Financial Management FIN 5213
Tentative Schedule
Spring 2014
INSTRUCTOR CONTACT INFORMATION:
Instructor: Dr. Larry J. Prather, John Massey Endowed Chair and Professor of Finance
Office Location: JMSB Russell Bld. Room 205
Email Address: or
Office Phone # (580) 745-2566 or (580) 9161-2779 (cell).
Fax # (580) 745-7485.
Office Hours: Monday 4:00-5:00, Tuesday 7:30-8:00 & 9:15-12:30, Wednesday 7:30-12:00, Thursday 7:15-8:00
COURSE TITLE: Financial Management
CATALOG DESCRIPTION: This course covers the theory and practice of managers making financial decisions for the firm. The basis for all decisions builds from the premise of maximizing shareholder wealth. Topics include risk and return tradeoffs, valuing stock and bonds, evaluating choices among sources of capital and capital structure, evaluating dividend policy, evaluating and selecting expansion projects, using derivative securities to manage risk, firm valuation, and short-term cash management.
PREREQUISITES: FIN 3113 and BUS 2633
REQUIRED MATERIALS:
(1) Brigham, Eugene F. and Michael C. Ehrhardt. Financial Management: Theory and Practice, 13th Edition, Thompson Southwestern, 2011. ISBN: 1-4390-7809-2.
(2) A financial calculator capable of calculating internal rates of return (I recommend a TI BAII Plus).
OPTIONAL MATERIALS: Study Guide to Accompany Financial Management: Theory and Practice, 13th Edition, Thompson Southwestern, 2011.
TECHNICAL REQUIREMENTS: Available through the Southeastern Online Learning website or http://www.se.edu/online-learning/technology/hardware-software-requirements/
NETIQUETTE (INTERNET ETIQUETTE): Available through the Southeastern Online Learning website or http://www.se.edu/online-learning/technology/communication-netiquette/
LIBRARY AND INFORMATION RESOURCES: Available through the Southeastern Online Learning website or http://www.se.edu/online-learning/student-services/
OTHER RESOURCES AND LOCATION: None
COURSE OBJECTIVES:
The following objectives will be met in this class:
Objective / Exceeds Expectations / Meets Expectations / Acceptable / Unacceptable4 / 3 / 2 / 1
Explain the underlying goal of financial managers.
Meets the JMSB goal of critical and ethical thinking. / Shows full understanding of the underlying goal of financial managers. / Shows nearly complete understanding of the underlying goal of financial managers. / Shows good understanding of the underlying goal of financial managers. / Shows little or no understanding of the underlying goal of financial managers.
Properly use the risk-return relationship in assessing business opportunities.
Meets the JMSB goal of analysis. / Shows full understanding of the risk-return relationship and can properly assess business opportunities with no computational error. / Shows nearly complete understanding of the risk-return relationship and can properly assess business opportunities with few or minor computational errors. / Shows some understanding of the risk-return relationship and can properly assess business opportunities but makes computational errors. / Shows little or no understanding of the risk-return relationship and cannot properly assess business opportunities without significant errors.
Compute relevant cash flow and solve complex capital budgeting problems.
Meets the JMSB goal of analysis. / Shows full understanding of computing relevant cash flows and can solve complex capital budgeting problems with no computational error. / Shows nearly complete understanding of computing relevant cash flows and can solve complex capital budgeting problems with few or minor computational errors. / Shows good understanding of computing relevant cash flows and can solve complex capital budgeting problems but makes computational errors. / Shows little or no understanding of computing relevant cash flows and cannot solve complex capital budgeting problems without significant errors.
Evaluate a firm’s working capital management.
Meets the JMSB goal of analysis. / Shows full understanding of evaluating a firm’s working capital management with no computational error. / Shows nearly complete understanding of evaluating a firm’s working capital management with few or minor computational errors. / Shows good understanding of evaluating a firm’s working capital management but makes computational errors. / Shows little or no understanding of evaluating a firm’s working capital management and cannot make an evaluation without making significant errors.
Forecast pro forma financial statements.
Meets the JMSB goal of analysis. / Shows full understanding of forecasting pro forma financial statements and can forecast with no computational error. / Shows nearly complete understanding of forecasting pro forma financial statements and can forecast with few or minor computational errors. / Shows some understanding of forecasting pro forma financial statements but makes computational errors. / Shows little or no understanding of forecasting pro forma financial statements and cannot make a forecast without making significant errors.
Evaluate a firm’s capital structure.
Meets the JMSB goal of analysis. / Shows full understanding of evaluating a firm’s capital structure and can evaluate with no computational error. / Shows nearly complete understanding of evaluating a firm’s capital structure and can evaluate with few or minor computational errors. / Shows some understanding of evaluating a firm’s capital structure but makes computational errors. / Shows little or no understanding of evaluating a firm’s capital structure and cannot make an evaluation without making significant errors.
