COURSE DESCRIPTION FROM COLLEGE CATALOG:

A study of the organization’s problems in obtaining, allocating, and managing funds. It examines the sources of funds; costs of obtaining these funds; management of the firm’s capital structure; and financial planning for a firm’s growth and expansion. Emphasis is placed upon the composition of capital structure, capital budgeting, and the cost of capital theories. Problems and case analyses study bond and stock markets, as well as short-term financing issues.

PURPOSE OF THE COURSE:

To provide the student with an in-depth review of the basic principles of corporate finance and the tools from which to analyze and make corporate capital structure decisions.

OBJECTIVES:

At the conclusion of this course the student will be able to:

• Discuss the risk-return tradeoff.
• Know how to employ the principles of the time value of money.
• Discuss the timing of cash flows and how to measure incremental cash flows.
• Construct a statement of cash flows.
• Use ratio analysis to study financial reports.
• Demonstrate knowledge of the concept of "sustainable growth".
• Calculate and use the portfolio rates of return/variance for investment decisions.
• Compare and contrast long-term debt, preferred stock, and common stock.
• Demonstrate familiarity with issuance/cost of equity securities.
• Discuss the components in a project’s cost of capital.
• Demonstrate knowledge of the effects of debt upon a firm’s capital structure decisions.
• Employ dividend policy to maximize a firm’s financial performance.
• Be able to complete individual and team-based cost analysis.

These objectives can only be achieved through joint effort. I will work to stimulate your interest and learning in these areas, but you will be expected to display initiative and a program of self-study as well. In that sense, a complementary objective of the course is to provide you with an environment that will encourage and reward your own intellectual effort, while simultaneously maintaining rigorous standards that identify those who are motivated to pursue excellence in their own educational preparation for a business career.

ACADEMIC HONESTY

Students are advised that cheating and plagiarism are not tolerated at St. Gregory’s University. Students are expected to abide by the University's academic regulations and policy and are responsible for awareness of the University's definition of these activities. The consequences of violating the academic honesty standard may include a grade of "0" on the assignment/exam, a grade of "F" in the course, and, possibly, expulsion from the University.

REQUIRED TEXT AND SUPPLEMENTAL MATERIALS TO BE PURCHASED BY STUDENT:

• Foundations of Finance; The Logic and Practice of Financial Management; Keown, Scott, Martin, and Petty, Third Edition, Prentice Hall, 2000.
• Texas Instruments Business Analyst II Plus financial calculator

INTERNET RESOURCES

METHODS OF ASSESSMENT AND STUDENT EVALUATION

If any exam question is left unanswered, the value of that question will be subtracted from the exam score. If only the answer is given (i.e., no work showing how that answer was determined), the question will be graded at 50% of its value. Being prepared and present for the exams is your responsibility. The exams will be given on schedule. Mark your calendars now. Make-up exams will not be given. If an exam is missed, your total points possible will be adjusted accordingly.

COURSE OUTLINE

The schedule is flexible. Much material is required. It is not possible for an instructor to cover all the course material without student independent study. As students are interested in a particular topic or as test scores warrant review, more time will be spent on a chapter, or as may be required.

Homework serves as a focus of class discussion. A legible photocopy is due at the first of class. Please retain the original to allow you to participate in class discussions.

Your homework will be graded for effort, not for correctness. Late homework will not be accepted.