Description: Description: Description: Description: Description: Description: Description: Description: Description: Description: Description: Description: Description: The University of Texas at Dallashttp://www.utdallas.edu/~plewin/meco6303_files/image004.gif

 

 

Spring 2015

 

Home Page:

http://www.utdallas.edu/~plewin/

Semester Start/End Date:

January 12 -  May 5, 2016

Grades due:

May 12, 2016

 

Fin3320 Business FinanceSpring 2015

 

Class Section - Class Number

Class Title

Schedule & Location

FIN 3320.501 24429

Business Finance

Tues : 7:00pm-9:45pm JSOM 12.222

 

Instructor Information

1).   Contact information

Email:  [email protected]

Phone: 972-883-2729

Office:  SOM 3.223, UTD

You can contact me anytime by phone or email, and – for on-campus sections - see me by appointment in my office.

 

2).  Instructor brief biography

I was born and grew up in Johannesburg, South Africa. I received a BA (honors) degree in Economics and History from the University of the Witwatersrand in Johannesburg in 1969. In September 1972, after teaching at the business school at that University, I left to study at the University of Chicago. I received a Ph.D. in Economics from the University of Chicago in 1979. I was fortunate to have as teachers at least four Nobel prize winners. In January 1979 I moved with my family to Dallas, where we have lived ever since. After seven years as an academic, I tried my hand in an entrepreneurial venture and joined a friend in a startup business called Soft Warehouse. Today it is called CompUSA. I was one of its founding shareholders. It was a difficult but very educational experience. In 1992 I decided to return to academics and have been with the UTD School of Management since 1997. I love my job. I have a passion for teaching and for economics.

 

My wife and I were married in December 1969. We have four children and nine grandchildren.

 

To see more about my professional and personal life visit my website at http://www.utdallas.edu/~plewin/

Course Prerequisites:

The prerequisite courses for Fin3320 are Math1326, Math2333 (or OpRe3333), Acct2301, Acct2302, & MIS3300.  This Fin3320 course also has one co-requisite course:  either Stat3360 or OpRe3360.  Also, at an absolute minimum, I expect you to have a basic understanding of Excel, as well as a basic understanding of balance sheets and income statements.

 

Course Description:

This course offers rather in-depth coverage of the fundamentals of corporate finance, an overview suitable for any student who is interested in finance.

We begin by learning how to use accounting information to evaluate a firm's financial health and its tax burden, and we learn why investors care more about cash flow than accounting-based performance.  We will spend a fair amount of time learning how insightful a statement of cash flows can be and how this statement ties back to the balance sheets and an income statement.

We will then spend a reasonable amount of time ensuring that you have a clear understanding of the time value of money ¾ if there is one concept of which every student should walk away from this class with a clearer understanding, it is time value of money.  We then use the time-value-of-money concepts to value an uncertain stream of future cash flows which an asset is expected to generate.

The second module begins with specific applications of the valuation of a stream of future cash flows: we learn how to value bonds and stocks.  Next, we will study the fundamental investing and operating decisions undertaken by a firm's management.  We will consider which of the many possible investment projects available to the firm are worth undertaking, using fundamental tools such as net present value analysis.  We will delve into the tools’ math, which relies heavily on time-value-of-money principles, and we will also learn the process that goes into determining which cash flows are relevant to, and should be included, in the analysis.

The third module has two main foci.  We first focus on the trade-off between risk and return and on how portfolio diversification can reduce risk without compromising return!  (Of course, we also need to know how to measure risk, as well as what kind of risk is important.)  This diversification theory can serve an individual well either in his/her personal investments or in his/her role as a firm's manager, since a firm is effectively a portfolio of assets.  We will focus on the most common sources of long-term financing (namely, debt and equity), as well as the costs and expectations associated with each respective source of capital.  These variables will tie together into an important concept called weighted average cost of capital, which essentially tells the firm the average rate of return that its various investors are requiring.  We will conclude with a brief overview of the theory of efficient markets.

 

Course Objectives:

You will learn to understand how and when to apply the basic concepts of financial analysis in a business setting, demonstrated through your ability to:

• Be able to apply time-value-of-money concepts to various valuation problems.

• Be able to describe what drives a firm's cost of capital and how to estimate it.

• Be able to analyze investments in real and financial assets using various methodologies.

