ACCOUNTING AND FINANCE DIVISION
COURSE OUTLINE; SPRING 2008
COURSE TITLE: FI 301: PRINCIPLES OF FINANCE
FACILITATOR: Benedict A. Udemgba, Ph.D.
OFFICES: Alice Tanner Room #107 & MBA Building #115
TELEPHONE: (601)
877-2422/6450 or 304-4382
E-mail:
budemgba@alcorn.edu
OFFICE HOURS: T & R. 8:30-9:30 am; & 12:30-2:00 pm. Others: by appointment only.
TEXT: Fundamentals of Corporate Finance: 8th Edition by Ross, Westerfield, and Jordan; McGraw-Hill & Irwin Publishing.
Ownership of the text is a must for every Student.
1. Study Guide to accompany the text (optional),
2. Calculator (a must), Texas Instrument’s BA II Plus.
COURSE DESCRIPTION:
This course is a survey of whole field of finance. The problems associated with sources, the uses of financing, and the tools of financial analysis are also included. Students will be introduced to capital budgeting decisions making; financial investment decisions making; the funding or real capital investment; and the money and capital markets.
OBJECTIVE:
The goal of this course is to introduce students to the world of finance by covering financial management topics including the following:
a. Time value of money
b. Financial Statements and ratios analysis
c. Risk and return
d. Asset (Stock and bond) valuation
e. Capital budgeting and Capital Structure
f. Hybrid Financing and Dividend policy
g. Short-term financial planning and cash management
h. Brief introduction to Derivatives
EXPECTED OUTCOME:
1. Demonstrate knowledge of the principles of Time Value of Money
2. Students should be able to disseminate information from all four financial statements, and compute and interpret financial ratios.
3 Understand the relationship between risk and return, compute return and various measures of risk for individual stocks and/or portfolios.
4. Must be able to find the theoretical price of assets (stocks and bonds) as a part of valuation process and know the impact of interest rate changes on value.
5. Know various methods (NPV, IRR, payback and MIRR) of evaluating capital projects, and use these along with determining the NCF of a project, to determine whether to accept or reject a project.
6. Be able to determine the cost of capital for short and long-term projects, draw MCC and IOS schedules and determine the best opportunities available to a firm given capital constraints. Know how to evaluate a lease versus a buy decision.
7. Must be able to demonstrate knowledge of types of short-term credit, cost of not taking cash discount, different types of secured short-term credit, including accounts receivable financing and inventory, and finding effective annual interest rate with/without commitment fee.
8. Have a basic knowledge of futures, and options and know how the firms distribute income to shareholders especially through dividends.
ASSESSMENT OF LEARNING OBJECTIVES:
The objectives of each chapter are tabulated at the beginning of each chapter. After the completion of each chapter students must demonstrate their understanding of the chapter content by answering test questions based on the learning objectives with seventy percent accuracy.
Instructional Methodology:
1. Lectures: General overview of each chapter will be given by the instructor and Students are urged to read every chapter prior to the instructor's lecture to enhance understanding of the chapter's subject matter and their classroom participation.
2. Illustrations and Examples: Exercises and problems relevant to every chapter's subject matter will be solved in the class by the instructor to better the student's comprehension of each chapter's subject matter.
Course Activities
1. Problem/Exercise Solving: Students will be given an impromptu problem and/or exercise to solve in the classroom for grade.
2. Homework assignment: Students will be assigned some exercises or problems or a combination of both to complete at home for practice and for their betterment at the end of every chapter.
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Each student will be expected to actively participate in class discussion.
Course Requirements:
1. Attendance required for every student, students will be penalized severely for continued unexcused absences. Penalties for absences are as follows:
0 - 3 absences = None, 4 - 10 drop l-2 letter grades, 25% absentees grade “F”
2. Meaningful class participation is required of every student.
3. Tardiness will not be tolerated under any circumstance.
4. Every student is required to come to every meeting prepared by reading material(s) to be covered ahead of the instructor's lecture. Follow the course contents as outlined in this syllabus in this regard.
Evaluation Procedures: Grade Percentage
Homework and Class participation 10%
Group assessments and Quizzes 10%
Examinations (in class) 80%
Total Points and Percentage 100%
* No late homework and assignment will be accepted. No make-up on pop quiz will be given under any circumstance. No make-up test or examination, except in an extra-ordinary circumstance proven to be beyond the student's control as evidenced by a bonafide statement from appropriate authority as required by the instructor. Failure to take any quiz, test, examination, or turn in homework/assignment as scheduled will result in a zero (0) grade for the missed pop quiz, test, examination or homework/assignment. The zero (0) grade rule also applies to any form of academic dishonesty.
All academic regulations and procedures for students as outline by University will be adhered to. A letter grade computed on the average of all pop quizzes, test, examinations, homework/assignments/presentations and attendance will be assigned using the following scale:
A 90-100 % = A, 80- 89 % = B, 70- 79 % = C, 60- 69 % = D, Below 60 % = F.
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TENTATIVE CLASS COVERAGE
Weeks/ Days: Chapters: Topics:
Week #1 1 Introduction to Corporate Finance
#2 2 Financial Statements, Taxes, and Cash flow
#3 3 Working with financial statements
#4 First Examination.
Week #4 4 Long-term financial Planning and Growth
#5 5 Valuation and The Time Value of Money
#6 6 Discounted Cash Flow Valuation
#7 Second Examinations
#7 Second Examinations
Week #7 7 & 8 Interest Rates, Bonds, and Stocks Valuations
#8 9 Net Present Value and Investment Criteria
#9 10 Making Capital Investment Decisions
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#10 Third Examination
Week #10 11 Project Analysis and Evaluation
#11 13, 14 Return, Risk, Security Market, and Options
#12 19, 20 Short-Term Finance, Cash and Liquidity
Management
#13 Fourth Examination
Week #14 21, 15 International Finance and Cost of Capital
#15 16, 18 Raising Capital, Dividends and Dividend Policy
# 15 Fifth Examination
The instructor reserves the right to amend this syllabus when deemed necessary. Also, check the instructor’s Webpage for announcements.
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