Mr. Joseph A. Wemhoff Email: jwemhoff@luc.edu Personal Cell Phone: 312-622-6093 Schreiber Center 705-F 16 East Pearson Street Chicago, Illinois 60611 Office Hours: 10:30 a.m. to 11:30 a.m. and 12:30 p.m. to 1:30 p.m. on Mondays, Wednesdays, and Fridays, or at other times, by appointment in advance BUSINESS FINANCE 301.20W FALL 2018 Wednesday, and Friday from 11:30 a.m. to 12:20 p.m. Corboy Law Center, Room 423 Catalog Description Course objectives: The objectives of the course are to provide students with a working understanding of the principles of business finance and to develop basic business writing skills. This course is writing intensive. Pre-requisites: Sophomore standing, and a grade of C- or better in ECON 201, ISSCM 241, ACCT 201 (ACCT 201 may also be taken as a co-pre-requisite). Outcome: Students will demonstrate working knowledge of financial concepts, financial analysis, time value of money, financial decision-making, valuations, the risk-return trade-off, capital budgeting, and dividend policy. Students will be able to effectively do basic business writing.
Course Overview Students will learn the basic principles of corporate finance, as well as their practical application. In addition, students will become acquainted with major topics, theories, and current developments in corporate finance. Students will solve quantitative problems. This course will involve business writing, as well. Topics of instruction will include but will not be limited to the following: Financial Analysis The Cost of Capital The Capital Markets Risk / Return The Time Value of Money Capital Structure Planning Capital Investment Cash Flow Management Working Capital Bond Valuation Stock Valuation Liquidity Management Dividends International Finance Risk Management Learning Outcomes 1. General and working knowledge of basic principles, topics, theories, and current developments in corporate finance. 2. The ability to calculate mathematical solutions to basic problems in corporate finance. 3. Proficiency in basic business writing. 4. The ability to make ethical decisions in the best interests of stakeholders. 5. The attainment of a comfort level in discourse on topics in corporate finance. Required Materials 1. Textbook: Fundamentals of Corporate Finance, 10 th Edition, Standard, or higher, by Ross, Westerfield, and Jordan. Published by McGraw-Hill. 2. SAKAI: Lecture notes, class information, homework, etc. will be posted on SAKAI. It is important to have a good working knowledge of this tool. 3. A small portable calculator; the calculator function on smart phones may not be used during tests. 4. Various resources on business writing, which will be provided by the instructor, and which will be introduced at classes from time to time during the course.
Suggested Supplementary Resources A financial calculator is optional, but would facilitate solutions on certain quantitative problems. Otherwise, the mathematical tables in Appendix A of the textbook will be used to solve certain quantitative problems. To understand the real-world application of the concepts covered in class, and to foster curiosity, students are encouraged to read the financial press printed and/or electronic on a regular basis. Examples: The Wall Street Journal, Yahoo!Finance, Bloomberg, The Financial Times, Forbes, etc. Course Requirements and Grading Criteria: Preparation for Class: Before each class, students should have read the relevant material in the textbook. Class lecture notes will be posted in advance of each class. Students may wish to bring these notes, in electronic or hard copy form, to class, and to take their own notes on the lecture slides. Attendance at Class: Formal attendance will not be taken. However, because the textbook will be supplemented by materials introduced in class, and because material covered in class will be on tests and the final exam, attending class is always a good idea. Students are responsible for any material covered, and assignments made, in classes that they do not attend. Homework Assignments: Generally, a homework assignment will be made after each class. Assignments are by the start of the next class, and are to be submitted electronically by email. Homework will not be graded but points will be given for its submission. Answers to the homework will be discussed in class and posted on SAKAI after the end of the class at the start of which they are. Late submissions will not be accepted. Exams and Grading: Students will be able to earn a total of 230 points for the course, divided among homework, four tests, one final exam, and the Writing Component, as follows: Points Percent o Homework: 22 assignments x 1 point each 22 9.6% o Tests: 4 tests x 22 points each 88 38.3 o Writing Component: Six assignments x 12 points each 72 31.3 o Final examination 48 20.9 230 100.0%