Calculators:

For this course’s exams, you are allowed to use any calculator that you prefer except for any calculator that (i) resides on a smart phone and/or (ii) has wireless access to the internet. Also, if you use a programmable calculator (e.g., TI‐83 Plus or TI‐84), you are not allowed to use the calculator’s programming features. An exam proctor will monitor calculators before (or during) each exam to be sure that they comply with this rule; ifa calculator is not compliant, the proctor has the authority to remove the calculator for further use on that exam.Please do not risk having to incur the consequences. If you plan to use an unfamiliar, obscure type of calculator, you should check with your instructor any time to see whether it meets the above rules. Time‐value‐of‐money material in this course will be taught to you in two ways: (1) using five fundamental math equations and (2) using financial‐function keys on a calculator. If you master either approach, you are well‐equipped to be successful in this course; mastering both approaches makes you even more competent. Your course instructor is required to be fluent in the financial functions for only calculators that are made by Texas Instruments and contain financial functions (e.g., TI BA II Plus, TI‐83 Plus, TI‐84 Plus, TI‐86, etc.). If you choose to use the financial functions on any calculator that is not of the Texas Instruments brand, you are required

to learn these keys on your own. Any common calculator will have a user’s manual, as well as tutorials on YouTube for how to use it.

 

SUGGESTION: If you use a TI BA II Plus (or Plus Professional), you will be wise to change the order of operations on your calculator, so that the keystrokes “2 + 3 x 4” yield 14 (and not 20 – ha!) or so that “6 + 3 ^ 2” yields 15 (and not 81!). Also, you also almost certainly want to re‐program your calculator so that it reports results to five or six decimals (as opposed to two).

Text, Slides, eLearning and Connect

The required text is S. Ross, R. Westerfield, & B. Jordan, Fundamentals of Corporate Finance, 11th Ed., Mc-Graw-Hill Companies, Inc. [with a Connect access code that is required for this course].  If you purchase Connect Plus , you can get a Connect access code plus a digital copy of the textbook.  You do need access to Connect this semester; Connect is an online software that allows students to submit homework assignments and check their work on-line.

I make extensive use of UTD eLearning. I have connected the eLearning module for this course to the McGraw Hill Connect. So you can find the links to your homework assignments on eLearning together with all the other information necessary for this course.

I will be posting various items of supplementary material for you to consult at your leisure.

 

Course Presentation

In this course I will follow the textbook very closely. Each class will consist of a PowerPoint presentation derived from a relevant chapter in the book. I have posted all of the PowerPoint chapter files on the eLearining module for you so that you can download them.

For each chapter, you will definitely want to go through the slides, preferably before and after class. Below is a planned lecture  and homework schedule.

 

Class

Date

Chapter

Homework Assignment #

Date due

1

Tuesday, January 12, 2016

Intro, 1

 

 

2

Tuesday, January 19, 2016

2

 

 

3

Tuesday, January 26, 2016

3

1

Sunday, February 07, 2016

4

Tuesday, February 02, 2016

4

2

Sunday, February 14, 2016

5

Tuesday, February 09, 2016

5

3

Sunday, February 21, 2016

6

Tuesday, February 16, 2016

6

4

Sunday, February 28, 2016

 

2/19/2016 -2/21/2016

 

 

Test 1

7

Tuesday, February 23, 2016

 7

5

Sunday, March 06, 2016

8

Tuesday, March 01, 2016

8

6

Sunday, March 13, 2016

9

Tuesday, March 08, 2016

9

7

Sunday, March 20, 2016

 

Tuesday, March 15, 2016

Spring Break 

 

10

Tuesday, March 22, 2016

10

8

Sunday, March 27, 2016

11

Tuesday, March 29, 2016

 11

9

Sunday, April 03, 2016

 

04/01/2016 -04/03/2016

 

 

Test 2

12

Tuesday, April 05, 2016

12

10

Sunday, April 10, 2016

13

Tuesday, April 12, 2016

13

11

Sunday, April 17, 2016

14

Tuesday, April 19, 2016

14

12

Sunday, April 24, 2016

15

Tuesday, April 26, 2016

Review and makeup

13

Sunday, May 01, 2016

 

Saturday, May 07, 2016

 

 

Final Exam

 

Alternative for Purchasing Textbook & Access to Connect:

1. All digital: Includes access to SmartBook and Connect. Available directly from McGraw‐Hill via a course specific link provided elsewhere in this syllabus. ISBN # 9781259291852. Estimated cost: $125.

2. All digital, as in option 1, but with option to purchase a loose‐leaf, color‐printed textbook. Available directly from McGraw‐Hill. Estimated extra cost for the printed copy of the textbook is $40, for $165 total

3. All digital with optional loose‐leaf print (same as option 2) purchased from the UT Dallas Bookstore. ISBN # 9781259407727. Estimated cost: $275.

