Finance 3310
Business Finance
Fall 2000
Andy Terry
Text: Ross, Westerfield and Jordan, Fundamentals of Corporate Finance, 5th or latest ed. (The Ready Notes are useful)
Required: You will need a pocket calculator with business functions. A TI BAII PLUS has been popular in the past.
Objective: To master the basic tools of business finance, as well as to understand their application in both a national and international context.
Prerequisites: Econ 2310, 2321, 2322, Accounting 2310, 2330. (Econ 2321 and Econ 2322 may be taken concurrently.)
Office hours: T,TH 4:00 - 6:00, or by appointment; ph. 569-8872:
E-Mail: haterry@ualr.edu
(Note: This is a good way to get questions answered that you are
afraid to ask in class.)
Grading: Exams: 80 - 85% to 100%
a) 2 or 3 intra-term exams
b) Project
c) final exam
Note: If you do not take an exam, you will receive a grade of 0 on that exam.
Homework: --- Problem sets will be handed out in class or over the 'net.' Some of these may count for credit. We will see.
Tentative course outline
I. Introduction
a) The corporation & corporate finance
b) Mgmt goals and the agency problem (ethical issues)
c) Financial aspects of a corporation (domestic & international) (ch 1)
d) Financial markets
II. Financial Analysis (ch 2,3,4,18)
a) Basic financial statements
b) Cash flow
c) Ratio analysis
d) Corporate financial planning
e) Discussion of project
III. Time Value of Money (ch 5,6)
IV. Bond Valuation (ch 7)
V. Equity Valuation (ch 8)
Test 1: October 5, 2000
VI. Capital Budgeting - General (ch 9)
VII. Capital budgeting (ch 10, 11)
a) Project cash flows
b) Project analysis
VIII. Risk and Return (ch 12, 13)
a) Risk defined
b) Some historical evidence
c) Efficient markets
c) Diversification and risk-return trade-off
Test 2: November 21 (tentative)
IX. Cost of Capital and Long-Term Financial Policy (ch 14 - 16)
a) Weighted average cost of capital
b) Optimal capital structure
c) Dividend policy
X. Final Exam (comprehensive)
December 14, 1:30 - 3:30
In general, you should try to do
all the self-test problems at the end of the chapters. Specific
other problems will be assigned in class. These problems will be
graded as necessary, and answers will be put on reserve in the
library.
Students with Disabilities. It is the policy of UALR to accommodate students with disabilities, pursuant to federal and state law. Any student with a disability who needs accommodation, for example in seating placement or in arrangements for examinations, should inform the instructor at the beginning of the course. The chair of the department offering this course is also available to assist with accommodations. Students with disabilities are also encouraged to contact the Office of Disability Support Services, which is located in the Donaghey Student Center, Room 103, telephone 569-3143.
Attendance policy: Attendance is highly recommended.
NO CELL PHONES ALLOWED IN CLASS.