SYLLABUS
BSNS 3200
BUSINESS FINANCE
3 CREDIT HOURS
SEMESTER II, 2005-2006
KENT SAUNDERS
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GENERAL INFORMATION
WHEN:
WHERE: Hardacre Hall 247
INSTRUCTOR: Dr. Kent Saunders
OFFICE: Hardacre Hall 216
PHONE: 641-4396
E-MAIL: ktsaunders@anderson.edu
FACULTY HOMEPAGE: http://facultyweb.anderson.edu/~ktsaunders/
COURSE HOMEPAGE: http://webct.anderson.edu
This page provides links to chapter outlines, grades, old exams, and internet sites.
Login: first initial-middle initial-last name Password: AU id
You will need to check your grades on a weekly basis and notify me within one week of any
discrepancies.
OFFICE HOURS: Mondays and Wednesdays
Tuesdays
and Thursdays
Fridays
Also by appointment at other times.
PREREQUISITES: MATH 1300 and ACCT 2010, or instructor's written permission
TEXTBOOKS: Fundamentals
of Financial Management, Concise Fourth Edition, Brigham and
COMPUTATIONAL TOOL: You will need to bring to class a financial calculator. I will be using the HP 10B II financial calculator.
COURSE OBJECTIVES: This course provides an overview of the financial management of the business enterprise,
with an emphasis on ways financial managers create value. Decision-making skills relying on discounted cash flow
techniques, capital budgeting, and the fundamentals of security pricing are presented.
At the completion of this course you should be able to:
Define the agency problem.
Compose a balance sheet and income statement.
Create a financial ratio chart.
Forecast the balance sheet and income statement using the percent of sales method.
Calculate the taxable equivalent yield on a municipal bond.
Calculate the after tax yield on a corporate bond.
Identify the 5 components of a nominal interest rate.
Plot a yield curve.
Calculate the expected return, standard deviation, and coefficient of variation for an individual investment and a
portfolio of investments.
Define beta and be able to estimate beta using time series data.
Draw a timeline to depict a series of cash flows.
Calculate the present value, future value, length to maturity, payment per period, and interest rate per period for a
series of cash flows.
Define an annuity.
Calculate the price of a bond.
Calculate the yield to maturity and the yield to call for a bond.
Describe how changes in interest rates affect bond prices.
Define a call provision.
Estimate the price of a share of stock using the zero growth, constant growth, and supernormal growth models.
Calculate the cost of equity using the capital asset pricing model.
Calculate the after tax cost of debt.
Calculate the cost of preferred stock.
Calculate the cost of retained earnings using the expected rate of return, the required rate of return on stock,
and the bond yield + risk premium methods.
Describe the correct weights of
debt, equity, and preferred stock for a firms optimal capital structure
Calculate the weighted average cost of capital.
Calculate the payback and the discounted payback period.
Calculate the internal rate of return, the modified internal rate of return, and the net present value of an investment.
Identify the relevant cash flows for capital budgeting decisions.
Calculate the initial investment outlay, the operating cash flows, and the terminal year cash flows for a capital
budgeting project.
Additionally, completion of this course should increase your ability to. . .
Communicate in oral and written form.
Work in teams and conduct research.
Whether or not these objectives are met will rely primarily on your own individual effort. I am willing to help in
anyway that I can. Please make use of me as a resource to increase your understanding of business finance.
TEACHING PHILOSOPHY:
I
enjoy teaching and helping people learn. I have experience teaching
introductory classes, advanced undergraduate classes, and graduate classes in
Finance, Economics and Statistics. I find it rewarding to teach at all levels
ranging from the introductory student to the graduate student.
In
my classroom, I try to foster an environment where students feel free to bring
up questions. When students can see how the time value of money, demand/supply
analysis and marginal analysis can be used to address everyday questions, their
interest in financial economics becomes aroused. I have noticed that once
students see how the basic methods of analysis work for them as an individual,
their desire to learn how to apply the tools of financial economics to broader
questions soon follows.
As
part of my teaching method, I use specific, real world examples including
interactive simulation games to bring the tools of financial economic analysis
to life. When students use “hands on” activities to learn the material they can
see the applicability of financial economics in the real world. I make a
conscious effort to present material in a variety of ways. I use small group
activities, student presentations, overhead transparencies, videotapes, the
Internet, computer applications that include Microsoft Excel and PowerPoint,
and guest speakers.
In
terms of student assessment, I try and use a variety of methods. I assess
individual and group work in all of my classes. I have in-class and
outside-of-class assignments that are graded. Outside of class assignments
allow me to assess student’s ability to work in teams, writing ability,
research skills, computer applications, and computational skills. In-class
assignments allow me to assess presentation skills and the ability to work under
pressure.
I make a conscious effort to integrate my Christian faith explicitly in all of my classes. We began each class period by reading and discussing at least one scripture passages. I offer students the opportunity to write a biblical integration essay and read it to the class for extra credit. These exercises also allow student's to share their perspective and make their own connections between their faith and the course content.
