Corporation Finance - FOMGT 301, Spring 2004

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1 Corporation Finance - FOMGT 301, Spring 2004 Tuesdays and Thursdays 9:30 10:45 ISOM 137 (Flavin Auditorium) Course website: Instructor: Andrew Hall andrew.d.hall@verizon.net Or Office Hours: Wed 11:30 to 13:00 AND Tue 11:00 to 12:00 Location: In the Atrium Area of the School of Management. OR By Appointment: Wed before 11:30 - To make an appointment - by latest 8:00 on Tue) Thu 11:00 to 12:00 - Let me know if you want to see me by the end of class on Thu. Course Objectives FOMGT 301 has two main objectives: 1. to demonstrate the role of financial management within the corporation and 2. to acquaint the student with the tools and terms of finance. Class time will be spent mostly on introducing and then applying the topics. Students will be encouraged to spend a considerable amount of time outside class reading the text and solving problems. The formal course prerequisites are the core freshman and sophomore ISOM classes (e.g. micro and macro economics, statistics, business computing, and accounting). You must also have a working knowledge of algebra. Course Web Site The web site will list all announcements, provide a summary of what to expect in each class, and will be used to deliver what are typically considered to be class handouts. For example, all Excel Spreadsheets that are used in class will be available on the web site, and all solutions to problems in the text are available on the web site. You should get 2003 Andrew Hall. FOMGT 301 Corporation Finance Syllabus and Policies Page 1

2 into the habit of checking the site at least twice a week in order to keep current in the class. Create a bookmark or add it to your favorites. will be a very important means of communication. My best address is andrew.d.hall@verizon.net and I also look at adhall@som.umass.edu. If you filter SPAM and have a list of acceptable addresses, please add my two addresses to your list. I filter SPAM using a list of addresses and I will filter s with "FOMGT301" in the subject line of the . If you want me to read your s you need to make sure that I have an up to date e- mail address. When letting me know of a change make sure that "FOMGT301" is somewhere in the subject line of the . Required Materials o Textbook Chambers and Lacey, Modern Corporate Finance: Theory and Practice, 4 th Edition, Hayden McNeil. {Textbook Annex, Umass Amherst}. If I can I will make a few copies of the book in either the 4 th or 3 rd edition available in the SOM reading room on reserve. o Course Notes Supplement Refer to the course website for details. o Personal Response System (PRS) Unit This is a small handheld device that works like a TV remote control and allows me to set multiple-choice questions in class and record the answer given in class by each student. I will be using the PRS system most class periods and points will be earned towards your grade, so you should bring your PRS unit to class each day. New and used units are sold at the Textbook Annex. I believe a new unit costs $36 and that a used one costs $28 and that the units can be sold back to the Annex for $18. Make sure that the batteries in your unit are fresh. o Calculator Must have a multiple power key and a natural log key. Some calculators have built in program keys to solve finance problems (such as NPV, IRR, PV, and FV) Andrew Hall. FOMGT 301 Corporation Finance Syllabus and Policies Page 2

3 Popular calculators of this kind include BA II Plus, TI 83, and the HP 12C. Such features are not required but I do allow them to be used on exams. o OWL The course will feature a number of Online Web Learning assignments. All OWL assignments will be announced in class and on the course website. See course website for more details Andrew Hall. FOMGT 301 Corporation Finance Syllabus and Policies Page 3

4 Academic Honesty I expect you to obey the rules and regulations established in Undergraduate Rights and Responsibilities published by the Office of the Vice Chancellor for Student Affairs and the Office of the Provost at the University of Massachusetts. Students should be especially aware of the Code of Student Conduct (Trustee Doc. #T A) and the University policy on Academic Honesty. You can view this document online at this address: Class Attendance Policy Past experience suggests that regular attendance is a key to success in this course. You are responsible for all material discussed in class, including any announcements made pertaining to any aspect of the course and exams. Exam questions will be drawn from class material, class discussion, and from the text. In addition if you are not in class you will miss the opportunity to register for points towards your grade from PRS questions. Student Evaluation Distribution of Points PRS {class attendance and responses} Midterm Examination #1 Midterm Examination #2 Final Examination: OWL Assignments Course Total 200 points 600 Points 2003 Andrew Hall. FOMGT 301 Corporation Finance Syllabus and Policies Page 4

5 Grades will be allocated based on the points as follows: Grade Personal Response System Points Range From To A AB B BC C CD D F I will start collecting data from the PRS beginning Tuesday February 3, You earn PRS points in two ways; being in attendance (2.5 points per lecture attended up to 50 points) and answering course questions (50 points). Obviously you need to be present during the class with your PRS unit in hand - to receive PRS credit. Attending class without the PRS unit is fine, but you will not receive PRS points that day. Course Examinations There will be two midterm examinations and a final exam. Midterms are to be during the regular class period on Thursday March 4, 2004, and Thursday April 8, Make-up exams will be offered one time only on the following days: Friday March 5, 2004 and Friday April 6, The final exam, scheduled by the Registrar, will have two parts. Part I will cover the material since the second exam. Part II will cover topics prior to that, probably the time value of money, and capital budgeting. They will be machine graded and multiple choice. They will be closed note and closed book, but will have a formula sheet that will list all the textbook formulas Andrew Hall. FOMGT 301 Corporation Finance Syllabus and Policies Page 5

