STATE PENN BRANDYWINE FIN 301 CORPORATE FINANCE Summer 2009
Professor: Dr. Don Taylor, CFA, CFP, ChFC Phone: [phone] (W) E-mail: [e-mail] Course Information: www.angel.psu.edu Office: 207D TMZKO Office hours: T, R 4:45-5:45 All other times by appointment Section: 615 Class meets: T, R 6:00-9:25 pm Classroom: 101 TMZK
FIN 301 Corporation Finance (3) Nature of finance function; risk and return concepts; working capital; dividend policies; mergers; security markets; acquisition and management of corporate capital; analysis of operations, forecasting capital requirements; raising capital; and planning profits. This course may not be used to satisfy Smeal College baccalaureate degree requirements. Not available to students who have completed BA 301. Course Description FIN 301 provides a basic understanding and framework of how firms acquire, allocate, and control their financial resources. It covers the acquisition and management of corporate capital; analysis of operations, forecasting capital requirements, raising capital, and planning profits. This is an introductory finance course focusing on basic financial principles and practices essential to managing a business. In addition, this course also covers financial markets, institutions, organizational forms and investments. FIN 301 relies heavily on accounting and economic principles with a strong emphasis on problem solving and decision making. One objective of this class is to be able to assess the past and present performance of the firm. This can be achieved through vertical and horizontal analysis of the financial statements as well as ratio analysis. Another aspect of this course is the financial planning process. This includes concepts such as pro forma statements, developing the statement of cash flows, as well as the budgeting process through the preparation of the cash budget. Another facet of this class is to understand how financing and investment decisions are made. Students will learn about the time value of money as well as fundamental techniques for valuing financial assets such as stocks and bonds. Additionally, capital budgeting techniques such as the net present value and internal rate of return are explained. Other important objectives include the management of working capital, the determination of the cost of capital, operating and financial leverage, and risk and return. The concepts and tools covered in this class allow the student to gain a fundamental understanding of how the finance function works within the business environment. Finance 301 promotes critical thinking and will enable the student to better integrate the individual functions of a business in order to make good business decisions. Prerequisites: ACCTG 211;ECON 004;MGMT 301;SCM 200 or STAT 200
Measurement of Learning Outcomes:
Your performance in this course will be measured as follows: 10 Homework (best 10 of 12) 0 10 First exam 0 10 Second exam 0 10 Third exam 0 40 0 total points Exams: Exams will be a combination of multiple choice, essay, and problems with the structure announced prior to the exam date. Homework: Homework is an integral part of the course. Homework assignments when assigned are due at the beginning of class and must be submitted electronically as a Word, Excel, or PDF file. Late assignments are not graded and automatically earn a grade of 0. Homework is to be submitted electronically to a drop box on Angel. See the end page of the syllabus for more about homework. Extra Credit: Dont ask for it because it isnt available. Doing your best on the tests and the homework assignments is the only path to a good grade in this course. Class participation and attendance: Class attendance is only required on exam dates. Only excused absences where the instructor is notified prior to the exam are acceptable on scheduled exam dates. I will gladly work with students who have good reasons for missing an exam; otherwise, there is a penalty for missing an exam. This penalty is up to 25 percentage points deducted from the score of the make-up exam. Course Grading Letter grades expressed as a percentage of points earned to total points available in the course. A = 93.33 100 A- = 90 93.32 B+ = 87.9 89.9 B = 83.33 87.8 B- = 80 83.32 C+ = 75 79.9 C = 70 74.9 D = 60 69.9 F = Below 60 Drop/Add Period ends Thursday, May 21st. Late drop deadline is Thursday, June, 18th. Withdrawal deadline is Friday, June 26th.
Course Requirements Read assigned readings Complete assigned work Regularly check e-mail / ANGEL for information related to the course Ask questions if you do not understand something! Required Materials Fundamentals of Financial Management (Concise Fifth Edition) by Brigham and Houston (publisher: Thomson South-Western; ISBN: 0324319835) Other readings as assigned A financial calculator. o The HP 10BII is my choice and the one Ill be using in class. The bookstore has this calculator in stock. o Although I strongly suggest that you use an HP10BII the only requirement for the calculator you use is that it cant store text. o I cant help you with the keystrokes on calculators other than the HP10B, HP10BII and the HP12C. Youre on your own with other approved calculators. Computer access including Word & Excel software. Class Notes and Other Course Information I will post the course syllabus and other relevant course materials on ANGEL. If you are having trouble accessing this information on Angel, please contact me.
