Syllabus
FINK 400: Advanced Financial Management
Spring Semester 2014
Mode of Instruction:
This class meets online during the eight week semester that begins January 13 and ends March 7.
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 new Blackboard site
continuously throughout the semester for Communication, Assessments, Solutions, Calculator Tutorials,
and other helpful information. See (http://tamuct.blackboard.com).You will use the Blackboard username
and password communicated to you separately to log on to this system. As of Spring 2012, Texas A&MCentral Texas uses its own Blackboard system and the usernames and passwords that you used to log on
to Tarleton State University’s Blackboard are no longer valid.
Instructor: Dr. Mary H. Kelly
Assistant Professor of Finance
Office: 323F in Founder’s Hall
Phone: 254-501-5846
Office Hours:
Tuesday & Thursday: 2:45 – 5:45 pm, On-campus
Monday, Wednesday, Friday: Online/Virtual Office Hours throughout the day from 9 am – 9pm.
Do not hesitate to request an appointment in person or by phone for any day or time.
Communication between Instructor and Student:
The best way to reach me is 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 two,
or sooner if I am online for virtual office hours or related matters.
There is a General Discussion Board on Blackboard that will allow you to ask questions of
others in the class and receive their answers. Utilization of this discussion board is a key feature
for class interface and will allow you to share your specific experience and knowledge with
others.
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.
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Important Dates this Semester:
Monday, January 13, is the first day of classes for Spring Semester, 2014.
Tuesday, January 21, is the deadline to drop this 8-week course per Sect 9.0 below.
Friday, February 14, is the last day to drop this 8-week course with a Q or W.
Saturday, May 10 at 10 am, is Commencement.
1.0 Course Overview and Description
Catalog Description
An advanced analysis of value–based management techniques with an emphasis on the
factor affecting the corporation’s quest to maximize shareholder wealth. Topics
covered include financial statement analysis, cash flow analysis, economic and market
value added securities valuation, the cost of capital, capital budgeting, capital structure,
divided policy, the use of leverage, working capital management, and corporate
governance.
Prerequisites: FIN 301, ACC 303 and GB 311 or similar courses, unless waived by
Department.
2.0 Course Objectives and Expected Outcomes:
2.1 Student Learning Objectives or “SLOs” (also called Student Learning Outcomes):
The Course Calendar attached to this Syllabus states which SLO listed below is addressed in
each Assessment. SLOs are measurable and, upon completion of this course, the student
should be able to demonstrate the following:
1. Describe the basics of a corporate decision making process aimed at maximizing the firm's
stock price.
2. Discuss the importance of using basic accounting statements in financial analysis.
3. Describe the importance of financial forecasting in overall financial planning.
4. Analyze a firm's financial environment as it pertains to interest rates.
5. Analyze the basics of risk and return as they relate to stocks in isolation and in a portfolio.
6. Contrast the stock valuation models of DDM and CAPM.
7. Describe the time value of money principles for bond and stock valuations.
8. Contrast the implications of different bond ratings.
9. Calculate a firm's weighted average cost of capital (wacc).
10. Describe the importance of wacc for analyzing the optimal capital structure of a firm.
11. Describe the origins of dividend policy decisions.
12. Contrast different strategies for working capital management.
2.2
Upon completion of this course, students should understand the concepts below, which will
be measured as SLOs described above.
a. Understand the type of information found in a corporation’s annual report; explain a balance sheet,
the information it provides, and how assets and claims on assets are arranged on a balance sheet.
Explain what an income statement is and the information it provides. Differentiate between net cash
flow and accounting profit. Identify the purpose of the statement of cash flows, list the factors
affecting a firm’s cash position that are reflected in this statement, and identify the three categories of
activities that are separated out in this statement.
b. Discuss how certain modifications to the accounting data are needed and used for corporate decision
making and stock valuation purposes. Explain the terms: net operating working capital, total operating
capital, NOPAT, operating cash flow, and free cash flow; and explain how each is calculated. Define
the terms Market Value Added (MVA) and Economic Value Added (EVA), explain how each is
calculated, and differentiate between them.
c. Identify the five groups of ratios, specify which ratios belong in each group and demonstrate how each
is calculated. Explain what information each group gives us about the firm’s financial position.
Explain what trend analysis is, and why it is important. Describe how the basic Du Pont equation is
used, and how it may be modified to form the extended Du Pont equation, which includes the effect of
financial leverage. Explain “benchmarking” and its purpose.
d. Explain the relationship between compounding and discounting, between future and present
value. Calculate the future value of some beginning amount, the present value of a single
payment to be received in the future, the interest rate or time, given the other three variables in
the TVM equation, the future and present value of a series of equal, periodic payments (annuity),
the present and future values of an uneven series of cash flows, and construct loan amortization
schedules for fully-amortized loans.
e. Calculate the value of a bond with annual or semiannual interest payments. Calculate the yield to
maturity, the yield to call, and the current yield on a bond. Differentiate between interest rate risk,
reinvestment rate risk, and default risk. Explain the importance of bond ratings and list some of the
criteria used to rate bonds. Determine the value of a share of common stock when: (1) dividends
are expected to grow at some constant rate, (2) dividends are expected to remain constant (zero
growth), and (3) dividends are expected to grow at some supernormal, or nonconstant, growth
rate. Determine the value of a share of preferred stock, or given its value, calculate its expected
return. Apply the total company (corporate valuation) model to value a firm in situations where
future dividends are not easily predictable.
