Finance :00-4:15PM Tuesdays and Thursdays. Spring 2016 Room BE 3025

Transcription

1 Syllabus Finance :00-4:15PM Tuesdays and Thursdays Spring 2016 Room BE 3025 Instructor: Michael P. Ames Phone: please call for an appointment. or Office room # 2056 Office hours are 4:15-5PM on Tuesdays and Thursdays. Please let me know in class if you plan on dropping in during office hours. However, don t feel limited to Tuesdays and Thursdays. Text or Call me if hours are not convenient due to your work or other pressing commitments and we will meet on a day that is convenient to you. Excellent attendance is important as we will discuss specific subject matter that will be on exams. You may take notes with your computer if it is relatively quiet. Recordings of discussions are also possible if everyone agrees who will be recorded. Furthermore, we all benefit by an exchange of ideas. As "Iron sharpens iron, our group discussions give Finance 201 a more down to earth, pragmatic flavor. More importantly, those who participate will likely remember those skills which will help you avoid financial blunders in the future. There will be an emphasis on qualifying any investment using Excel spreadsheets and present value analysis. Most importantly, USI

2 wants you to succeed when you leave our fine University and I want you to succeed in this class and in your career. Course Description Finance 201 will cover financial institutions, different investments, and methods of evaluating and selecting investments. Selection and evaluation processes will depend upon prudent risk exposure coupled with a goal of reasonable ROI (return on investment). We will discuss the challenges that the corporate financial manager and the portfolio manager face in matching up sources of capital, with the competitive demands for funds. For example: Does the CFO (Chief Financial Officer) pay dividends or make internal capital investments? Should he borrow funds for short term needs or issue common stock which dilutes the earnings per share? Does acquiring debt make sense at these interest rates and is the debt with or without recourse? What are the sources or intermediaries that we can go to now for cash to grow our business or portfolio? We will also discuss new sources of capital that are available due to disintermediation. Boutique investment banking houses and other sources on the internet specialize in providing to specific industries venture capital of less than 25 million for small firms. Course Objectives Finance 201 will assist you in developing the following investment survival skills and content knowledge and provide:

3 The ability to value a project or investment by not only projecting future cash flows but discounting those flows due to inflation and other factors to arrive at a present value. The ability to grasp the structure of a simple balance sheet and income statement (which is required if you go to a bank for any loan). An understanding of various risks, and returns associated with different types of investment vehicles including but not limited to stocks, bonds, convertible bonds, mutual funds, off shore funds, certificates of deposits, money market instruments, futures, puts and calls, savings accounts, foreign currency bank accounts, gold, silver, U.S. bonds, corporation bonds, and municipal bonds (and their unique tax advantages, oil workover and drilling projects and the purchase and management of commercial real estate). An overview of the various financial institutions now providing a crossover of services for the corporate financial manager and the small and large personal investor. An overview of the regulatory and supervisory entities which endeavor to protect your savings and stock trading accounts from bank failures and corporate fraud. A knowledge of how firms budget and make investment decisions, how they are taxed, and how they raise capital. The importance of preparation of a feasibility study (print out template attached) before jumping into capital intensive projects. Knowledge of derivatives and other exotic investments and how they played a role in the financial crises of An overview of Macroeconomic Government indicators that are critical to the market price of bonds, currencies and gold. A review of technical (200 day moving average) and fundamental (earnings per share) stock purchase indicators

4 Calculator A Model BAII Plus from Texas Instruments is recommended. No sharing of calculators is permitted. You must be able to readily calculate present value, future value and loan payments. The BAII is not expensive and is available online. It will pay for itself in the future as you will be able to calculate payments on car loans and mortgages which will bring new meaning to full disclosure and hidden charges in calculating monthly payments. Required Text Mayo, Herbert B. Basic Finance: An Introduction to financial Institutions, Investments and Management 10 th edition. South Western, Cengage Learning ISBN-13: Method of Evaluation Quiz I 70 points 7% Instructor evaluation of class Participation 130 points 13% Class Assignments 1 Buy and sell indicators 200 points 20% Exam I 200 points 20% Exam II 200 points 20% Final Exam (comprehensive) 200 points 20% Total 1000 points 100% Grading Scales and Mid-Term Grades Final letter grades for the course will be assigned using the following scale: A points

5 B points B points C points C points D points D points F Less than 600 points I submit midterm letter grades for all students. I prepare the grades from assignments and exams completed before midterm grades are due and include a grade for class participation to date. Class Participation Please be prepared if you are speaking. Someone once told me to hesitate from speaking unless it will help others. Every student will be graded on the quality not just the quantity of their contributions to the discussions. Your confidence will increase if prepared. Read the material, if necessary three times and stop at terms you don t understand and check their meaning and we will discuss those terms in class if you wish. I want to encourage you to make comments on cases, articles, attachments or links that are provided. This will not only help you but also the entire class. Your input will make our class more interesting and relevant to everyone s future investment survival. As your instructor, I must say Basic Finance by Mayo is well written and your required readings are the foundation for the course. The class meetings and discussions will build on that foundation. Students are responsible for all subjects covered in class, whether in text, class

