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School of Business

 

F301 FINANCIAL MANAGEMENT
COURSE OUTLINE FOR SPRING 2017
(Day Class #29242 Tu & Th 1:00-2:15 p.m. KO 108)
(Eve Class #28667 Tu 6:00-8:45 p.m. KO 108)

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INSTRUCTOR: Dianne Roden, PhD
Office: KO 174G; phone: (756)-455-9470
Office hours: Tu & Th  2:30-4:00 & 5:30-6:00 p.m. or by appointment
WEB PAGE:  
Roden's Home Page
email EMAIL:    droden@iuk.edu

  ross    TEXTBOOK:   Ross, Westerfield & Jordan, Essentials of Corporate Finance, 7th edition 
  The student companion website for the textbook includes chapter summaries and on-line quizzes.   text website  

TI
                            BAII Plus
  A calculator is necessary to do the assignments and exams. A financial calculator is strongly recommended.
  Assistance with financial calculators can be found at: www.tvmcalcs.com


OPTIONAL: Study Guide for Essentials of Corporate Finance. This book will be on reserve in the library.

PREREQUISITES:  BUS A201, A202;    ECON E201, E202, E270   (Graduate students should consult with the instructor)
 
EXAMS: There will be three exams, two during the semester and one during the final exam period.
 

first midterm Feb 14
in class
second midterm March 28
in class
Final exam May 2
Day:1:00-3:00 & Eve:6:00-8:00 p.m.
 
Your grade will be determined based on the following weights:
 
first midterm 30% 75 points
second midterm 30% 75 points
Final exam 30% 75 points
class participation
10%
25 points
TOTAL 100% 250 points

Exam format will contain some multiple choice, some short answer, and a number of problems similar to ones assigned in class.

CLASS PARTICIPATION: Problems and questions from the text will be assigned each week and the solutions discussed in class. Participation in this process, other class discussions, and general attendance will impact this portion of the grade.

GRADES: A 90-100%, B 80-89%, C 70-79%, D 60-69%, F < 60%
(plus and minus grades will be given in the high & low range of each group)
Grades will be posted on Canvas at:     canvas.iu.edu
 
GOALS:
This course is an introduction to corporate finance providing a conceptual framework of the firm's investment, financing, and dividend decisions. Students will be prepared to face many of the issues that confront financial decision makers in a global setting. The students will develop an understanding of risk, rates of return, and valuation.

OBJECTIVES:

  • Understand the concept of time value of money and applications of discounted cash flow.
     
  • Utilize valuation models in order to value stocks and bonds.
     
  • Understand and apply the concept of discounted cash flows in a capital budgeting setting. Students are required to demonstrate competence in Net Present Value analysis.
     
  • Be proficient in measuring risk and grasp the risk-return tradeoff as described in the Capital Asset Pricing Model.
     
  • Comprehend the theory of capital structure including the weighted average cost of capital.  
     
  • Be familiar with the factors that influence a firm's dividend and reinvestment policy.

The structure of this class makes your individual study and preparation outside class extremely important. You will get much more from the lectures if you attempt the problems on your own and you come to class prepared.
The course builds from chapter to chapter and a failure to understand the major concepts of one chapter will lead to difficulties in understanding the chapters which follow. The readings and problems from the text will be supplemented by cases which will be handed out in class.

LIBRARY RESOURCES: A Study Guide for Essentials of Corporate Finance will be put on reserve in the library. The IUK library offers a large variety of resources to supplement this course. Examples include current newspapers (Wall Street Journal), magazines (Business Week), databases (ABI Inform), and access to the Internet.   IUK library
 

WEEK DATES TEXT TOPIC & ASSIGNMENT 
(C=Concept Questions & P=Problems at end of each chapter)
1 Jan 10

(Jan 12)
ch1 

ch2
introduction & overview 

financial statements & cash flows
2 Jan 17

(Jan 19)
HW 

ch4 & ch5
ch1 C#1,2,5,12     Ch2 C#2,4,7   P#1,2,5,6,7,8,14 

time value of money & discounted cash flow
3 Jan 24

(Jan 26)
HW 

ch6
ch4 C#1,3,6    P#2,3,6,9,10,17     ch5 C#1,2   P#1,2,4,5,7,9,10,12,20

interest rates & bond valuation
4 Jan 31

(Feb 2)
HW 

ch7
ch6 C#2,5,6,9    P#1,3,4,6,9,11,15,19 

valuation of stocks
5 Feb 7

(Feb 9)
HW 

review
ch7 C#2,5,6,11    P#1,2,7,8,12,13,15,16

review for first exam
6 Feb 14

(Feb 16)
EXAM I 

ch8
EXAM I 

net present value & investment criteria
7 Feb 21

(Feb 23)
HW 

ch9
ch8 C#2,3,5,7   P#3,4,5,6,12,15,16

capital investment decisions
8 Feb 28

(March 2)
HW 

ch10 & ch11
Case: Monet Brothers #1,2,3,4,5,6,7,9 

risk & return
9 March 7

(March 9)
HW

ch 12
ch10 C#3,9    P#1,2,4,9,10       ch11 C#1,6,7    P#3,7,10,12,13,16,17

cost of capital
10 March 14

(March 16)

no class

SPRING BREAK
11 March 21

(March 23)
HW

review
ch12 C#3,4,10    P#3,5,7,9,15,17,18

review for second exam
12 March 28

(March 30)
EXAM II

ch13
EXAM II

financial leverage & capital structure
13 April 4

(April 6)
HW

ch14
ch13  C#1,5,6,10     P# 1,4,5,11,12,14,16

dividend policy
14 April 11

(April 13)
HW

ch15
ch14  C#1,3,4,7,9     P#1,4,5,7,8,9

raising capital
15 April 18

(April 20)
HW 

ch18
ch15 C#1,3,4,5,9   P#1,4,5,6,7

international finance
16 April 25

(April 27)
HW 

review
ch18  C#1,3,5    P#1,2,3,5,6,7,11,14

review for final exam
17 May 2

FINAL 

FINAL EXAM
 

Mission Statement:
The Mission Statement of the IUK School of Business may be found at:  Mission Statement     

Accessibility:
Every attempt will be made to accommodate qualified students with disabilities (e.g. mental health, learning, chronic health, physical, hearing, vision, neurological, etc.) You must have established your eligibility for support services through the appropriate office that services students with disabilities. Note that services are confidential, may take time to put into place and are not retroactive. Please contact your campus office as soon as possible if accommodations are needed. Find your office at:  Accessibility    

Academic Integrity:
Indiana University defines academic misconduct as any activity that tends to undermine the academic integrity of the university. If a student is found committing an act of academic misconduct, the student will receive zero on the exam, paper or assignment involved. For more information read the IU Code of Student Rights, Responsibilities and Conduct at:  Academic Integrity   

Sexual Misconduct:
Indiana University has adopted a comprehensive, university-wide policy on sexual misconduct. The policy serves to provide information on how to report allegations of sexual misconduct, and information on resources and assistance.
The complete policy may be found at
:   Sexual Misconduct      



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