Tentative Course Outline1
Date Topic An Overview of Financial Management; Financial Statements, Cash Flow & Taxes Brigham/Houston Readings Assignment Ch 3 problems 1-10 pp. 91-92. Due 5/21. Ch 2 even # problems 226 pp. 56-58. Due 5/26. Ch 4 odd # problems 1-19 pp. 131-132. Due 5/26 Chapter 5 has no homework problems, Ch 6 problems 1-7 p. 203. Due 6/2. Ch 7 problems 1-11 pp. 240-241. Due 6/2 Ch 8 problems 1-13 pp. 282-283. Due 6/4 Ch 9 odd # problems 117 pp. 318-320. Due 6/09 Ch 10 even # problems 2-12 pp.351-352. Due 6/09 Ch 11 problems 1-7 p. 381. Due 6/16 Ch 12 problems 1-3, 6, 8 pp. 411-412. Due 6/18. Chapter 13 problems 17 pp. 453-454. Due 6/23 Chapter 14 problems 16 p. 491. Due 6/25
19-May
Ch 1, 3
21-May
Time Value of Money, Analysis of Financial Statements
Ch 2 plus Calculator Review, Ch 4.
26-May 28-May 2-Jun
Financial Markets and Institutions, Interest rates First Exam covering Chapters 1-4. Bonds and Their Valuation Risk and Rates of Return
Ch 5, Ch. 6 Ch. 7 Ch 8
4-Jun 9-Jun 11-Jun 16-Jun 18-Jun 23-Jun 25-Jun
Stocks and their Valuation, The Cost of Capital The Basics of Capital Budgeting Exam 2 Covering Chapters 5-10 Cash Flow Estimation and Risk Analysis Capital Structure and Leverage Distributions to Shareholders: Dividends and Share Repurchases Final Exam Covering Ch 11-14
Ch 9, Ch 10 Ch 11
Ch 12 Ch 13 Ch 14
1.) This course outline is tentative and subject to change.
Academic Integrity: All students are expected to act with civility and personal integrity; respect other students' dignity, rights and property; and help create and maintain an environment in which all can succeed through the fruits of their own efforts. An environment of academic integrity is requisite to respect for self and others and civil a community. Academic integrity includes a commitment not to engage in or tolerate acts of falsification, misrepresentation or deception. Such acts of dishonesty include cheating or copying, plagiarizing, submitting another persons' work as one's own, using Internet sources without citation, fabricating field data or citations, "ghosting" (taking or having another student take an exam), stealing examinations, tampering with the academic work of another student, facilitating other students' acts of academic dishonesty, etc. Academic dishonesty violates the fundamental ethical principles of the University community and compromises the worth of work completed by others. A student should avoid academic dishonesty when preparing work for any class. If charged with academic dishonesty, students will receive written or oral notice of the charge by the instructor. Students who contest the charge should first seek resolution through discussion with the faculty member or the campus Director of Academic Affairs. If the matter is not resolved, the student may request a hearing with the University College Committee on Academic Integrity at the campus. Sanctions for breaches of academic integrity may range (depending on the severity of the offense) from F for the assignment to F for the course. In severe cases of academic dishonesty, including, but not limited to, stealing exams or "ghosting" an exam, students may receive a grade of XF, a formal University disciplinary sanction that indicates on the student's transcript that failure in the course was due to a serious act of academic dishonesty. The University's statement on Academic Integrity from which the above statement was drawn is available at: http://www.psu.edu/dept/oue/aappm/G-9.html Note to students with disabilities: In accordance with the Americans with Disabilities Act of 1990, it is Penn States policy to provide reasonable academic adjustments for students with documented disabilities. If you have a disability-related need for modifications in this course, contact Sharon Manco, 610-892-1461, 127 Vairo Library, [e-mail]. This notification should occur by the end of the first week of the semester. Students may visit www.equity.psu.edu/ods/ for complete information.
