technical issues related to the lecture
captures/Tegrity.
Dr. Ann Marie Whyte
Office: BA1 423 Phone: (407) 823-3945 Fax: (407) 823-6676
Email: Please use Webcourses for all e-mails
Please note that e-mail is the best method for contacting me
Office hours:
Mondays and Wednesdays
9:00 a.m. to 10:25 a.m.
Other times by appointment
Finance 3403 Teaching Assistants
Finance Help Desk – BA1 456
Office hours: To be announced
Phone: (407) 823-5720
Email: please use Webcourses to email the TAs
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Finance Help Desk
Finance 3403 teaching assistants will maintain office
hours at the Finance Help Desk in order to assist with
your questions. The Help Desk is located in BA1
456. Please take advantage of the help desk to clear
up any questions you may have and prevent you from
falling behind in the course. Students who frequently
visit the Help Desk for assistance tend to do well in
this course. I recognize that many of you are unable
to make it to main campus. If this is the case, you
may call the help desk for assistance. However, keep
in mind that the TAs will also be assisting other
students and it may be necessary for them to call you
back. There is no voice mail capability at the help
desk.
Catalog Description
Fin 3403 - Business Finance: Pre-requisites ACG 2021 and ECO 2023. With the
balance sheet as a reference point, this course provides an introduction and
overview of the acquisition, financing, and management of business assets.
Required Textbooks:
Foundations of Finance, by Keown, Martin, and Petty, Pearson Custom Publishing.
10-digit ISBN: 0-558-93567-2
13-digit ISBN: 978-0-558-93567-2
With this option, you would need to purchase the access card for MyFinance lab if you
want to practice end of chapter problems online.
or
MyFinanceLab with Pearson eText -- Access Card -- for Foundations of Finance, 8/E
Author: Keown, ISBN: 9780133019926, Prentice Hall 2014.
and
Business Finance Note Taking Guide by Dr. Anthony Byrd, Pearson Custom
Publishing, 15th edition. Although the lecture notes are in Webcourses, I strongly
recommend that you purchase the Note Taking Guide. The notes are available under the
“Modules” link in Webcourses.
Recommended Reading
The Wall Street Journal is available a very low subscription rate to students:
$15.00 for 15 weeks. Go to www.wsj.com/spring15 to subscribe.
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New UCF Financial Aid Policy
As of Fall 2014, all faculty members at UCF are required to document students' academic
activity at the beginning of each course. In order to document that you began this course, you
will need to complete an academic activity during the first ten days of the semester. Failure to
do so will result in a delay in the disbursement of your financial aid. For this reason, I have
set the due date for the “Attendance Quiz” for January 16. This quiz does NOT count
towards your grade in the course.
Learning Outcomes
Upon successful completion of this course, students should be able to:
1.
2.
3.
4.
5.
6.
7.
Interpret and analyze financial statements. (comprehension)
Solve time value of money problems. (application)
Use bond and stock valuation techniques. (application)
Analyze risk and return tradeoffs. (analysis)
Perform basic capital budgeting analyses. (analysis)
Interpret basic capital structure theories. (comprehension)
Contrast dividend policy theories. (evaluation)
Financial Calculators
You need a financial calculator for this course. The recommended business
calculator is the Hewlett Packard 10BII. You should be able to find this
calculator for about $35 at bookstores and local office supply stores. This
calculator will suffice for this course (and other courses in the business
curriculum) since it allows you to input cash flows and calculate internal rates of
return and net present values. There are other calculators that have these
capabilities, although we may not be familiar with them. Based on my experience
over the past several semesters, I strongly recommend the Hewlett Packard
10BII plus. Students who do not have a financial calculator with the capabilities
similar to the 10BII plus will be at a considerable disadvantage. If you choose to
use a different calculator, it will be more difficult to follow the lectures and the
TAs and I will not be able to assist you with a different calculator. You must
bring your calculator to each exam. Although a regular calculator will suffice for
the first exam, I strongly encourage you to purchase the financial calculator as
soon as possible. Please bring your calculator to each exam.
Note: Palm computers, smart phones, graphing calculators, and large-screen
programmable calculators will not be allowed in this course.
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Buying the financial calculator is only the first step. You also need to learn
how to use it. This can take from 5 – 15 hours, including reading the manual
and working through problems. This is crucial for Exam #2, 3, and 4. If you
do not have the manual, you can download it from the web. The website is
listed on the back of most calculators. I will also provide an online PowerPoint
tutorial for the HP10BII plus that you can review at your leisure.