Writing Component: The three criteria for each writing assignment will be: o Understanding and application of financial concepts 4 points o Clearly addressing the topic and issues; organization 4 points o Spelling, grammar, punctuation, style guidelines 4 points Students will be provided with feedback on each writing assignment, which will be graded with an initial number of points. The assignments will be returned, and students will have the opportunity to resubmit the assignment with corrections. Corrected assignments will be eligible to earn back up to one point under each of the three criteria. All writing assignments are to be double-spaced and submitted via email or hard copy. Student Notes: All tests and the final exam will be closed book, and formulas will not be provided, although present value/future value tables will be. For the final exam, students will be allowed to bring in a one-page 8.5 x 11 sheet of paper with notes/formulas/whatever on both sides, or two 8.5 x 11 sheets of paper with notes/formulas/whatever on one side of each. ParScore: The ParScore multiple choice system will be used for tests and for the final exam. Extra Credit: As a matter of policy, extra credit cannot be offered to individual students. Participation: While credit will not be given for class participation, students are encouraged participate and to ask questions. Grading: will be done using the attached Course Grading Scale, which will be applied to 230 possible total points. Course Grading Scale A 100-93% A- 92-90 B+ 89-87 B 86-83 B- 82-80 C+ 79-77 C 76-73 C- 72-70 D+ 69-67 D 66-60 F 59 and below Loyola University Grading Scale and Weights A 4.00 A- 3.67 B+ 3.33 B 3.00 B- 2.67 C+ 2.33 C 2.00 C- 1.67 D+ 1.33 D 1.00 F 0
Policies of the Quinlan School of Business Attendance Class attendance and participation are fundamental components of learning, so punctual attendance at all classes, for the full class meeting period, is expected of Quinlan students. Faculty may set participation policies unique to their courses and use class participation as a component of the final grade. The student is responsible for any assignments or requirements missed during an absence. Make-Up Examinations Loyola University academic policy provides that tests or examinations may be given during the semester or summer sessions as often as deemed advisable by the instructor. Because Quinlan faculty believe examinations represent a critical component of student learning, required examinations should be taken during the regularly scheduled class period. Make-up examinations are strongly discouraged. Exceptions may be granted only by the faculty member or department chair, and only for unavoidable circumstances (illness verified by a signed physician s note, participation in intercollegiate athletic events, subpoenas, jury duty, military service, bereavement, or religious observance). A make-up final examination may be scheduled only with the permission of the appropriate Quinlan Assistant or Associate Dean. For a student with a documented special testing need, please consult University policy concerning use of the testing facilities in Sullivan Center at Lake Shore Campus. Academic Integrity All members of the Quinlan School shall refrain from academic dishonesty and misconduct in all forms, including plagiarism, cheating, misrepresentation, fabrication, and falsehood. Plagiarism or cheating on the part of the student in individual or group academic work, or on examinations, will result minimally in the instructor assigning the grade of F for the assignment or examination. In addition, all instances of academic dishonesty must be reported to the chairperson of the department involved. For further information about expectations for academic integrity and sanctions for violations, consult the complete Quinlan School of Business Honor Code and Statement of Academic Integrity on the Quinlan website: http://luc.edu/media/lucedu/quinlan-graduate/pdfs/honor-code-quinlan- July2012.pdf