f. Define risk and calculate the expected rate of return, standard deviation, and coefficient of
variation for a probability distribution and historical observations. Explain the significance of a
stock’s beta coefficient, and use the market model to calculate it.
g. Specify how risk aversion influences required rates of return. State the basic proposition of the
Capital Asset Pricing Model (CAPM) and use the Security Market Line to calculate a stock’s
required rate of return.
h. Define and calculate the component costs of debt and preferred stock. Use several approaches to
estimate the component cost of retained earnings. Calculate the cost of new common equity, and
calculate the retained earnings breakpoint. Calculate the firm’s composite, or weighted average,
cost of capital and explain how WACC moderates the optimal capital structure.
i. Calculate net present value (NPV) and internal rate of return (IRR) for a given project and
evaluate each method. Calculate the modified internal rate of return (MIRR) for a given project
and evaluate this method. Calculate both the payback and discounted payback periods for a given
project and evaluate each method.
3.0 Textbooks and Other Materials
(1) Textbook
ISBN-13: 978-0-538-48212-7
Fundamentals of Financial Management (with Thomson ONE - Business School Edition), 13th Edition
Dr. Eugene F. Brigham - University of Florida
Dr. Joel F. Houston - University of Florida
(2) Students may access the free student companion site resources by going to www.cengagebrain.com,
searching ISBN 978-0-538-48212-7, and clicking on “Access Now” from the textbook homepage.
(3) A Study Guide has been prepared to accompany the text. ISBN-13: 978-0-538-48260-8.
It has an outline of each chapter, plus over 400 questions and 140 numerical problems in multiple
choice format with answers and solutions. The Study Guide is useful both to help students get the
“big picture” prior to reading the text and later as a self-test tool. Feedback from students who used it
has been very positive.
(4) Financial Calculator:
Most students select TI BAII+ that can be purchased for about $30. Different models require different
keystrokes, which can lead to different answers and the wrong financial decision; hence, YOU must
know how to use the calculator you decide to use for this course. A tutorial will be posted in Bb.
(5)
Computer and Internet access via your computer or a computer at a computer lab on campus.
Internet access is essential for course communication during the semester.
4.0 Course Requirements:
Attached to the end of this syllabus is a Course Calendar that shows the schedule of course
topics and Assessments. We may move more quickly or more slowly - depending on class
dynamics - to enhance the learning environment. This course requires you to work on your
own a great deal, especially when solving problems at the end of each chapter, as we do not
have enough class time to address all calculations. Also, learning the material is greatly
influenced by a student’s mastery of the prerequisite courses.
5.0 Grading Criteria
The total grade will come from Four Assessments, equally weighted and scored at a
maximum of 100 points each to total 400 points. Extra Credit Assignments will consist of
eight excel problems to be completed throughout the semester scored at a maximum of 3
points each.
The four assessments will consist of questions/problems that are multiple choice, true or false,
and/or short essays that cover both concepts and calculations The due dates will be as posted in Bb,
with changes subject to the discretion of the professor.
Any Missed Exam/Assessment/Assignment/Due Date will count as a zero unless prior
arrangements have been made with the professor, who reserves the right to allow points to be made
up with another assessment.
Incomplete Policy: A grade of “Incomplete” can be given only under extenuating circumstances,
such as serious illness or other necessary absences. Summer semester grades of “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 360 - 400 points
B = 80 - 89%
or 320 - 359 points
C = 70 - 79%
or 280 - 319 points
D = 60 - 69% or 240 - 279 points
F = below 60% or below 240 points
6.0 Complete Course Calendar
The complete course calendar is attached to this syllabus and any changes may be made at the
discretion of the instructor.
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.
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
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 contact Vanessa Snyder at (254)
501-5836 or visit Founder's Hall 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 (APA). Tutors are available at the
Tutoring Center in Founder's Hall, Room 204, and also in the Library in the North Building.
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 254-501-5830 or by
emailing cecilia.morales@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 TAMU-CT 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, click on www.tutor.com/tamuct.
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 A&M-CT 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.ct.tamus.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.ct.tamus.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.
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
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 FINK 400 in the subject line.
14.0 Course Calendar is below.
Topic
Chap
Extra Credit
Excel
Assignment
Excel
Assignment
Due Date
(end of day)
Financial
Statements,
Cash Flow,
and Taxes
Analysis of
Financial
Statements
3
Excel 1
Monday
Jan 27
4
Excel 2
Monday
Jan 27
Time Value
of
Money
5
Excel 3
Monday
Feb 10
Interest
Rates
6
Bonds and
Their
Valuation
7
Excel 4
Monday
Feb 10
Risk and
Rates of
Return
Stocks and
Their
Valuation
8
The Cost of
Capital
(wacc;
optimal
capital
structure;
effect of
leverage on
firm value)
The Basics
of Capital
Budgeting
(NPV, IRR,
Payback,
etc)
10
Excel 7
Monday
March 3
11
Excel 8
Monday
March 3
9
Excel 5
and
Monday
Feb 24
Excel 6
Assessments
Assessment
Due Date
(end of day)
Targeted SLO
(in Syllabus,
Sect 2.1)
Assessment 1
Chaps 3 & 4
Monday
Jan 27
1,2,3
Assessment 2
Chaps 5,6,7
Monday
Feb 10
2,3,4,7,8
Assessment 3
Chaps 8 & 9
Monday
Feb 24
4,5,6,7
Assessment 4
Chaps 10 & 11
Monday
March 3
9,10,11,12