Course Description and Format
Whether seeking a career in finance, real estate, economics, marketing,
accounting, or any other business area, a well-educated business graduate will be
expected to have a broad understanding of finance. Finance 3403 is a four (4)
credit hour business core course required for all business majors. Finance 3403
covers all of the major areas of corporate finance and provides rigorous training in
the analytical tools and concepts that students will find helpful both in business
and in their personal lives. Considerable effort will be spent on mastering "time
value" or the mathematics of finance. These skills will be needed throughout the
course and will have numerous applications in your personal financial planning.
This course will consist of lectures on M and W that will be available via lecture
capture. You are welcome to attend the live lectures. If you do not attend the
live session, you are expected to watch the lecture capture. The teaching assistants
are there to assist you with questions – they will NOT “re-teach” the lecture.
Ultimately, your success will depend largely on the amount of preparation done
before and after class. Due to the rigorous nature of this course, a great deal of
preparation will be required. Most students will need to spend at least 20 to 24
hours per week outside of class during the summer semester. Please do not
procrastinate!
Grading
Grades will be determined by traditional quizzes, exams, and online module
quizzes. The weights are as follows:
Exam #1
Exam #2
Exam #3
Comprehensive Final Exam
Traditional Quizzes (4)
Module Quizzes (10)
TOTAL
20%
20%
20%
20%
10%
10%
100%
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Policy on Exams and Quizzes
Any student who misses an exam or quiz will receive a grade of zero for that
exam or quiz unless the student can provide documented evidence of extenuating
circumstances which precluded that student from taking the exam when
scheduled. Make-ups for exams will only be offered for authorized university
events and religious holidays1 (UCF Policy Number 4-401). If a student misses
an exam for any other event beyond his or her control (and provides the necessary
documentation), the points from the missed exam will be allocated to the final
exam.
There are no makeups for quizzes. If you miss a quiz, you will receive a grade of
zero for that quiz unless you can provide documented evidence of extenuating
circumstances which precluded you from taking the quiz when scheduled. Since
the quizzes are open for several days, the extenuating circumstance must be such
that you are unable to complete the quiz during any of the time period allowed for
the assignment. Inability to take a quiz on the last available day is not accepted so
please plan accordingly. In other words, please do not wait until the last day to
attempt a quiz. I have allowed multiple days for each quiz because I know that
there are sometimes issues with the internet and/or Webcourses. If you do miss a
quiz because of circumstances beyond your control, you will need to complete the
Grade Excuse Form (under learning modules) and attach documentation. Please
return the completed form to the help desk within 1 week of the missed quiz. If
approved, you will receive credit for the missed quiz.
Exams. Each exam (including the comprehensive final exam) will consist of 20
questions or problems. You will have 90 minutes to complete each exam. The
dates for all exams are detailed in the course outline below. Exact start and end
times will be announced prior to each exam. I will also provide a monthly
calendar outlining the dates for all the exams and quizzes. The exams must be
completed in the college’s testing center located in BA2 104 on the UCF main
campus or the testing lab on your respective regional campus. I will provide a
formula sheet for each exam that will be embedded in the first question on the
exam. A sample formula sheet is provided in the back of the Note Taking Guide.
Four (4) practice exams (and the answer key) are also provided at the back of the
Note Taking Guide. They are also available under the “Modules” link.
Please note that you must take the exam on the campus for which you registered.
I do NOT have any control over this decision – this is the policy of the College of
Business Administration. Thus, you cannot show up at a particular campus and
ask permission to take the exam – it will not be granted. Please check your
registration carefully to make sure you are registered for the campus where you
want to take the exam.
YOU MUST HAVE A VALID UCF STUDENT ID IN ORDER TO ENTER
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THE TESTING LAB. You are only permitted to bring your financial calculator
and pen/pencil into the lab. Other items are not permitted (this includes cell
phones and drinks). Please go to the testing lab’s website for details:
Orlando testing lab: www.bus.ucf.edu/testinglab.
Regional campus testing labs: www.bus.ucf.edu/testinglab -- on the bottom of
this page there is a link for “Regional Campus Information.”
IMPORTANT TESTING LAB INFORMATION FOR REGIONAL
CAMPUS STUDENTS ---- The hours of operation and policies/procedures for
regional testing labs differ from the Orlando campus. You must contact your
regional campus testing lab to determine their operating hours and find out if
they require advance registration for exams. It is possible, for example, that the
exam is open on a Friday on the Orlando campus, but a particular regional
campus’ lab may be closed on a Friday. Some campuses require advance
registration while others do not. It is your responsibility to find out all relevant
details. I will not extend the testing period because a regional campus lab has
limited hours or is closed on a particular day. If the hours at a particular
regional campus do not meet your needs, please consider registering for Orlando
or another campus that meets your scheduling requirements.
Special accommodations for test taking are only available through the Office of
Student Disabilities. Please contact them immediately if you require special
accommodations.