Special Requests, Circumstances, and Instructor Policies: Laptops may be used during class, but only to follow lecture notes and/or to take student notes. The use of all mobile telephones, IPads, PDAs, etc. including their calculator functions is prohibited during tests and the final exam. Students may bring a non-alcoholic beverage to class; food is not allowed. Audio or video-taping of the class is not allowed, except with advance approval of the instructor and of all persons who are present. Students are encouraged to ask questions. IMPORTANT NOTE: This class may occasionally deviate from the preceding course outline and/or from the following timeline. The instructor reserves the right, solely at his own discretion, to make changes, from time to time, to the course syllabus and/or to the timeline. Course Timeline DATE TOPIC CHAPTERS SECTIONS WRITING Aug. 27 Aug. 29 Aug. 31 Sept. 3 Sept. 5 Sept. 7 Sept. 10 Sept. 12 Sept. 14 Sept. 17 Wed. Sept. 19 Welcome and Orientation Introduction to Corporate Finance Chapter 1 1.1 to 1.3 Introduction to Corporate Finance Chapter 1 1.4, 1.5 Financial Statements and Cash Flow Chapter 2 2.1, 2.2 Financial Statements and Cash Flow Chapter 2 2.3, 2.4 Working with Financial Statements Chapter 3 3.1 to 3.3 LABOR DAY NO CLASSES Introductory essay, not for credit, is Working with Financial Statements Chapter 3 3.3 to 3.5 Basics of business writing Long-term Financial Planning & Chapter 4 Selected Basics of business writing Growth Review for First Test Chapters 1 to 4 First Test (in class) Chapters 1 to 4 Introduction to Valuation: The Time Value of Money Chapter 5 5.1, 5.2 Writing assignment #1 is Introduction to Valuation: The Time Chapter 5 5.2, 5.3 Basics of business writing Value of Money Discounted Cash Flow Valuation Chapter 6 6.1, 6.2 Basics of business writing
Sept. 21 Sept. 24 Sept. 26 Sept. 28 Oct. 1 Oct. 3 Oct. 5 Oct. 8 Oct. 10 Oct. 12 Oct. 15 Oct. 17 Oct. 19 Oct. 22 Oct. 24 Oct. 26 Oct. 29 Oct. 31 Nov. 2 Nov. 5 Nov. 7 Discounted Cash Flow Valuation Chapter 6 6.3, 6.4 Basics of business writing Interest Rates and Bond Valuation Chapter 7 7.1 Interest Rates and Bond Valuation Chapter 7 7.2 to 7.7 Review for Second Test Chapters 5-7 Writing assignment #2 is Second Test (in class) Chapters 5-7 Stock Valuation Chapter 8 8.1, 8.2 Stock Valuation Chapter 8 8.2, 8.3 MID-TERM BREAK NO CLASSES NPV and Other Investment Criteria Chapter 9 9.1 to 9.4 NPV and Other Investment Criteria Chapter 9 9.4 to 9.7 Writing assignment #3 is Making Capital Investment Chapter 10 Selected Decisions Project Analysis and Evaluation Chapter 11 11.3 Some Lessons - Capital Market Chapter 12 12.2 to 12.6 History Some Lessons - Capital Market Supplemental Selected History Review for Third Test Chapters 8 12 & Supplemental Third Test (in class) Chapters 8-12 & Supplemental Return, Risk.The Security Market Chapter 13 13.4 to 13.7 Writing assignment #4 is Line Cost of Capital Chapter 14 14.2, 14.3 Cost of Capital Chapter 14 14.4 Raising Capital Chapter 15 15.1 to 15.6 Raising Capital Chapter 15 15.7 to 15.11, Financial Leverage and Capital Structure Policy Addendum Chapter 16 16.1, 16.2, 16.6, 16.9, 16.10
Nov. 9 Nov. 12 Nov. 14 Nov. 16 Nov. 19 Nov. 21 Nov. 23 Nov. 26 Nov. 28 Nov. 30 Dec. 3 Dec. 5 Dec. 7 Dec. 10 Dividends and Payout Policy Chapter 17 17.1 to 17.6 Writing assignment #5 is Dividends and Payout Policy Chapter 17 17.7, 17.8 Review for Fourth Test Chapters 13-17 Fourth Test (in class) Chapters 13-17 Short-term Finance and Planning Chapter 18 18.2, 18.5 THANKSGIVING BREAK NO CLASSES THANKSGIVING BREAK NO CLASSES Cash and Liquidity Management Chapter 19 19.1 to 19.4 Credit and Inventory Management Chapter 20 20.2 to 20.8 Writing assignment #6 is International Corporate Finance Chapter 21 21.1 to 21.6 and selected Review for Final Examination Review for Final Examination Review for Final Examination Final Examination: 1:00 to 3:00 p.m. Chapters 1 21 & Supplemental Review basics of business writing END OF SYLLABUS