Business Finance BADM 310 - Spring 2019 online Klaus S. Beckmann, Ph.D., M.B.A. Phone: (605) 658-6562 Email: klaus.beckmann@usd.edu MISSION STATEMENT OF BEACOM SCHOOL OF BUSINESS Our primary mission is excellence in undergraduate and graduate education that develops successful future business leaders. We deliver high value to our students, employers and community through distinctive teaching and learning supported by significant intellectual and professional contributions and meaningful service. CATALOG DESCRIPTION OF THE COURSE: Business Finance is an overview of financial theory including time value of money, capital budgeting, capital structure theory, dividend policies, asset pricing, risk and return, the efficient markets hypothesis, bond and stock valuation, business performance evaluation, and other financial topics. PREREQUISITES: Course Prerequisite: ACCT 211 or Concurrent Enrollment in ACCT 211 PREREQUISITE KNOWLEDGE NECESSARY FOR SUCCESS IN BADM 310: Cognitive 1. Students should know what information is contained in each of the 3 basic financial statements, the income statement, balance sheet, and statement of cash flows. 2. Students should know how to use the income statement, balance sheet, and statement of cash flows. 3. Students should understand the three principal forms of business organizations, sole proprietorship, partnership, and corporation. 4. Students should understand the time value of money. Skills 1. Students should be able to interpret financial statements. 2. Students should be able to use financial statements. 3. Students should be able to compute financial ratios. 4. Students should be able to interpret financial ratios LEARNING OBJECTIVES FOR BADM 310: 1. Students will demonstrate an understanding of valuation theory and practice a. Students will demonstrate their ability to analyze a firm s financial position. b. Students will demonstrate an understanding of the theory and practice of cash flow valuation and how it is applied stocks, bonds, and capital investments. c. Students will demonstrate their ability to evaluate stocks, bonds, and capital investments using discounted cash flow techniques. Syllabus: BADM 310 Spring 2019 Page 1 of 7
d. Students will demonstrate their ability to estimate cash flows for capital investment, forecasting, and planning purposes. 2. Students will demonstrate an understanding of markets, contracts, regulation and the trade-off between risk and return. a. Students will demonstrate an understanding of global financial markets, the theory of market efficiency, the role of information, the existence of contracts, and the role regulation. b. Students will demonstrate an understanding of how markets value the trade-off between the risk associated with an investment and return on that investment. c. Students will demonstrate an understanding of interest rate theory, asset pricing and the cost of capital. d. Students will be able to estimate the risk of an investment and demonstrate an understanding of the impact of risk on business decisions. e. Students will apply ethical principles and perspectives to global financial decisions. 3. Students will demonstrate an understanding of financial policy decisions. a. Students will gain an understanding of capital structure and leverage decisions and how those choices impact a firm s cost of capital. b. Students will gain an understanding of distribution policy TEXT AND RELATED MATERIAL: a. Fundamentals of Corporate Finance by Ross, Westerfield and Jordan, 12 th Edition, McGraw Hill, 2018. ISBN: 978-1259918957 (required) GRADING b. Connect (required) All homework quizzes for this course will be conducted through Connect, and you may also do practice assignments using Connect. To register with Connect for this class: c. Financial Calculator (required) A financial calculator is required for this course. I highly recommend the Texas Instruments BA-II plus. No matter which calculator you buy, please make sure the operations manual is included since each model works differently. d. Outlines of the PowerPoint slides will be posted in D2L. Exams: There will be three (two mid-terms and one final) closed-notes and closed-book in-class exams. The final exam will be comprehensive. Each exam will be worth up to 200 points. Syllabus: BADM 310 Spring 2019 Page 2 of 7
Homework and Assignments: Homework and other assignments will be made available on D2L. All homework and assignments must be submitted by the deadline. NO LATE HOMEWORK OR ASSIGNMENTS WILL BE ACCEPTED. Each homework assignments will be worth up to 60 points. Quizzes: There will be ten (11) graded quizzes available on Connect during the course of the semester. Typically, there will be a quiz after each chapter covered in class. Each quiz will be worth up to 20 points. In addition, I will provide practice questions via Connect. Link to register for the course on Connect Hence, your final grade will be determined as follows: Points Exams 600 Homework and Assignments 180 Quizzes 220 Total 1000 Your grade is calculated using straight percentages: Points Letter Grade Percentage A 90-100% 900-1000 B 80-89% 800-899 C 70-79% 700-799 D 60-69% 600-699 F up to 59% up to 599 ADMINISTRATIVE MATTERS: By enrolling in this course, you are accepting an obligation to adhere to the guidelines of the course. Deadlines: You have to complete all assignments (including homework, quizzes, projects) in a timely manner. In the financial industry, we cannot afford to turn work in late, as this may provide our competition with a considerable advantage. I will check my email multiple times a day to answer your questions. It is advisable to work on assignments early to be able to ask important questions before the deadline. After the deadline, no assignments will be accepted for Syllabus: BADM 310 Spring 2019 Page 3 of 7