6 discussions, magazine, articles, videos or lectures. Students are expected to keep up with the reading and come to class prepared to discuss the assigned material. You have the responsibility for active rather than passive involvement in the learning process. Class Activities & Assignments There will be a variety of different activities and assignments throughout the semester. Some activities may be done in class and some of the assignments may be done outside of class. The class will be informed of the activities at least 46 hours before it is due if the assignment is to be done outside of class. This means that the assignments will be announced in class, so if you miss class you should contact one of your fellow students to find out if an assignment was given and when it is due. All late assignments will receive a grade of zero. Arrangements will be made only for documented medical or familial emergencies. Assignments are due at the beginning of class. Anyone who is absent from a class when an in-class assignment is conducted will receive a zero for the grade on that assignment. Again, only a documented medical or familial emergency will qualify for an extension. Exams In the event you miss an exam regardless of the reason, the grade you receive on the final exam will be substituted for the missed exam. No more than one exam can be missed under any circumstances. Any other exam that is missed will receive a grade of zero. There will be no makeup exams. Exams may include multiple choice, short answer case analysis and or essay questions. All exams will be in class, closed book exams. Students with Disabilities

7 If you have a disability for which you may require academic accommodations for this class, please register with disability Resources DR as soon as possible. Students who have or who receive an accommodation letter from DR are encouraged to meet privately with course faculty to discuss the provisions of those accommodations as early in the semester as possible. To qualify for accommodations assistance students must first register to use the disability resources in DR, Science Center Rm. 2206, To help ensure that accommodations will be available when needed, students are encouraged to meet with course faculty at least 7 days prior to the actual need for the accommodation. Classroom Courtesy Everyone is expected to be on time for class. Coming in late disrupts the flow of discussion. All cell phones, laptop computers and other electronic devices must be turned off prior to entering the classroom. Also water is allowed in the classroom but no other drinks or food. It is expected that everyone will be respectful of their fellow classmates. Interrupting speakers, carrying on personal conversations, or reading nonrelated materials will not be tolerated. Indeed any activity showing a lack of respect for your fellow students or guest speakers disrupts the class and impedes the learning process. Finally, with reference to our disabled students I challenge you to do those little things that will make our students lives a little easier. Academic Misconduct

8 All students are expected to adhere to the highest standard of honesty throughout their college and professional careers. Please review the USI student handbook for a review of those activities deemed to be dishonest. Some of the more common problems include cheating, (copying someone else s answers on tests, papers or projects), and plagiarism (passing off someone else s work as your own without proper citation). In addition, the section on Student Rights and Responsibilities includes the following statement: "A student must not submit substantial portions of the same academic work for credit or honors more than once without the permission of all the instructors who may be involved. Please see the student handbook for complete details on academic misconduct. If caught, you will automatically receive an F for the course and be cited with academic misconduct at the college and university levels. Future opportunities in government and civil service may be limited. Course Changes The professor reserves the right to make changes to this syllabus subject to reasonable notice. Review sessions will be scheduled prior to each exam. Be there. Class Schedule Jan 12 intro, grading procedures, individual introductions and background, chapter 1 Jan 14 chapter 2 Jan 19 chapter 3, Jan 21 chapter 4 Jan 26 chapter 5

9 Jan 28 Quiz on chapters 1-5 Feb 2 Chapter 6 February 4 chapter 7 February 9 Assessment day no office hours or class February 11 chapter 9 Feb 16 Complete review and discussion of a new product introduced by a class member, relating the product to our Feasibility Study outline. Feb 18 Chapter10 Feb 23 Review of Exam Feb 25 exam on Chapters 5, 6,7, 9,10, March 1 Discussion on chap. 11 (11.3 and 11.4) chapter 12 March 3 Technical indicators presentations March 7-12 Spring Break March 15 Technical indicators presentations March 17th Excel spreadsheet analysis as it applies to the screening and purchase of commercial real estate properties (Apartment houses.) March 22 chapter (13.1c) chapter 14 (14.1, 14.2, ) March 24 chapter 15, chapter 17 March 29 th assessment day

10 March 31 Excel Spread sheet analysis as it applies to the screening and purchase of oil properties including gee whiz factor 30% (gee whiz we are out of money) April 5 review of Exam 2 April 7 Exam 2 11,12,13,14,15,17 April 12 chapter 18 Chapter 19 April 14 chapter 20 and Chapter 22 (22.4,22.5,22.7) April 18 chapter 24 and 25 April 21 chapter April 26 review final exam April 28 th final exam with emphasis on 18,19,20, 22, 24,25,28,29 Spring commencement April 29 th and April 30th