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COURSE NAME: "Finance "
SEMESTER & YEAR: Fall 2018

INSTRUCTOR: Manzur Rahman
EMAIL: [email protected]
HOURS: TTH 10:00-11:15 AM
PREREQUISITES: Prerequisites: FIN 201, FIN 202, EC 202, MA 208

This course examines both the theoretical and applied foundations required to make decisions in financial management. The main areas covered include an  overview of the financial system and the efficiency of capital markets, evaluation of financial performance, time value of money, analysis of risk and return, basic portfolio theory, valuation of stocks and bonds, capital budgeting, international financial management, capital structure management, and the CFA Institute Code of Ethics and Standards of Professional Conduct.
The course topics include financial statement analysis, time value of money, stock and bond valuation, risk and return (CAPM), capital budgeting, cost of capital and options. 

·      Review financial markets and learn the legal types of businesses, the role of financial managers and ethical responsibility.

·      Understand the measurement of cash flow and its central role in financial analysis

·      Learn how to evaluate firms using ratio analysis and the statement of cash flows 

·      Learn time value of money concepts and their application to financial problems

·      Learn how to value bonds and understand yield to maturity and yield curves.

·      Understand how to value stocks using the dividend growth model

·      Learn capital budgeting concepts – NPV, IRR, Profitability index and their applications

·      Review capital market history, understand the risk-return relationship (the CAPM) and the efficient markets hypothesis

·      Determine the weighted average cost of capital for a firm

·      Learn about the factors that determine the value of call and put options, and derive option profit/loss diagrams

·      Understand the importance of ethical issues in finance

Book TitleAuthorPublisherISBN numberLibrary Call NumberComments
Fundamentals of Corporate Finance, 11eMcGrawHill-IrwinMcGrawHill-Irwin978-0-07-786170-4 Note that the called out chapter page numbers and suggested questions and problems from the textbook are based the 11th edition.

Exam 1Chapters 1-321%
Exam 2Chapters 5-821%
Exam 3Chapters 9, 10 & 1221%
FinalChapters 13, 14, 21 & 2422%
Excel AssignmentsTo be assigned in class15%

AWork of this quality directly addresses the question or problem raised and provides a coherent argument displaying an extensive knowledge of relevant information or content. This type of work demonstrates the ability to critically evaluate concepts and theory and has an element of novelty and originality. There is clear evidence of a significant amount of reading beyond that required for the course. 90-92.9: A-; 93-100: A
BThis is highly competent level of performance and directly addresses the question or problem raised.There is a demonstration of some ability to critically evaluatetheory and concepts and relate them to practice. Discussions reflect the student’s own arguments and are not simply a repetition of standard lecture andreference material. The work does not suffer from any major errors or omissions and provides evidence of reading beyond the required assignments. 80-82.9: B-; 83-86.9: B; 87-89.9: B+
CThis is an acceptable level of performance and provides answers that are clear but limited, reflecting the information offered in the lectures and reference readings. 70-72.9: B-; 73-76.9: B; 77-79.9: B+
DThis level of performances demonstrates that the student lacks a coherent grasp of the material.Important information is omitted and irrelevant points included.In effect, the student has barely done enough to persuade the instructor that s/he should not fail. 60-66.9:D; 67-69.9: D+
FThis work fails to show any knowledge or understanding of the issues raised in the question. Most of the material in the answer is irrelevant. Below 60

Please check the examination dates carefully. You cannot make-up a major exam (midterm or final) without the permission of the Dean’s Office. The Dean’s Office will grant such permission only when the absence was caused by a serious impediment, such as a documented illness, hospitalization or death in the immediate family (in which you must attend the funeral) or other situations of similar gravity. If granted permission, a single, comprehensive make-up exam will be given at the end of the semester. Absences due to other meaningful conflicts, such as job interviews, family celebrations, travel difficulties, student misunderstandings or personal convenience, will not be excused. Students who will be absent from a major exam must notify the Dean’s Office prior to that exam. Absences from class due to the observance of a religious holiday will normally be excused. Individual students who will have to miss class to observe a religious holiday should notify the instructor by the end of the Add/Drop period to make prior arrangements for making up any work that will be missed. The final exam period runs until December 14.

Students must bring (and use) a financial calculator to class. During class no electronic devices are allowed unless there is a specific project we are working on which will be indicated by the instructor.   Cell phones and other electronic devices may not be used during an exam.  No eating in class.
As stated in the university catalog, any student who commits an act of academic dishonesty will receive a failing grade on the work in which the dishonesty occurred. In addition, acts of academic dishonesty, irrespective of the weight of the assignment, may result in the student receiving a failing grade in the course. Instances of academic dishonesty will be reported to the Dean of Academic Affairs. A student who is reported twice for academic dishonesty is subject to summary dismissal from the University. In such a case, the Academic Council will then make a recommendation to the President, who will make the final decision.
John Cabot University does not discriminate on the basis of disability or handicap. Students with approved accommodations must inform their professors at the beginning of the term. Please see the website for the complete policy.


Tentative Class Schedule

Chapter Problems

Ch.  1: Introduction to Corporate Finance CR:  3, 4, 6, 7, 8, 9, 12, 13, 14

Ch.  2: Financial Statements, Taxes & Cash Flow QP:  1 through 14, 16, 18, 19, 21, 22, 24
            (also, add Section 10.5, pp. 329-331)
Ch.  3: Working with Financial Statements CR: 1 through 10
        QP: 1 through 9, 11, 12, 17, 18, 19, 21, 24, 26

First Mid-Term - Friday, September 21

Ch.  5: Introduction to Valuation: Time Value of Money QP: 1 through 15, 19
  (QP Excel assignment to be submitted)
Ch.  6: Discounted Cash Flow Valuation CR: 3, 4, 5
QP: 1 through 6, 9 through 14, 24, 26, 27, 28, 36, 47, 49
                                                                 (QP Excel assignment to be submitted)

Ch.  7: Interest Rates and Bond Valuation QP: 1 through 8, 10 through 16, 20, 22, 25, 29(a,b)
(QP Excel assignment to be submitted)
Ch.  8: Stock Valuation         CR: 1, 2, 3, 4, 6
            (skip pp. 256-259)                               QP: 1, 2, 5, 6, 8, 9, 15, 18, 20, 23

Second Mid-Term – Thursday, October 18

Ch.  9: Net Present Value                               QP: 1,3,5,7 through 11, 12(a,b), 14(a), 15, 16, 17 
                                                                 (QP Excel assignment to be submitted)   

Ch. 10:   Making Capital Investment Decisions QP: 1 through 15 (a, b)
            (skip Section 10.6, pp. 331-337)                 (QP Excel assignment to be submitted)

Ch. 12: Some Lessons from Capital Market History QP: 1 through 9
                (skip pp. 404 - 407)

Third Mid-Term -  Tuesday, November 13

Ch. 13: Return, Risk and the Security Market Line QP: 1,2,3,4,7,11 through 16, 20(a,b,c), 24 
            (skip Section 13.3, pp. 428-429)

Ch. 14: Cost of Capital (skip pp. 480 – 481)         QP: 1, 2, 5, 6, 7, 9,10,11,12, 15, 16, 18,19, 20

Ch. 21: International Corporate Finance

Ch  24: Options and Corporate Finance CR: 1, 3, 4, 15; QP: 2(a,b), 3(a-c)
            (Read pp. 790-796, and Section 24.4 pp. 804-807)

Final Exam: Monday, December 10, Noon - 1:30 p.m.