In
taking one of my courses, I hope students will develop a new way of looking at
the world. I hope to give them the basic tools that will allow them to
understand opportunities that exist and the consequences of their decisions. I
hope to provide students with a better understanding of how the world works and
how their decision making influences, and is influenced by, surrounding
society.
POLICIES
ATTENDANCE: You are expected to attend each class session. In the event that you miss a class session, it is your responsibility to collect any items handed out in class. Absences can negatively affect grade and generally reduce exam performance.
LATE WORK: In special circumstances you will be allowed to turn in or complete work late. Whether or not you will be permitted to turn in or complete work late will be determined on a case-by-case basis. There is no penalty associated with turning in or completing work early.
CHEATING: Submit work and answers to questions that are your own. Do not copy another person's work on anything that is turned in for an individual grade. Do not plagiarize. Anyone caught cheating on anything that is turned in for an individual grade will receive a double 0 for that assignment and may face disciplinary action.
SYLLABUS CHANGES AND CLASS CANCELLATION: I reserve the right to make changes in this syllabus. If I am fifteen (15) minutes late for a class, the class is officially canceled. You should return the next class period prepared with the material and assignments due for the canceled class as well as prepared for the additional material scheduled on the syllabus.
SPECIAL NEEDS: Students having special problems that might
affect their performance in class should notify me during the first week of
school. Possible arrangements can be made to work with the
EXPECTATIONS
I expect that you
will come to class on time! I expect you to come to each class prepared. I
expect you to have completed the readings prior to class. I expect that if you
have a question or concern related to the class that you would bring it to my
attention.
COURSE CONTENT
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COURSE GRADE: |
Debate Participation |
50 points |
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GRADE CUT-OFFS: |
A |
465-500 |
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C+ |
385-399 |
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Group Project |
50 points |
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A- |
450-464 |
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C |
365-384 |
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Quizzes |
100 points |
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B+ |
435-449 |
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C- |
350-364 |
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Exam One |
100 points |
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B |
415-434 |
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D |
300-349 |
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Exam Two |
100 points |
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B- |
400-414 |
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F |
0-299 |
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Final Exam |
100 points |
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GROUPWORK: The class will be split up into 6 groups. You will get to select your own group. I would encourage
you to develop a sense of joint responsibility and group cohesion. Your group work activities will consist of debates,
a group paper, and a group presentation. Each of these group assignments will be described in more detail below.
DEBATE PARTICIPATION: Each group will defend a position in a debate. Each member of a debating team must obtain at least one outside-of-class source material for your debate (i.e. newspaper article, web site, etc.). Every class member is expected to attend every debate.
The opening round will begin with the “Yes” group speaking for 4 minutes followed by the “No” group for 4 minutes. There will be an 8 minute period where members of the class can ask questions directly related to the opening round. At least one class member from each of the other 4 debate teams who are not debating must ask a question or make a comment in order for that group to receive debate-participation credit. The concluding round will begin with the “Yes” group speaking/rebutting for 3 minutes followed by the “No” group speaking/rebutting for 3 minutes. There will be an 8 minute period where members of the class can ask questions. Again, at least one class member from each of the other 4 debate teams who are not debating must ask a question or make a comment in order for that group to receive debate-participation credit.
Attendance and debate-participation is worth up to 10 points per debate for the non-debating group members. Debating group members can earn up to 30 points for their debate participation in each debate. Debate presentation grades will be determined with class input and will be based on: coverage of the material, creativity, transition of topics and use of visual aids on a group basis and accuracy, knowledge, professionalism, and speaking ability on an individual basis. The course homepage contains a presentation assessment form. Debate-participation makes up 50 points of your overall grade.
Debate A: Group 1 vs. 2 on , Issue: Are CEO's paid too much? Yes: Group 1, No: Group 2
Debate B: Group 3 vs. 4 on , Issue: Should employee stock options be expensed?
Yes: Group 3, No: Group 4
Debate C: Group 5 vs. 6 on , Issue: Is the stock market efficient? Yes: Group 5, No: Group 6
GROUP PROJECT: Each group will study one of the firms in the Dow Jones Industrial Average (DJIA). The course homepage provides a link listing the 30 companies in the DJIA. Each group will be responsible for creating a 5-page (maximum) report detailing the past, present, and future aspects of their firm. The report is to be typed with charts with graphs included when useful and all references cited. A cover page, works cited page, and appendices do not count toward the 5-page maximum. The course homepage provides a link to a document with paper formatting advice.
Each group will be responsible for presenting their report in a 10 minute (maximum) class presentation. The presentation should use state-of-the-art visual aids and should provide the class with an increased understanding of your company. Everyone in the group must participate in the presentation. The course homepage provides a link to the presentation assessment form. The report and presentation should be a seamless unified piece of work that does not appear to be a collection of several independent parts.
