FIN 357 Miller Spring 11 Syllabus

FIN 357 Miller Spring 11 Syllabus - Business Finance Spring...

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1 Business Finance Spring 2011 Course Information Instructor Information Course Number: FIN 357 I nstructor: J. David Miller Times: MW 3:30 (03185) UTC 1.132 Office: GSB 5.124D Office Hrs: Monday & Wednesday 2 to 3:30 PM E-mail: [email protected] Prerequisites: ACC 312, STA 309, ECO 304K, 304L, and credit or registration for BA 324 Textbook: Corporate Finance: Core Principles and Applications, Third Edition , Ross, Westerfield, Jaffe, Jordan, McGraw-Hill Irwin. A copy of this text is on Reserve at PCL. Course Objective: The firm is an economic entity that strives to create wealth. The firm's success depends on the skills of its managers in making decisions that determine the firm's interaction with its economic environment. This course examines these decisions: The investment decision: How managers look into an uncertain future and decide what assets the firm will acquire based on their view of their competitive markets. The financing decision: How managers obtain the capital necessary to purchase the assets they require. These decisions are made in a market framework. This requires that we also understand the major aspects of markets and how they influence these decisions. Aspects of market-based decisions : A market is a structure within which individuals and institutions buy and sell goods and services. This is a simple concept; however, it has tremendous—and often unrealized—implications for those making corporate managerial decisions. The following implications will be woven into this course. Market values: Companies operates in a market environment. Choice and competition exist in this environment and affect all decisions, even those that may appear strictly internal to the company. Managers must value projects from the viewpoint of those outside of the company whose choice determines the company’s survival and profitability: investors and customers. Cash flow: There are several classes of information available to managers: internally-focused information for control, externally-focused information for reporting, accounting information that follows specified procedures, economic information for financial asset pricing, etc. While all information has the same ultimate focus—to measure the wealth effects of decisions—managers must understand how these information sources differ and when they should be used. The selection and use of information flows is guided by the unifying concept of cash flow analysis. Time value of money: Interest rates exist: the value of a dollar expended today is not the same as a dollar received in three years. Managers must be able to relate investments made in the current period with cash inflows expected to be received from investments at a future point in time. Risk:
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This note was uploaded on 09/09/2011 for the course FIN 357 taught by Professor Hadaway during the Spring '06 term at University of Texas.

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FIN 357 Miller Spring 11 Syllabus - Business Finance Spring...

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