6 How to do well in this class Follow these ten steps: 1. Attend all classes. 2. Read each assigned chapter prior to class. 3. Read each chapter at least once more after you ve seen the material presented and discussed in class. Clear up points of confusion. 4. Follow the demonstration problems at the end of each chapter. 5. Solve or try to solve each of the end-of-chapter problems, or do as many as you possibly can. This is the best way to judge your understanding of the material and to prepare for exams. 6. Study for the OWL Quizzes and take each one. Try to get a high score the first time, but if not, then study some more, clear up your points of confusion, and take the quiz for a 2 nd time or a 3 rd time or Learn how to use your calculator in good time to use it during exams. 8. Take the practice exam in simulated exam conditions, that is, under a strict time limit. Use no notes, book, or any other materials while you take the practice exam. Resist the temptation to even look at the practice exam until a few days before the scheduled exam. 9. Pay close attention to notices and materials available and posted on the course web site. 10. Form a study group and help each other. Cellular Phones Turn them off or turn them to silent when you come into class. Do NOT use them in class Andrew Hall. FOMGT 301 Corporation Finance Syllabus and Policies Page 6

7 Outline Course Schedule: We will stick as closely to this schedule as possible. Cls Day Date Topic Reading OWL Assignment Wed Jan 28 th First Day Of Classes OWL tutorial / PRS Survey 1 Thu Jan 29 th Admin Books Schedule Requirements Grading OWL PRS etc etc Chapter 3 Calculator Survey / Office Hours Survey 2 Tue Feb 3 rd Time Value of Money 1 Optional Review of Algebra 3 Thu Feb 5 th Time Value of Money 2 4 Tue Feb 10 th Time Value of Money 3 Chapter 1 Quiz #1 due Midnight Last day to Add or Drop with no record 5 Thu Feb 12 th Modern Corporate Finance 1 6 Tue Feb 17 th Modern Corporate Finance 2 Chapter 2 Quiz #2 due Midnight 7 Thu Feb 19 th Markets and Contracts 1 8 Tue Feb 24 th Markets and Contracts 2 Chapter 4 Quiz #3 due Midnight 9 Thu Feb 26 th Valuation of Financial Securities 1 10 Tue Mar 2 nd Valuation of Financial Securities 2 Quiz #4 due Midnight Wed Mar 3 rd Mid-Term Review Session OWL Practice Midterm 11 Thu Mar 4 th First Mid-Term in Class Chapter 5 Fri Mar 5 th Mid-Term Make Up 12 Tue Mar 9 th Techniques of Capital Budgeting Chapter 6 13 Thu Mar 11 th Estimating Project Cash Flows Quiz #5 due Midnight Spring Break 14 Tue Mar 23 rd Estimating Project Cash Flows Chapter 7 15 Thu Mar 25 th Advanced Topics in Capital Budgeting Chapter 8 Quiz #6 due Midnight Mid-Semester Date (Last day to drop with 'W' Undergraduate) 16 Tue Mar 30 th Risk And Diversification Chapter 9 17 Thu Apr 1 st Risk And Diversification AND Modern Quiz #7 due Midnight Portfolio Theory The Capital Asset Pricing Model 18 Tue Apr 6 th Modern Portfolio Theory The Capital Chapter 10 Quiz #8 due Midnight Asset Pricing Model Wed Apr 7 th Mid-Term Review Session OWL Practice Exam 19 Thu Apr 8 th Second Mid-Term in Class Fri Apr 9 th Mid-Term Make Up 20 Tue Apr 13 th Introduction to Options 1 Quiz #9 due Midnight 21 Thu Apr 15 th Introduction to Options 2 22 Tue Apr 20 th Introduction to Options 3 Chapter 11 Quiz #10 due Midnight Thu Apr 22 nd Monday Schedule 23 Tue Apr 27 th Financial Leverage Chapter Thu Apr 29 th Financing Importance Chapter 13 Quiz #11 due Midnight 25 Tue May 4 th The Dividend Decision 1 26 Thu May 6 th The Dividend Decision 2 Chapter 15 Quiz #12 due Midnight 27 Tue May 11 th Financial Analysis Chapter Thu May 13 th Working Capital Management Last Day of Classes Quiz #13 due Midnight Fri May14th Exam Review Session Sat May 15 th to Fri 21 st Final Exam and Final Exam Make Up 2003 Andrew Hall. FOMGT 301 Corporation Finance Syllabus and Policies Page 7

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