4. All digital along with traditional hard‐cover textbook purchased from bookstore. ISBN # 9781259418952.Estimated cost: $328.

 

You do need access to Connect this semester; Connect is an online software that allows students to submit homework assignments and check their work on‐line.

 

Student Assessment:

Your grade will be based on your performance on the homework assignments and on the three exams, including a comprehensive final exam that will be taken in common, at the exact same time, by all students who are enrolled in all of the various sections of Fin3320 this semester.  Exam dates are listed below. The percentage weights for each assessment component is indicated.

 

Total evaluation is based on the assignments and the tests as indicated below

 

Assignments: homework questions assigned  (For more information on the  Assignments see the assignment page)  

40%

Test 1 (covers module 1- chapters 1-5) online

30  questions

2/19/2016 (12 am) -2/21/2016 (11:59 pm)- 1 ½  hours

15%

Test 2 (covers module 2-chapters 6-10) online

30  questions

04/01/2016 (12 am) - 04/03/2016 (11:59 pm) - 1 ½ hours

15%

Test 3 (final, departmental exam, comprehensive, chapters 1-14)

Davidson Auditorium JSOM 1.118

05/07/2016 – 11 am – 1:35 pm.

30%


I routinely curve the course scores when determining the final grade.

Departmental Final Exam:

A common final exam will be given for all students across all sections of this Fin3320 course as indicated on Saturday May 7 from 11:00am-1:35pm.   You cannot make up this exam if you miss it (except as described in the following paragraph).  At this comprehensive final exam, you will not be allowed to bring backpacks, bags, books, cellphones, laptops, notebooks, or scratch paper.  Please see the section above titled “Calculators” for information about what types of calculators are permitted for this exam.  You will have to bring a pencil, an eraser, an acceptable financial calculator, a Scantron form 882-E, and a photo ID (e.g., UTD Comet Card (preferred), state driver’s license, or passport).

Students will not be able to take the exam without a photo identification.  If a student is to miss an exam in the event of an medical emergency, a car accident, or a religious holy day, the student must notify his/her instructor by e-mail or telephone before the final exam begins.  Last-minute emergencies such as hospitalization, car wrecks on the way to the exam, et cetera, will have to be substantiated by supporting documents and in these  cases the students will receive an incomplete grade (an “I”) in the course and will take the exam in a common-hour sitting early in the following semester. There will be no exceptions.

 

The location for the final exam is Davidson Auditorium - JSoM 1.118. As mentioned, students  must take the final exam at the scheduled time, with very few exceptions made. Any problems with this need to be taken up with Professor Greg Durham ([email protected]).

 

I have placed some materials in Supplementary Materials that may help you prepare for the final.

1) Formula Sheet:  This sheet will be appended to each exam.  These formulas are the only ones that will be provided.

(2a) Practice Questions:  This sheet contains problems that are *highly* representative of problems that will appear on the exam.  If you can solve all of these practice problems, you should be very well-prepared to do well on the final exam.

(2b) Answers to Practice Questions. 

(3) Exam Breakdown:  This half-page writeup can help you to optimally allocate their efforts across the chapters when studying.

 

Academic Integrity:

The faculty expects a high level of responsibility and academic honesty from its students. Academic responsibility and honesty are important and any departures and/or violations could severely affect your grade and university status. For additional information, please see http://policy.utdallas.edu/utdsp5003.

Withdrawals:

The administration of this institution has set deadlines for withdrawal of any college-level courses. These dates and times are published in that semester's course catalog.  Administration procedures must be followed.  The student is responsible for fulfilling the withdrawal requirements associated with any class.  In other words, I cannot drop or withdraw any student.  You must do the proper paperwork to ensure that you will not receive a final grade of "F" and receive a “W” instead in a course if you choose not to attend the class once you are enrolled.  I will not announce withdrawal deadlines or any other enrollment-related dates.

University of Texas at Dallas Policies and Procedures for Students:

The University of Texas at Dallas provides a number of policies and procedures designed to provide students with a safe and supportive learning environment.  Brief summaries of the policies and procedures are provided for you at http://go.utdallas.edu/syllabus-policies and include information about technical support, field trip policies, off-campus activities, student conduct and discipline, academic integrity, copyright infringement, email use, withdrawal from class, student grievance procedures, incomplete grades, access to Disability Services (Office of Student AccessAbility – OSA), religious holy days, and avoiding plagiarism.  You may also seek further information at these sites: http://www.utdallas.edu/deanofstudents, http://www.utdallas.edu/deanofstudents/policies, and http://www.utdallas.edu/studentaccess.