Business Scholars: Principles of Finance 351

Syllabus

SHELDON B. LUBAR SCHOOL OF BUSINESS

Lecture 001 TR 9:30-10:45 AM (33012) in Lubar Hall N130 S241
Fall Semester 2011, 3 credits

INSTRUCTOR: Richard D. Marcus, Ph.D.is an Associate Professor of Business and the Chair of the LSB Executive Committee

OFFICE: S430F in Lubar Hall. My mailbox is also on the fourth floor of Lubar Hall

OFFICE HOURS: After our classes on both Tuesdays and Thursdays from 11:00AM - noon in Lubar Hall S430F and by appointment.

TELEPHONE: 229-4103 (office) or 228-7731 (home)

E-MAIL: marcus@uwm.edu

HOMEPAGE: https://pantherfile.uwm.edu/marcus/www/

BUSINESS SCHOLARS: PRINCIPLES OF FINANCE 351: Fundamentals of financial management, analysis of financial statements, risk and return, debt/equity valuations, cost of capital, capital budgeting, capital structure, and dividend policies. Perequistes: jr st; admis to Business Scholars Prog; Econ 103(P) & 104(P); Bus Adm 207(P) & 211(P).

TEXTBOOK: Ross, Westerfield, and Jordan, Fundamentals of Corporate Finance, 9th Ed.(Standard Edition), ISBN 0-07-338239-6, McGraw-Hill, 2010 (Required). A new book is $223.65. A used book costs $154.30 at the UWM Bookstore. Althernatively, a Coursesmart e-Textbook of Fundamentals of Corporate Finance, 9th Ed.(Standard Edition), is available for $117. Visit http://www.coursesmart.com/0077296494 for the e-Textbook which is searchable and printable. There is a 3-week trial period with the e-Textbook.

NOTE: There are two versions of this book. The Standard Version that we use has 21 chapters. The publisher also has a longer version called the Alternative Edition that includes more chapters. The same authors have a lower level of the book with a slightly different title: Essentials of Corporate Finance, which I use in Principles of Finance 350. Business Scholars use the more advanced book.

FINANCIAL CALCULATOR: You will need a financial calculator of your own choosing. My recommendation is Texas Instruments BAII Plus, or the professional version. Either are fine with me.

EXAMINATION AND HOMEWORK WEIGHTS: There will be one midterm examination and one final. Each exam is worth 40% of the class. We will also have ten homework assignments that will constitute 20% of the points.

MIDTERM EXAM: The midterm for 351 is on Tuesday, October 25. 2011. This exam covers mateial from Chapter 1-12 and lecture material.

FINAL EXAM: The final for 351 on Monday, December 19, 2011 at 10:00 to noon in our classroom.. This exam covers primarily Chapters 13-21 and classroom material.

GRADES: Grades will be based on the total points earned on the midterm, final, homework manager, and attendance at special events. There are no "extra credit" points available. Typically, students who amass points at (or above) the median score will be considered for earning an A or A-. Those who are in the lower half will be considered for B+ and B, however, it is possible to earn much lower grades for those who do not demonstrate an understanding of the key objectives of corporate finance. Scores will be posted on Desire2Learn at: http://d2l.uwm.edu/.

CLASSROOM POLICIES: UWM has long-standing policies on academic misconduct, sexual harassment, discrimination, adding, dropping, withdrawal, repeating classes, and changes of grade. These policies are available at: https://pantherfile.uwm.edu/marcus/www/policies.html.

SPECIAL NEEDS: If anyone has a need for note-taking or testing assistance, please feel free to discuss this with me early in the semester. Slide presentations are available weekly in class and will be available on D2L.

SOCIAL CONNECTIVITY: Financial annoucements of stock splits, leverage buyouts, and dividend changes occur daily. Some will be highlighted for special attention. These can appear on Facebook walls or as text messages using Twitter. Students will be invited to like a fan page that will be used for both 350 students and 351 students called UWMFinance350 or the same name in Twitter. Links to these locations will be added to the D2L site for our class.

OBJECTIVE: To understand the everyday financial activities of collecting from customers and paying suppliers, finding long-term financing to pay for investments, and deciding which investments offer the greatest promise. These are issues sometimes called Financial Management, but are part of the duties of a financial manager. Financial managers who do these tasks well reduce the risk of financial distress and increase the opportunities for growth and profits.


Daily Schedule of Lectures and Discussion Sections

Labor Day is Monday, September 5: The university is closed.