Evaluate a firm’s dividend policy.
Meets the JMSB goal of analysis. / Shows full understanding of evaluating a firm’s dividend policy and can evaluate with no computational error. / Shows nearly complete understanding of evaluating a firm’s dividend policy and can evaluate with few or minor computational errors. / Shows some understanding of evaluating a firm’s dividend policy but makes computational errors. / Shows little or no understanding of evaluating a firm’s dividend policy structure and cannot make an evaluation without making significant errors.
Value a firm and a firm’s stock.
Meets the JMSB goal of analysis. / Shows full understanding of valuing a firm and a firm’s stock and can compute value with no computational error. / Shows nearly complete understanding of valuing a firm and a firm’s stock and can compute value with few or minor computational errors. / Shows some understanding of valuing a firm and a firm’s stock and can compute value but makes computational errors. / Shows little or no understanding of valuing a firm and a firm’s stock and cannot compute value without making significant errors.
Use derivative assets to reduce risk.
Meets the JMSB goal of critical and
ethical thinking. / Shows full understanding of using derivative assets to reduce risk and can hedge with no computational error. / Shows nearly complete understanding of using derivative assets to reduce risk and can hedge with few or minor computational errors. / Shows some understanding of using derivative assets to reduce risk and can hedge but makes computational errors. / Shows little or no understanding of using derivative assets to reduce risk but cannot hedge without making significant errors.
ALIGNMENT OF OBJECTIVES WITH LOCAL, STATE, AND OR NATIONAL STANDARDS: NA.
COURSE SCHEDULE:
Agenda: The following is the planned schedule for the course.
Week / Chapter(s) / Topic1 / 1, 2, 3 / An Overview of Financial Management and the Financial Environment; Financial Statements, Cash flows, and Taxes; Analysis of Financial Statements
2 / 4, 6, 24 / Time Value of Money; Risk, Return, and the Capital Asset Pricing Model; Portfolio Theory, Asset Pricing Models, and Behavioral finance
3 / 5, 7, 9 / Bonds, Bond Valuation and Interest Rates; Stocks, Stock
Valuation, and Stock Market Equilibrium; The Cost of Capital
4 / 10, 11 / The Basics of Capital Budgeting: Evaluating Cash Flows; Cash Flow Estimation and Risk Analysis (EXAM #1 on chapter 1-7 plus 24).
5 / 12, 13 / Financial Planning and Forecasting Financial Statements; Corporate Valuation, Value-Based Management, and Corporate Governance
6 / 15, 14 / Capital Structure Decisions; Distributions to Shareholders: Dividends and Repurchases; (EXAM #2 on chapters 9-13).
7 / 8, 23, & 5 (Madura) / Financial Options and Applications in Corporate Finance (pages 305-310) and Section 8.7; Derivatives and Risk Management; Currency Derivatives (Madura, Jeff. International Financial Management, 8th Edition, Southwestern Publishing Company, 2006 Chapter 5
8 / 16 / Working Capital Management, Final Exam Chapters 8, 14, 15, 16, 23, & 5 Madura.
Home Work Assignments: Read the chapters listed in the syllabus and work the problems assigned below. Answers to homework are posted to Blackboard! If you have questions, post them to BlackBoard to start a threaded discussion. That will enable other students to answer your questions and generate a threaded discussion for class interaction. I will monitor the discussion at least once per day (Monday through Friday). Once you have completed your study of a chapter, I have created self-assessment tests in BlackBoard for each chapter. They can be taken multiple time and are similar to the exams for the course. If you can answer the homework and self assessment questions, you should do well on the exams. The opposite is also true!
Students should review materials from basic statistics courses and be comfortable computing means, variances, and standard deviations.
Suggested Homework:
Week / Chapter(s) / Questions/Problems1 / 1, 2, & 3 / Chapter 1 Questions 1-1 through 1-9
Chapter 2 Questions 2-1 through 2-8, Problems 2-1 through 2-7, 2-10, and 2-12.
Chapter 3 Questions 3-1 through 3-6, Problems 3-1 through 3-7, 3-10, and 3-13.
2 / 4, 6, & 24 / Chapter 4 Questions 4-1 through 4-5, Problems 4-1 through 4-8, 4-11 through 4-14, 4-19 through 4-21, 4-25 through 4-273-6, and 3-13.
Chapter 6 Questions 6-1 through 6-7, Problems 6-1 through
6-13.
Chapter 24 Questions 24-1 and 24-2, Problems 24-1 and
24-4.
3 / 5, 7, & 9 / Chapter 5 Questions 5-1through 5-5, Problems 5-1 through
5-13 and 5-16 through 5-17.