submission. Extensions will be granted only in the cases of a medical emergency. In these cases, you will be asked to provide documentation. Attendance Policy/Excused Absences: Students are expected to attend all scheduled class meetings. It is the responsibility of students to plan their schedules to avoid excessive conflict with course requirements. However, there are circumstances that lead to excused student absence from the classroom including subpoenas, jury duty, military duty, religious observances, documented illness, and bereavement for immediate family. Excessive unexcused absences (more than 5) may result in your course grade being lowered by up to one letter grade. Grading Favors: In the past, near the end of each semester, a few students have emailed me to say they need special consideration for their grade because of their unique circumstances. I understand that everyone has a different situation regarding work and family obligations. However, the course requires the demonstration of knowledge, and the grading is completely based on the demonstration of knowledge of the course in the manner described in this syllabus. Extenuating circumstances of students such as a busy career, a busy personal life, needing a specific grade to graduate, needing a specific grade to continue receiving financial aid, or needing a specific grade to transfer the credit to another university will NOT influence the grade that is given in this course. The granting of grading favors to a student in this course would reflect discrimination against other students, and is therefore inappropriate. Your final grade will depend on your performance on assignments and exams in this course as explained in this syllabus. All students in this course are subject to the same guidelines, and the same grading scale. Therefore, students who presently have extenuating circumstances that make them believe they deserve special grading favors should not take this course. Since I already explain my grading policy in this syllabus, I will not get involved in conversations via email (or other forms of communication) regarding special favors. It is not appropriate for me to grant special grading favors, and it is not appropriate for students to ask for special grading favors. I will not engage in discussions or respond to requests for preferential grading, so please do not send me such requests. After an exam, some students who did not perform well ask if they can do extra work. This course is designed to assess a student s understanding of specific material. Thus, a student needs to show evidence of understanding that material. I will not allow extra work for individual students, since that discriminates against others in the class who were not given the same opportunity. All the work that I require for the class is described at the beginning of the semester. So, the key is that you do not put yourself in a situation in which you need extra credit. That is, use whatever time could be applied toward extra work and apply that time to perform well on the required assignments and exams. If you dedicate your time doing the required work, you should not need to do extra work. There is normally a high correlation between the amount of time a student spends working on required assignments and exam scores. Furthermore: a. This is a challenging course, and it is very important that you keep up with the material as it is presented in class. This is definitely not one of those classes which you are able to catch up at the last minute. Although the exams are not cumulative, much of the material presented in this course is cumulative in nature. b. All grade appeals must be in writing and submitted to me within one week of the time the quiz/project/test is handed back. No late appeals will be considered. c. While every case will be considered on an individual basis, no grades of incomplete will ordinarily be given in this course. Syllabus: BADM 310 Spring 2019 Page 4 of 7
d. To request for a make-up exam, you must have a valid and documented excuse. You must submit to me a written request at least 2 weeks prior to the exam except in the case of emergency or illness (a doctor s note documenting the illness must be submitted and excusing you to take the exam). e. Withdrawal Policy: The last day to drop a course without the course being recorded on a transcript is. The last day to drop a course with a grade of "W" on a transcript is f. Excused Absence Policy: When necessary, make-up of course requirements missed because of student participation in University sanctioned events and activities shall be worked out between the instructor and the student upon the student s timely initiative. For a University related event, a student must contact his/her instructor at least two days prior to the absence and provide documentation from the sponsoring unit indicating the dates that the student will be absent from class. To