FIN 3403 exams use the “open testing” format. You can take the exam at any
time during the times indicated for an exam. Please note that the end times are
fixed. For example, suppose an exam must be completed by 8:00 p.m. on
Saturday. If you start the exam at 7:30 p.m., you will only have 30 minutes to
complete the exam. Please plan accordingly.
Open testing challenges students to adhere to academic honesty at a new level.
Because of this, I ask you to commit to the following statement:
“Because of open testing, once I take the test, I cannot discuss the
contents of this test with anyone while the test is still available to
other students. This includes discussing specific questions as well
as general information about the test. I agree to not speak to
anyone about anything on the test, in any form of communication,
until after the testing period is completed.
Academic dishonesty will not be tolerated and all available remedies will be
pursued if there are violations.
Quizzes: The course will also include four (4) traditional quizzes and ten module
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(10) quizzes. Traditional quizzes are similar in format to an exam i.e. they will
typically include 20 multiple choice problems and/or concepts. The module
quizzes will typically illustrate a real-world application of the material covered in
class and typically include about 10 questions. The quizzes and modules can be
completed from any internet-enabled computer capable of using the UCF
Webcourses system. I will notify you when quizzes will open and close.
Email Policy
The fastest way to receive a response from me is via e-mail in Webcourses. I
generally try to respond to emails within 24 hours. PLEASE read the syllabus
carefully and watch the videos before e-mailing me a question. Please do NOT
email entire finance problems to me or the TAs. If you need help in solving a
problem, please stop by or call the help desk. In addition, please do NOT copy all
students on your e-mails. Please use the discussion board if you have a question
or comment for all students. Thanks in advance for your cooperation.
Calculating your Grade
I will post an Excel spreadsheet later in the semester that will enable you to
determine where you stand in the course. Final grade cut-offs will be adjusted at
the end of the course, if necessary. I do not assign “minus” grades.
Grading Scale:
A
B
C
D
=
=
=
=
(90 to 100)
(80 to 86.99)
(70 to 76.99)
(60 to 66.99)
B+ =
C+ =
D+ =
F =
(87 to 89.99)
(77 to 79.99)
(67 to 69.99)
(0 to 59.99)
A passing grade in this course depends on your major, college, and catalog year.
In other words, a passing grade for you may be different from a fellow classmate.
Please consult your academic advisor to correctly determine what constitutes a
passing grade for you.
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Schedule
Date
Topics
01/12
Introduction
01/14
Corporate Taxes
01/19
Martin Luther King Holiday
01/21
01/26
01/28
to
01/31
02/02
02/04
02/09
02/11
02/16
02/18
02/23
02/25
02/26
to
03/02
03/04
03/09 to 03/13
03/16
03/18
03/23
03/25
03/30
04/01
04/06
04/07
to
04/10
04/13
04/15
04/20
04/22
04/27
04/30 to
05/01
Financial Markets and Interest Rates
Financial Statements and Performance
Exam #1
Note: No Lecture on 01/28
The Time Value of Money
Time Value of Money
The Time Value of Money
The Time Value of Money
Risk and Return
Risk and Return
Bonds
Bonds
Exam #2 - No Lecture on 03/02
Stocks
Spring Break
Stocks
Cost of Capital
Cost of Capital
Capital Budgeting
Capital Budgeting
Capital Budgeting
Capital Budgeting
Exam #3 – No Lecture on 04/08
Leverage
Leverage
Capital Structure
Capital Structure
Dividends
Final Exam – NOTE THAT THIS IS
ONLY A 2-DAY TESTING BLOCK
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The syllabus for the course ends here. Below I have provided some additional
information about the finance major, the real estate major and the Personal Finance
course for your information. This is not required for the course – this is just additional
information in case you are still trying to decide on a major.
The Finance Major
Finance is the largest major in the UCF College of Business Administration. Read on
to see why.
Our finance major provides students with a thorough understanding of financial markets,
investments, and corporate finance. You will learn how to analyze investments such as
stocks, bonds, mutual funds, real estate, and derivative securities such as options and
futures. The major also covers corporate finance topics such as financial statement
analysis, capital investments, dividend policy, and international finance.
Finance graduates find excellent opportunities many areas, including the following:
Commercial banking: Commercial banks provide banking services to individuals, small
businesses and large organizations. Jobs in banking can be exciting and offer excellent
opportunities to learn about business and interact with people. You will find a
tremendous range of opportunities in commercial banking, including corporate banking,
leasing, international finance and trade credit.
Corporate finance: A corporate finance career might involve raising capital to operate
and grow a business, making acquisitions, planning for the firm’s financial future and
managing the cash on hand. Financial managers work to create value by designing
financial policies, executing the firm’s financing program, managing cash, and
interacting with the financial community and investors.
