Course Objective

This course provides students the opportunity to learn the basic financial management tools and concepts. It will provide a general survey of the body of knowledge of corporate finance. We shall not only trace the theoretical developments and empirical evidence, but also discuss the practical implications from the viewpoint of both financial managers and stakeholders. Basic accounting and statistics are essential to understanding the principles developed in this course.

Textbook

Ross, Westerfield, and Jaffe, Corporate Finance, Seventh Edition, McGraw-Hill.

ISBN 0-07-297123-1

Class Attendance and Participation

Class attendance is required. University policy on attendance is applicable. Attendance will be taken periodically during the semester. Students are expected to read the chapters assigned for each session beforehand and to participate in classroom discussions. Journals such as the Wall Street Journal, Financial Times, and BusinessWeek provide excellent articles on various topics related to our class. Students are also encouraged to visit related web sites on the Internet regularly. Students are encouraged to participate in classroom discussions. Class participation accounts for 20% of the total grade.

Homework Assignment and Exams

Homework will be assigned and graded periodically during the semester. Late homework will not be accepted. Quizzes will also be given regularly during the semester. There will be two exams. The midterm exam is temporarily scheduled on March 17 (the first class after the spring break). There will be no make-up exam for the mid-term. Students who cannot take the exam must notify the instructor beforehand. The only acceptable excuses for missing the exam are incapacitating illness and other extreme emergencies. Students who miss the mid-term exam will only need to take the final exam and the final exam will account for 60% in the final grade of this course. The exams will include problem solving and essay-style questions.

Evaluation

The course grade will be calculated based on the following:

                    Midterm Exam                   30%

                             Final Exam                        30%

                             Assignment                       20%

                    Class Participation             20%

                                        Total                                100% 

Tentative Class Schedule

Part I           Overview

          Chapter 1          Introduction to Corporate Finance

Part II Value and Capital Budgeting

          Chapter 4      Net Present Value

          Chapter 5      How to Value Bonds and Stocks

          Chapter 6      Some Alternative Investment Rules

Part III  Risk and Return; Portfolio Analysis, and CAPM

          Chapter 9      Capital Market Theory: An Overview

Chapter 10    Return and Risk: The Capital-Asset-Pricing Model

Part III Capital Structure and Dividend Policy

          Chapter 13          Corporate Financing Decisions and Efficient Capital Markets

Chapter 14    Long-term Financing: An Introduction

Chapter 15    Capital Structure: Basic Concepts

Chapter 16    Capital Structure: Limits to the Use of Debt

Chapter 18          Dividends and Other Payouts

Part IV Long-term Financing

          Chapter 19    Issuing Securities to the Public

Chapter 20    Long-term Debt

Part VI Options

Chapter 22          Options and Corporate Finance: Basic Concepts

Chapter 23          Options and Corporate Finance: Extensions and Applications

Welcome to My Class