Chapter 7 Questions 7-1 through 7-4, Problems 7-1 through
7-12, and 7-19.
Chapter 9 Questions 9-1 through 9-5, Problems 9-1 through
9-17.
4 / 10 & 11 / Chapter 10 Questions 10-1 through 10-6, Problems 10-1 through 10-18, 10-21 and 10-22.
Chapter 11 Questions 11-1 through 11-11, Problems 11-1 through 11-12.
5 / 12 & 13 / Chapter 12 Questions 12-1 through 12-6, Problems 12-1, 12-2, 12-4 through 12-6.
Chapter 13 Questions 13-1 through 13-5, Problems 13-1 through 13-3, 13-8, and 13-9.
6 / 15 &14 / Chapter 15 Questions 15-1 through 15-8, Problems 15-1 through 15-6, 15-8 and 15-9.
Chapter 14 Questions 14-1 through 14-5, Problems 14-1 through 14-7 and 14-9.
7 / 8, 23, 5 (Madura) / Chapter 8 Questions 8-1 through 8-3, Problems 8-1 through 8-2.
Chapter 23 Questions 23-1 through 23-6, Problems 23-1 and 23-2.
Chapter 5 Madura Questions 1-16.
8 / 16 / Chapter 16 Questions 16-1 through 16-9, Problems 16-1 through 16-8 and 16-11 through 16-15.
Exam Schedule
Exam # / Chapters Covered / Dates/Times Available1 / Chapters 1 -7 & 24 / Exam open from April 7, 2014 4pm until April 9, 2014 7pm
2 / Chapters 9-13 / Exam open from April 21, 2014 4pm until April 23, 2014 7pm
Final Exam / Chapters 8, 14-16, 23, and Madura 5 / Exam open from May 7, 20148:00 am until May 9, 2014 5pm.
SEMESTER CALENDAR:
Date / EventMarch 10, 2014 / Classes Begin
March 12, 2014 / Last day to drop with a refund and no grade record.
March 17-21, 2014 / Spring Break
April 11, 2014 / Last Day To Drop with a automatic “W”
April 18, 2014 / Easter Holiday
April 26, 2014 / Last Day To Drop
May 9, 2014 / Last day of class
COURSE POLICIES:
Attendance: All students are expected to log into BlackBoard on a daily basis and participate in threaded discussions. Participation in these discussions will count toward your final course grade.
Collaboration: Students are allowed, in fact encouraged, to collaborate on homework. This can often crystallize important information. I expect students to use the communications area of BlackBoard to pose questions to other students before contacting me. I will monitor that threaded discussion and guide it as required to create student interaction and ensure correct information is shared. However, no collaboration is allowed during written exams (see the Academic Code of Conduct).
Late Assignments: A grade of zero will be assigned for any assignments not turned in on schedule or for missing an exam. No extra assignments will be given at any time during the semester to “bring up your grade!” Work diligently from the beginning and complete every assignment as if IT is worth extra points that will raise your grade!
Except for extenuating circumstances handled by the instructor on an individual basis, any assignment received after the due date and time will be a zero. For the record…there are very few extenuating circumstances. Excuses such as “The system was down” and “I couldn’t get to a computer” are NOT considered extenuating circumstances. Have a backup plan with at least one alternate location to complete the assignment or take the exam. Don’t wait until the last minute to complete assignments or take exams and you won’t encounter these types of problems.
Makeup Exams: Make-up examinations will be allowed only under extremely unusual circumstances. If illness, injury, or serious personal problems arise contact me immediately. Requests for make up exams must be made in writing (formal letter) and explain the circumstances surrounding the request. Proper documentation must accompany the request (i.e., attending physician, supervisor, etc.).
Expectations of Instructor and Students:
Student Expectations of Instructor – Students should expect a timely response to email questions and prompt grading and posting of assignments. If you send an email, I will typically respond within 24 hours (during the workweek). However, I prefer that you call me! Use my home phone number if I am not in my office! I find that I am usually more able to help you when we can speak on the phone or face to face.
Unless an announcement was posted indicating my lack of availability, you should receive a response to your email within 24 hour (except weekends and holidays). If you haven’t received a response within 24 hours, please email again just in case I overlooked it. Grading of and posting of scores for all assignments will be completed before the next assignment is due.
Instructor Expectations of Students: All students are required to produce their own work unless the activity has been designed as a group project. Evidence of cheating will result in at least a zero for that activity. Students are expected to complete all assignments by the due date, attend all face-to-face meetings, participate in class discussions, and when difficulties arise, contact the instructor.
Other Course Policies: The instructor reserves the right to make adjustments to the syllabus and/or grading policy as needed in order to meet the instructional needs and goals of the class. Students will be notified of any adjustments to the syllabus.