SEMESTER AT SEA COURSE SYLLABUS Colorado State University, Academic Partner Voyage: Spring 2019 Discipline: Finance Course Number and Title: FIN 300 Principles of Finance (Section 2) Division: Upper Faculty Name: Professor Nahum Biger Semester Credit Hours: 3 Prerequisites: The standard Colorado State University prerequisites - One (1) lower-division accounting course AND one (1) economics course AND one (1) business information systems course AND one (1) principles of macroeconomics course AND one (1) calculus course have been waived by the instructor. COURSE DESCRIPTION This course introduces students to the basic concepts of finance. It describes the challenges that financial managers of corporations face in managing the financial affairs of the company. The course commences with brief description of financial tools and language financial statements and cash flow and points at the difference between the language of accounting and the economic view of financial decisions. We study the concept of valuation, the time value of money and the concept of Discounted Cash Flow and its uses in assessing the value of bonds and stocks. We then learn the concept of market efficiency and some theoretical explanations to the way the capital market determines the prices of securities. We apply this theory to the concept of the capital structure decision and to the determination of the cost of capital of the firm. LEARNING OBJECTIVES Upon completion of the course, students should be able to: recognize the tools of financial analysis, and the way these tools are applied; determine the present value of future cash flow using the discounted cash flow approach; analyze the effect of taxes, on the value of investment proposals; determine the value of bonds, and describe the concept and implications of the term structure of bond yields; understand and describe the concept of capital structure and the effects of interest rates, risk and taxes on the capital structure decision of the firm; evaluate real investment proposal of firms by constructing the after tax cash flow of a proposed investment and apply the firm's cost of capital in order to determine the net present value of the proposed investment project. REQUIRED TEXTBOOK AUTHOR: Stephen A. Ross, Randolph W. Westerfield and Bradford D. Jordan, (Denoted RWJ) TITLE: Principles of Corporate Finance PUBLISHER: McGraw-Hill Irwin+ ISBN #: 10: 1305280601 or 13: 9781305280601978 DATE/EDITION: 2016, 13th Edition
TOPICAL OUTLINE OF COURSE Depart Ensenada, Mexico January 5 A1 January 7: Introduction The Challenge of the Chief Financial Offices Chapters 1, RWJ A2 January 9: Financial Statement, Taxes and Cash Flows Chapter 2 RWJ A3 January 11: Working with Financial Statement Chapters 3, RWJ Honolulu, Hawaii January 12 A4 January 14: Long Term Financial Planning and Growth Chapter 4, RWJ January 16 International Date Line crossing (Lost Day) A5 January 17: Introduction to Valuation The Time Value of Money Chapter 5 RWJ No Class January 19 A6 January 20: Discounted Cash Flow Valuation Chapter 6 RWJ A7 January 22: Review: Chapters 1-6, RWJ Finance 300-2018 Kobe, Japan January 24-28 A8 January 29 Midterm Exam 1 Chapters 1-6, RWJ Shanghai, China January 31 - February 1 In-Transit February 2-3 Hong Kong, SAR February 4-5 A9 February 6: Interest Rates and Bond Valuation Chapter 7 RWJ Ho Chi Minh City, Vietnam February 8-13
A10 February 14: Bond yields, The Term Structure of Interest Rates and Bond Duration Chapter 7 RWJ No Class February 16 A11 February 17: Stock Valuation Chapter 8 RWJ Yangon, Myanmar February 19-23 A12 February 24: Net Present Value and Other Investment Criteria Chapter 9 RWJ A13 February 26: Making Capital Investment Decisions Chapter 10 RWJ Cochin, India February 28 March 5 A14 March 6: Project Analysis and Evaluation Chapter 11 RWJ No Class March 7 A15 March 9: Review Chapters 7-11, FINANCE 300-2018 Port Louis, Mauritius March 11 A16 March 12: Midterm Exam II Chapters 7-11, RWJ A17 March 14: Market Efficiency Chapter 12 RWJ A18 March 16: Risk, Return and the Securities Market Line Chapter 13 RWJ Cape Town, South Africa March 18-23 A19 March 24: The Cost of Capital Chapter 15 RWJ
A20 March 26: Financial Leverage and Capital Structure Policy Chapter 17 RWJ A21 March 28: Capital Structure, the Cost of Capital and Project Valuation Chapter 15 and 17 RWJ March 30 Field Class Projects Due Takoradi, Ghana March 30 - April 1 Tema, Ghana April 2-3 A22 April 4: Dividends and Dividend Policy Chapter 18 RWJ A23 April 6: (Possibility: Options and Options Valuation) Chapter 24 RWJ Study Day April 8 PPP Projects due Finance 300-2018 A24 April 9 Review Chapters 12-17 Casablanca, Morocco April 11-15 A25 April 18: Final Exam Amsterdam, the Netherland April 21 FIELD WORK Semester at Sea field experiences allow an unparalleled opportunity to compare, contrast, and synthesize the different cultures and countries encountered over the course of the voyage. In addition to the one field class, students will complete independent field assignments that span multiple countries. Field Class & Assignment [Field Class proposals listed below are not finalized. Confirmed ports, dates, and times will be posted to the spring 2019 Courses and Field Class page when available.] Field Class attendance is mandatory for all students enrolled in this course. Do not book individual travel plans or a Semester at Sea sponsored trip on the day of your field class. Field Classes constitute at least 20% of the contact hours for each course, and are developed and led by the instructor. Proposed Field Class:
Project Evaluation the local perspectives, a view from Cape Town, Republic of South Africa After learning the intricacies of investment project evaluation, the country visit will provide opportunities to learn and practice the effects of changing exchange rates, different inflation rates, foreign taxation and different interest rates on project evaluation. We shall visit the local branch of one of the largest banks (to be arranged) and attend a presentation of the present economic situation of South Africa, and in particular the local inflation, interest rates, exchange rate present policy and local corporate taxation. Learning Objectives 1. Learning about the local financial scene in South Africa and appreciate the differences between the USA financial environment and the South African financial environment. In particular understand the difference between the multi-bank structure of the American banking and the South African multi-branch major dominant banking system. 2. Comparing and contrasting the effects of major macro-economic variables: inflation, interest rates, exchange rates and corporate taxation in South Africa versus the USA financial scene. 3. Learning the effects of the macro economic variables on the approach to project evaluation incorporating the local macro-economic variables in the process of constructing the project cash flow and the cost of capital. Field Class Assignment: Project report: Students will summarize their field class experiences in light of what will be studied in the course and refer to the characteristics of the South African macro-economic variable that affect the approach to project evaluation. Independent Field Assignment: Project report: Students will write a comparative paper based on their observation and information gathered in RSA and reflect on changes that might be necessary if the project that they consider are targeted to two other countries. Then they apply the investment criteria for project evaluation as applied by an American firm who contemplates investment in South Africa. Students will gather information in current inflation rates, exchange rates, interest rates and corporate taxes in South Africa during our visit to Cape Town. For the field project students will adjust the future cash flow that the instructor will provide, in US dollar terms, to the local currency of South Africa, assess the cost of capital appropriate for the project in this country and evaluate the Net Present Value (NPV) of the project. Students have to submit their report including a list of source of information to support their assessment of the desirability of the project. The final project report must indicate which two countries the student chose. METHODS OF EVALUATION There will be two mid-term exams and a final exam that represent about seventy percent of the course points (see below). The written Field Project is intended to teach students how to write about the economy and the indicators projects provides experience working in a small team. Course Evaluation Points Shares 2 mid-term examinations 150 30% Final examination 200 40% Indicator photo project 50 10% Field Project 100 20%
500 100% GRADING SCALE The following Grading Scale is utilized for student evaluation. Pass/Fail is not an option for Semester at Sea coursework. Note that C-, D+ and D- grades are also not assigned on Semester at Sea in accordance with the grading system at Colorado State University (the SAS partner institution). Pluses and minuses are awarded as follows on a 100% scale: Excellent 97-100%: A+ 93-96%: A 90-92%: A- Good 87-89%: B+ 83-86%: B 80-82%: B- Satisfactory/Poor 77-79%: C+ 70-76%: C 60-69%: D Failing eless than 60%: F ATTENDANCEE/ENGAGEMENT IN THE ACADEMIC PROGRAM Attendance in all Semester at Sea classes, including the Field Class, is mandatory. Students must inform their instructors prior to any unanticipated absence and take the initiative to make up missed work in a timely fashion. The instructor will make reasonable efforts to enable students to make up work, which must be accomplished under the instructor s supervision (e.g., examinations, laboratories). In the event of a conflict concerning this policy, individuals may appeal using established CSU procedures. LEARNING ACCOMMODATIONS Semester at Sea provides academic accommodations for students with diagnosed learning disabilities, in accordance with ADA guidelines. Students who will need accommodations in a class, should contact ISE to discuss their individual needs. Any accommodation must be discussed in a timely manner prior to implementation. A letter from the student s home institution verifying the accommodations received on their home campus (dated within the last three years) is required before any accommodation is provided on the ship. Students must submit this verification of accommodations to academic@isevoyages.org as soon as possible, but no later than two months prior to the voyage. STUDENT CONDUCT CODE The foundation of a university is truth and knowledge, each of which relies in a fundamental manner upon academic integrity and is diminished significantly by academic misconduct. Academic integrity is conceptualized as doing and taking credit for one s own work. A pervasive attitude promoting academic integrity enhances the sense of community and adds value to the educational process. All within the University are affected by the cooperative commitment to academic integrity. All Semester at Sea courses adhere to this Academic Integrity Policy and Student Conduct Code. Depending on the nature of the assignment or exam, the faculty member may require a written declaration of the following honor pledge: I have not given, received, or used any unauthorized assistance on this exam/assignment. RESERVE BOOKS FOR THE LIBRARY None
FILM REQUEST: None ELECTRONIC COURSE MATERIALS Power point presentations of the course material will be made available to the students as the course progresses. ADDITIONAL RESOURCES /https://www.investecwealthforum.co.za/insight/global-investment-view None