Emergency Evacuation Exercises or Actual Emergency Events Periodic fire/evacuation exercises are conducted in all occupied PSU Brandywine buildings. Every PSU Brandywine faculty, staff, and student is expected to exit the building and remain outside until the drill or actual event is completed. Drills are a safe opportunity to test the building emergency plan, insure that the fire alarm is working properly, and allows every employee a chance to experience the procedures. Guidelines in the Event of a Drill or Emergency Please familiarize yourself with the emergency evacuation plan posted in each classroom. Do not use elevators. Use stairs. Fire doors close but do not lock or trap a person in an area. Should evacuation be necessary, go to the nearest exit or stairway and proceed to a predesignated evacuation meeting area (150 feet away from building) outside the building. Stay with your instructor and class. Please do not leave the meeting area, return to your classroom, or go to your vehicle unless instructed to do so. Campus Closings and Cancellations In the event of an unanticipated closing due to inclement weather or another emergency, you may obtain official information regarding the status of classes by: Calling the Campus Student Information Line at 610-892-1275. Listening to KYW NewsRadio -1060 AM Codes for Class Cancellation 495 - Daytime 2495 - Evening Watching WTXF FOX 29 Television OR NBC-10 TV after 6:00 a.m. Closings are listed by our campus name, Penn State Brandywine.
About the Instructor Don Taylor is an Assistant Professor of Business Administration at PSU Brandywine. Dr. Taylor received his undergraduate degree in finance from The Pennsylvania State University. He earned his master's in business administration degree at the Rochester Institute of Technology and his PhD at Florida Atlantic University. Dr. Taylor also writes a daily advice column on personal finance topics for Bankrate.com. He has taught personal finance, investments, financial institutions, corporate finance, and advanced managerial finance classes at The American College, Florida Atlantic University and at the University of Wisconsin-Platteville. He has taught International Finance in the MBA program at Arcadia University. Apart from teaching, Dr. Taylor has been the treasurer of a county-wide school district in Florida and a debt management analyst for the fiscal agent of the Federal Home Loan Banks. Dr. Taylor is a member of the Financial Planning Association, the Financial Management Association, the Academy of Financial Services, and the CFA Institute.
FIN 301 Homework Guidelines
A few basic rules about homework: DUE DATE: the homework is due at the beginning of class on the date stated. No extensions will be given, as these are graded assignments and we will be discussing the solutions during the due dates class. You may hand in homework late, but I will simply review it the grade for a late submission is always 0. You should print out a copy of your homework or have it available on your laptop so you can follow along as we go over it in class. GRADING: Homework comprises a major portion of your final grade. Homework will have a varying number of problems. The homework assignments are equally weighted even though they get more difficult as the semester progresses. Your grade for homework will be based on the best ten of twelve scheduled assignments. FORMAT: Your problems must be submitted as Microsoft Excel or Word documents (.xls or .xlsx, .doc, or .docx) and uploaded to the ANGEL drop box so designated for this assignment. If you dont have access to Word or Excel you can scan your handwritten work but this solution is not preferred. I WILL NOT ACCEPT SUBMISSIONS VIA E-MAIL OR ON PAPER! CONTENT: Your solutions must show all your work. Many of the problems will have no single correct answer, so the more work you show, the more I can assess your understanding. If your reasoning is correct but the answer is wrong, youll get most or all of the credit if you show your work. CALCULATIONS: Although you will use a financial calculator to do the homework, you need to show the inputs on the spreadsheet. For most homework problems, the answer is in the back of the textbook so submitting just a correct numeric answer doesnt get you any points. Once youre comfortable using the financial calculator, Id encourage you to try to use Excels financial functions to do the homework. Just remember that you wont be able to use a spreadsheet on the exams. TIME ALLOTMENT: In most cases these assignments cant be done in the hour before class. Allow at least two-three hours for each homework assignment. YOUR OWN WORK: Your submission must be your own individual work. Even if you work in groups to help each other understand the material, your work must be your own. If I get duplicate copies of a problem submission all submitters will get a 0 grade for that problem, and other penalties may apply.