Financial Planning: Financial planners help individuals plan their financial futures.
This work requires excellent interpersonal skills and can be personally and financially
rewarding if you like to help people. A good financial planner understands financial
markets, investments, taxes, insurance, and estate planning issues.
Insurance: Insurance is a trillion dollar business that employs more than 2.5 million
people in the United States alone. As the population ages and wealth grows, the demand
for insurance professionals will increase dramatically. Jobs in insurance involve helping
individuals and business manage risk to protect themselves from catastrophic losses and
to anticipate potential risk problems. Work in this area is not only personally rewarding,
but can be financially rewarding as well.
Investment banking: Investment banks help companies and governments issue
securities. They also provide financial advice to investors and help them purchase
securities, manage financial assets, trade securities and provide financial advice. You
might work for a large firm such as Merrill Lynch or Goldman Sachs, or for a regional or
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smaller “boutique” firm. Most firms include investment banking services (working with
issuers of securities) and sales and trading services.
Money management: Money managers hold stocks and bonds for institutional clients.
Some money managers use the latest sophisticated quantitative techniques while others
do very well using simple intuition. Many money managers buy and hold fixed income
securities including mortgage-backed securities, corporate bonds, municipal bonds,
agency securities and asset-backed securities. Others focus on equities, including small
stocks, large caps and emerging market stocks.
The Real Estate Major
Real estate is the newest major in the UCF College of Business Administration. Is it a
good fit for you?
The real estate major provides comprehensive coverage of personal finance, real estate
fundamentals and real estate law. Students completing these courses are qualified to sit
for the state real estate sales license. Students can also learn about real estate
investments, finance and real estate development. Other elective courses include real
estate appraisal, environmental issues, professional selling, and internships. Qualified
students may sit for the state appraisal and mortgage brokerage licenses.
There are more than five million people in the United States employed in identifiable real
estate fields such as title insurance, construction, mortgage banking, property
management, real estate appraisal, and brokerage and leasing, and real estate
development. In addition, many were engaged in corporate real estate and in real estate
lending in commercial banks, savings and loans, and insurance companies where their
jobs are not included in the real estate sector.
Over a third of the world's wealth is tied up in real estate. Real estate is collateral for
mortgages and a large amount of financial assets. Real estate professionals are tied to the
development of our society in a very direct way and participate in decisions that will
shape the way we live for centuries. Work in real estate is personally rewarding, everchanging and challenging.
You can major or minor in real estate through the Dr. P. Phillips School of Real Estate at
UCF.
Personal Finance and Investments (FIN 2100)
If you like money and financial markets, you’ll love FIN 2100. This course is one of
the best investments you can make in your future!
The Case for Personal Finance Education
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Most individuals will earn over $1 million in their lifetime, college graduates will
average over $2 million and professionals will average over $3 million. Throughout their
lives, UCF graduates must generate enough cash flow to cover their daily expenses, buy
and finance a house, insure against risks, pay taxes, make investments, and plan for
retirement. Yet most college graduates do not have the training necessary to properly
conduct their personal financial affairs. They often accumulate too much debt (usually
beginning in college), spend more than they earn, and often make unwise financial
decisions.
According to former Federal Reserve chairman Alan Greenspan, financial education is
critical, and can help households accumulate assets and increase wealth. Greenspan
states that “Financial education can equip consumers with the fundamental knowledge
required to choose among the myriad of products and providers in the financial services
industry. It can also help to inculcate individuals with the financial knowledge necessary
to create household budgets, initiate savings plans, and make strategic investment
decisions. Such financial planning can help families meet near-term obligations and
maximize their longer-term well-being and is especially valuable for populations that
have traditionally been under-served by our financial system.”
FIN 2100 Topics: EVERY college graduate will need to understand the following
topics:
1. Financial Planning
2. Consumer Purchasing
3. Career Planning
4. Housing
5. Budgeting, Records and Financial Statements
6. Insurance
7. Tax Planning
8. Investments
9. Real Estate
10. Financial Services and Consumer Credit
11. Retirement Planning and College Savings
12. Estate Planning
Following are actual comments from students who recently completed FIN 2100:
 “This was the best and most relevant information I’ve learned in any college
course.”
 “I learned useful, practical information that I can apply throughout my lifetime.”
 “This was an extremely useful everyday life course. I got a lot out of it and
enjoyed the class.”
 “Best class I’ve taken at UCF that will have the most potential for a positive
impact on my life.”
 “I can use the information presented in class for my own personal benefit
immediately.”
 “Top notch! Make this a core class for everyone. It could save their financial
lives.”
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