FIN 301: Managerial Finance (Fall 2006)

 

Le Moyne College, Syracuse, NY,                                              Phone: (315) 445-4391,

Email:kim@lemoyne.edu                                                            Room: RH-309

Instructor: Chong Kim,                                                   Office Hours: TTH 1:00 - 2:30, and by appointment

 

Prerequisites: ACT 203, STA 201

Course description: This course serves as an introductory finance course, and is concerned with financial decision-making. Virtually all business decisions have financial implications, and those decisions are judged by their effect on the value of the firm. The course focuses on financial theories, concepts and practical tools necessary for evaluating and analyzing financial issues of corporations.

   Classes will be balanced among lectures, problem solving, and spreadsheet applications. The student is expected to have read the assigned chapters and prepared the problems before coming to class.  While problems will not be collected (except a computer problem), their preparation is a major portion of the assignments. Failure to attempt them will prove detrimental to performance on subsequent tests.

 

Required text:    Brigham, and Houston, Fundamentals of Financial Management, Concise 4th (2004) Ed.,

                        Thomson /South-Western Press.

Recommended readings: Wall Street Journal, Business Week, Fortune, Forbes, The NY Times.

 

Objectives:

   1. To survey basic financial theories and to develop financial frameworks

          to be used in business decision-making.

   2. To get familiar with the basic financial concepts used in security

   markets, risk and return, interest rates and taxes.

   3. To understand how financial management can affect the value of the firm,

   and how the various topics interrelate with one another.

   4. To learn spreadsheet applications in solving financial problems.

   5. To get familiar with global financial markets and institutions.

 

Grading: Two midterms (60%=2*30%) and a final (40%). Because grades are curved, there will be no makeup. If you have a valid excuse for missing a midterm, your course grade will be determined by dividing the weighted scores by (1-.3). If you miss the final with a valid excuse, you must make it up next semester. If you do not have a valid excuse for missing an exam, it will count as zero.

 

Attendance: Attendance is required. Maximum number of unexcused absence allowed is 3. Every absence beyond 3 lowers the final grade by one letter grade. Every excused absence must be informed in writing to and be verified by the instructor.

 

Calculator: Since the course is involved with rigorous computations, a Financial Calculator is required. Each student should get familiar with his/her calculator. Read the instructions in the manual. The instructor is using BAII Plus by Texas Instruments.

 

FIN301, page 2.

 

 

Special Needs: In coordination with the ASC, reasonable accommodations are provided for qualified students with disabilities. Students with special needs should see me and Director of the ASC (x4118) within the first week of class for timely accommodations.

 

Schedule of Topics

(Tentative)

 

Week                                       Topics and Assignments                                                Chapters

 

                        An overview, financial statements, CFs, Taxes                                        ch. 1, 2.

1, 2                   The goal of CFO; Agency relationships; balance sheet,

                        income statements; taxes; cash flow.

                                    Problems: 2-6,10,11

 

3, 4                   Financial environments, time value of money                               ch. 4, 6.

                        Financial markets, institutions; the determinant of

            market interest rates; yield curve; present value of money;

                        amortization

                                    Prob.: 4-1,6,7,12;  6-2,6,12,15.

 

4-1/2                 Exam I: ch. 1,2,4,6.

 

                        Bond and stock valuation                                                                                   ch. 7, 8.

4-2/2, 5,6           Bond valuation, bond yield, bond risk;

                        stock valuation, market for common stock, growth stock

                                    Prob.: 7-5(L-T bond),6,8;  8-2,5,7.

 

                        Cost of capital, capital budgeting                                                                         ch. 9, 10.

7,8,                   Cost of debt, R/E, C/S;.CB decision rules;

                        MCC, NPV, IRR, Pay back

                                    Prob.: 9-8,10,18: 10-7(Trucck),11.

 

9-1/2                            Exam II: ch. 7,8,9,10.

 

                        Risk, return, and cash flow estimation                                                                 ch. 5, 11.

9-2/2,10,            Returns, stand-alone risk, in portfolio, beta, CAPM;

10-1/2               relevant CFs; project risks.

                                    Prob.: 5-6(a),7; 11-7,12.

 

                        Capital structure and leverage, multinational finance                                            ch. 12, 16.

10-2/2, 11,         Target capital structure; business and

12                     financial risk; liquidity; multinational vs. domestic;

                        exchange rates;interest rate parity, purchasing power parity.

                                    Prob.: 12-4(a),5; 16-1,2,8.

 

 

                        Final: ch. 7,8,9,10,5,11,12,16.    5/9/06, 3:00-5:30pm