Each group should utilize the company's web site, books and articles related to the company, and internet resources with company information (e.g. Yahoo!Finance, Multex Investor) in preparing their report. The course homepage provides a link to internet resources. Each report should address the following areas:
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1) |
A description of your company’s
primary line of business. |
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2) |
Who are the company’s main competitors
and how do they compete with each other. |
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3) |
A ratio chart (similar to Table
________ on page_____ for your company with a comparison between your
company’s ratios and its nearest competitor or industry average and a
comparison of your company's ratios over time. This chart should be created
using Excel. |
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4) |
A 12 month closing price graph
and a table of monthly stock prices for your company and the S&P 500 and
an estimate of beta for your company calculated from this data. This graph
should be created using Excel. |
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5) |
A bond valuation for one of your
company's outstanding bonds (i.e. find the price necessary to earn a
specified yield (e.g. 8%) and compare that price to the current price). |
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6) |
A stock valuation for your
company with a comparison to the actual price (i.e. use one of the three
valuation models to estimate the price of your company’s stock and compare it
to the actual price). |
There are 3 due dates related to the group project. A typed and signed group contract which identifies your group's firm is due on _______. A ratio chart is due on _______. The report is due on the date your group makes its presentation. The presentation date will be either _______ or _______ or _______.
The group will receive a grade that is equally weighted between the report and the presentation. Presentation grades will be determined with class input and will be based on: coverage of the material, creativity, transition of topics and use of visual aids on a group basis and accuracy, knowledge, professionalism, and speaking ability on an individual basis. Report grades will be based on: ability to communicate clearly, accuracy, amount of research done, coherence, coverage of the case, creativity, knowledge of the subject matter, and professionalism. The group case project is worth 50 points toward your overall grade. At the completion of the project each student will complete a performance evaluation for all group members. It is possible that not everyone in the group will get the same score.
QUIZZES: You will have four quizzes throughout the semester. You may bring a financial calculator with you
to the quizzes. Each quiz will be graded on a 25-point scale. Late quizzes will only be given in special circumstances. Your quiz grades as a whole make up 100 points of your overall grade.
EXAMS: You will take two exams and a final exam. Each exam will have a take-home portion and an in-class portion. You may bring one eight-and-a-half-by-eleven inch cheat sheet of paper with you to the in-class portion of the exams. You may bring a financial calculator with you to the in-class portion of the exams. You must take every exam. Each exam is graded on a 100-point scale. Make up exams will only be given in special circumstances. If you get an “A” on an exam you will get an economics trading card!
BIBLE
DAILY SCHEDULE:
Date |
Bible Reader |
Topic |
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1/11 |
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Review syllabus, Top 10 reasons
to know algebra, split into 6 groups |
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1/13 |
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Chapter 1, Class Action and Other
People’s Money film clips |
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1/16 |
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Chapter 2 |
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1/18 |
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Chapter 3 |
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1/20 |
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Top 10 group contract
stipulations, Quiz :Chapter 1-3 |
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1/23 |
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Typed and signed group contracts are due, Chapter 4 |
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1/25 |
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Film: Greed |
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1/27 |
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Debate A: Group 1 vs. 2, pass out take-home portion of Exam 1 |
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1/30 |
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Film: Trillion Dollar Bet |
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2/1 |
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Review
for Exam 1, Top 10 reasons to fail exam |
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2/3 |
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Exam 1: Chapters 1-4 |
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2/6 |
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Review Exam 1, work on group
project |
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2/8 |
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Debate B: Group 3 vs. 4 |
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2/10 |
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Chapter 5 |
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2/13 |
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Group project ratio chart is due, Chapter 6 |
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2/15 |
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No Class: Assessment Day |
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2/17 |
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Chapter 6 |
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2/20 |
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Chapter 6 |
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2/22 |
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Quiz: Chapters 5 and 6 |
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2/24 |
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Chapter 7 |
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2/27 |
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Chapter 7 |
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3/1 |
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Chapter 8 |
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3/3 |
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Chapter
8 |
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3/6 |
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Chapter 8 |
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3/8 |
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Quiz: Chapters 7 and 8,
pass out take-home portion of Exam 2 |
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3/10 |
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Debate C: Group 5 vs. 6 |
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3/13 |
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No Class:
Spring Break
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3/15 |
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No Class: Spring
Break |
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3/17 |
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No Class: Spring
Break |
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3/20 |
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Review for Exam 2 |
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3/22 |
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Exam 2: Chapters 5-8 |
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3/24 |
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Review Exam 2, work on group
project |
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3/27 |
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Group Presentations: Groups 1, 2 |
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3/29 |
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Group Presentations: Groups 3, 4 |
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3/31 |
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Group Presentations: Groups 5, 6 |
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4/3 |
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Chapter 9 |
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4/5 |
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Chapter 9 |
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4/7 |
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Chapter
10 |
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4/10 |
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Chapter
10 |
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4/12 |
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Quiz: Chapter 9 and 10 |
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4/14 |
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No Class: Good Friday |
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4/17 |
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Chapter
11 |
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4/19 |
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Chapter 11 |
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4/21 |
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Chapter 11, pass out take-home
portion of Final Exam |
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4/24 |
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Film/Guest Speaker |
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4/26 |
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Review for Final Exam, Top 10
finance principles, course evaluations |
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4/28 |
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Review for Final Exam |
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5/1 |
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