the extent possible, students should notify the instructor during the first week of the semester of possible missed dates. Instructors are required to allow for such make-up in a timely manner when a student is absent because of participation in events approved by the Vice President for Academic Affairs. An instructor may have special attendance/requirement policies for particular classes, whenever those policies are not in conflict with the student s right to make up missed requirements as described above. g. Freedom in Learning: Under Board of Regents and University policy student academic performance may be evaluated solely on an academic basis, not on opinions or conduct in matters unrelated to academic standards. Students should be free to take reasoned exception to the data or views offered in any course of study and to reserve judgment about matters of opinion, but they are responsible for learning the content of any course of study for which they are enrolled. Students who believe that an academic evaluation reflects prejudiced or capricious consideration of student opinion or conduct unrelated to academic standards should contact the Dean of the Beacom School of Business to initiate a review of the evaluation. h. Diversity/Inclusive Excellence: The University of South Dakota strives to foster a globally inclusive learning environment where opportunities are provided for diversity to be recognized and respected. The Beacom School of Business is committed to USD s Inclusive Excellence initiatives. We are committed to cultivating an environment of Inclusive Excellence at all levels of the school. We are committed to graduating globally and culturally aware business students who are equipped with the tools to embrace and practice inclusiveness. i. Academic Integrity: No credit can be given for a dishonest assignment. A student found to have engaged in any form of academic dishonesty may, at the discretion of the instructor, be: Given a zero for that assignment. Allowed to rewrite and resubmit the assignment for credit. Assigned a reduced grade for the course. Dropped from the course. Syllabus: BADM 310 Spring 2019 Page 5 of 7
Failed in the course j. Disability Services: Any student who feels he/she may need academic accommodations or access accommodations based on the impact of any disability should contact and register with the Office of Disability Services during the first week of class. Please contact both your instructor and the Director of the Office of Disability Services (Services Center North Room 119B; 605-677-6389; disabilityservices@usd.edu), Ms. Ernetta L. Fox, Director, to make these arrangements as early as possible in the semester. http://www.usd.edu/disabilityservices. k. Exit Exam Requirement: The material presented in this course is part of the common body of knowledge for this discipline. Mastering the information presented in this course lays the foundation for your future success as a knowledgeable, well-rounded business professional. The course is designed to encourage you to commit this valuable information to your longterm memory. In addition to demonstrating mastery of this information throughout the course, you will also be required to demonstrate your retention of this critical common body of knowledge by achieving a satisfactory score on the Beacom School of Business s exit exam. Achieving a satisfactory score on the exit exam is a graduation requirement. This applies to all Business majors (BBA programs). l. Student Code of Ethics: Students enrolled at the Beacom School of Business are expected to maintain the highest standards of integrity and ethical principles and to adhere to the Student Code of Ethics developed and approved by Beacom School of Business students. This Code provides a frame of reference for the behavior of Beacom School of Business students in their personal, academic, and professional activities. m. Privacy of Student Records: The Family Educational Rights and Privacy Act of 1974 (FERPA) provides that each student s educational records remain private. No individual or group outside the educational institution shall have access to nor will the institution (including professors) disclose students educational records without written consent of the students. Because the professor cannot ensure that the student is the only one with access to the student s email account, grades will not be provided via email. The student may access his/her final grade using WebAdvisor. COURSE OUTLINE: Chapter Topic Unit 1 1 Introduction to Corporate Finance 2 & 3 Financial Statement and Ratio Analysis Unit 2 5 & 6 Time Value of Money 7 Valuing Bonds 8 Valuing Stocks Unit 3 9 Capital Budgeting Process and Techniques 10 Cash flow and Capital Budgeting Unit 4 Syllabus: BADM 310 Spring 2019 Page 6 of 7
12 Capital Market History 13 Risk, Return and the Capital Asset Pricing Model 14 Weighted Average Cost of Capital Unit 5 16 Financial Leverage and Capital Structure Policy 17 Dividends and Payout Policy IMPORTANT NOTE: The above outline is intended to give you an idea of the sequence of topics and is not exact. It is essential that you attend class in order to obtain the reading and problem assignment. Some of the above topics will be covered in greater detail than others. Some of the material presented in class is not in the text. Syllabus: BADM 310 Spring 2019 Page 7 of 7