Lecture #1 on Tuesday, September 6: Chapter 1- Introduction to Corporate Finance

Lecture #2 is on Thursday, September 8: Chapter 2 - Financial Statements, Taxes, and Cash Flows. Homework #1 distributed.

Lecture #3 on Tuesday, September 13: Chapter 3 - Working with Financial Statements (with an emphasis on Ratio Analysis). Homework #1 is due.

Lecture #4 on Thursday, September 15 Chapter 4 - Long-Term Financial Planning and Growth. Homework #2 distributed.

Lecture #5 on Tuesday, September 20: Chapter 5 - Introduction to Valuation and Chapter 6 - Discounted Cash Flow Valuation. Homework #2 is due.

Lecture #6 on Thursday, September 22: Chapter 7 - Interest Rates and Bond Valuation. Homework #3 is distributed.

Lecture #7 on Tuesday, September 27: Chapter 8 - Stock Valuation (with an emphasis on the dividend discount model). Homework #3 is due.

Class #8 on Thursday, September 29 in Finance Lab: Field Trip to the David Nicholas Finance Lab and use of FactSet. Homework #4 is distributed which is a finance project using FactSet in the lab.

Lecture #9 on Tuesday, October 4: Chapter 9 - Net Present Value and Other Investement Criteria. Homework #4 (the lab project) is due.

Lecture #10 on Thursday, October 6: Chapter 10 - Making Capital Investment Decisions. Homework #5 is distributed.

Lecture #11 will be for the class to attend the Marcus Corporation Annual Stockholders Meeting. On Tuesday, October 11, 2011, UWM buses will take us to the the Intercontinental Hotel in Milwaukee, leaving at 8:30 AM for the 10AM meeting (preceded by a reception). We will leave at 11:30 pm and be back on campus by noon. The University will provide transportation to the event and back at the end of the meeting to Lubar Hall central driveway.
Lecture #12 on Thursday, October 13 will be a Q&A discussion with Douglas Neis, the CFO and Treasurer of the Marcus Corporation in our classroom.

Lecture #13 on Tuesday, October 18: Chapter 11 - Project Evaluation and Analysis. Homework #5 is due.

Lecture #14 on Thursday, October 20: Chapter 12 - Some Lessons From Capital Market History. Also a review for Midterm #1. A list of some key formulas will be handed out and will be attached to the midterm given on October 25.

Class #15 on Tuesday, October 25 is our Midterm,  which covers Chapters 1 - 12 and lecture material.


Lecture #16 on Thursday, October 27: Chapter 13 - Return, Risk, and the Security Market Line. Homework #6 is distributed.

Lecture #17 on Tuesday, November 1: Is a stock really just an option? An introduction to options and contingent claims. Homework #6 is due.

Lecture #18 on Thursday, November 3: Chapter 14 - The Cost of Capital. Homework #7 is distributed.

Lecture #19 on Tuesday, November 8: Chapter 15 - Raising Capital. Homework #7 is due.

Lecture #20 on Thursday, November 10: Chapter 16 - Financial Leverage and Capital Structure Policy.

Lecture #21 on Tuesday, November 15: Chapter 17 - Dividends and Dividend Policy. Homework #8 is distributed.

Lecture #22 on Thursday, November 17: Chapter 18 - Short-Term Finance and Planning. Homework #8 is due.

Lecture #23 on Tuesday, November 22: Chapter 19 - Cash and Liquidity Management (skip Appendix 20A). Homework #9 is distrbuted.

Thanksgiving is on Thursday, November 24 - School is Closed for both Wednesday and Thursday classes. This is a good time to feast on turkey, catch up on skipped chapters in in your textbooks, or to watch some football.

Lecture #24 on Tuesday, November 29: Chapter 20 - Credit and Inventory Management. Homework #9 is due.

Lecture #25 on Thursday, December 1: Chapter 21: International Corporate Finance. Homework #10 is distributed.

Lecture #26 on Tuesday, December 6: Time Diversification and the Declining Value of International Diversification in a Global Economy

Lecture #27 on Thursday, December 8: Event Study Basics in Finance. Homework #10 is due.

Lecture #28 on Tuesday, December 13: Initial Public Offerings and Review for the final. Primarily Chapters 13-21 and classroom material. A list of key formulas will be distributed and will be attached to the final.

December 15: This the University Study Day - No classes.

Finals Week is December 16-22.

Final Exam on Monday, December 19, 2011 at 10:00 to noon in our classroom. Scores and grades will be posted on D2L at http://d2l.uwm.edu/.