BUAD 306-Business Finance Course Overview and Schedule

BUAD 306-Business Finance Course Overview and Schedule Business Finance 306 Fall 2014 Section: 14788R Class Time: T and Th: 2 pm to 3:50 pm Class Location: JKP 110 Prof. Sena Durguner Office Hours: T and Th 12:50 pm to 1:50 pm E-mail: Sena.Durguner@marshall.usc.edu Office Location: BRI-307A Office Phone: TBA Course Description BUAD 306 is a fundamentals course in business finance. Finance is a way of thinking about economic problems that involve uncertainty over time. This course is designed to provide an introductory framework for understanding how financiers think, how they break down components of a financial problem, and how they make decisions as investors and corporations in the financial market. By the end of the semester, you should be familiar with financial vocabulary, understand aspects of financial theory, develop skills in financial computation, and appreciate the underlying financial mindset as well as incentives involved when solving problems of finance. You will learn how to determine risk, how to make decisions, and how to value an investment as a potential financial opportunity. Required Textbooks and Materials 1) Fundamentals of Corporate Finance, Tenth (Alternate) Edition by Ross, Westerfield and Jordan. Since this is an expensive book, students are welcome to use a used-textbook. 2) Calculator with financial functions. I will teach from the Texas Instruments BA II Plus. You can use other calculators that have the same functionality such as the BA II Plus Professional, the Hewlett Packard 17bII+, and Hewlett Packard 10bII. Many graphical calculators, such as the TI-83, have built-in financial functions. However, it is the student s responsibility to learn the functions of their particular calculators. You should bring your calculator to all classes and exams. You will be extremely disadvantaged if you do not have your calculator during exams. During exams you will not be allowed to use cellphone calculators, computers, or any other device that can communicate to other devices, so learning how to use the financial calculator is essential for success in the class. 1

3) I will post slides, practice questions, and extra notes on Blackboard. All related announcements will also be posted on Blackboard. Course Prerequisites: ACCT 410, BUAD 250a, BUAD 280 or BUAD 305. Grading: Your grade will be determined by your performance on the 2 midterm exams, 1 final exam, 3 projects, and assignments as follows: 2 Midterm Exams: 40% (20% each) 1 Final Exam: 35% Best 9 Assignments 12.5% 3 projects 12.5% Total 100% Group Project Assignments: The projects will be posted on the Blackboard course website and submitted as a group. These projects must be typed and handed in to your Blackboard website. Groups will be formed from the same section early in the semester. Each group will compose of 5-6 group members. The projects are due on the dates indicated on the Course Schedule and below. These projects will require the use of Excel. Each assignment will be graded, and the grade will be a partial determinant of your course grade. Each project must be submitted on Blackboard by 10:00 PM on the due date. In addition to electronic submission of the Group Project by 10 pm on the project due date, the Group Project Point Allocation Contract should be submitted as a hard copy with signatures to the instructor at the beginning of the first class after the project due date. The Group Project Point Allocation Contract will distribute the score of the project proportionately to each group member, (subject to a 10% cap) as group members direct. All members to the group must agree to the allocation, and if they do not, instructor will determine the allocation based on the majority of the team. Project 1: Time Value of Money Project (25 points*4=100 points) September 18, Thursday Project 2: CAPM/Bond Project (25 points*4=100 points) October 23, Thursday Project 3: Capital Budgeting Project (25 points*4=100 points) November 20, Thursday Late projects received before the graded assignments are returned will lose 20% per day late. No assignment will be accepted after the graded assignments are returned. Unprofessional work submitted as a group project will be deducted 10% of the project grade. 2

These projects will give you practice with the types of calculations and concepts that are important to a proper understanding of the material of the course. Also, these projects with using Excel to make financial calculations and to solve financial problems. These skills are highly valued in the business world. Assignments I will provide total of 12 assignments during the semester. Each problem set will have 10 multiple choice questions, each question worth 10 points. These problem sets will be submitted by scantron forms at the beginning of the class corresponding to the due date. Please see the tentative course schedule for the deadlines. The best way to perform on these assignments is to first repeat over the lecture notes and work on the practice problems that I will provide for each chapter. Late assignments will not be graded, no matter what the excuse is. But I will drop your lowest 3 score out of 12 assignments in calculating your final grade. If an assignment is missed, it receives an automatic zero. Exams The class will have 2 midterm exams in class times on the dates indicated in the Tentative Course Schedule below. The chapters that you will be responsible for each midterm are also provided at the end of the syllabus under Tentative Course Schedule. The final exam will be a cumulative exam and will cover all the chapters. All midterms and final exam will be closed book and notes. The exams will be a multiple-choice format consisting of conceptual questions and problems. Each exam will be worth 100 points. The exams will be roughly half conceptual questions (which require analytical thinking) and half problems. Exam questions are drawn from the lecture notes, assignments, practice questions I provide for each chapter, sample exams, and group project assignments which means you are responsible for all material covered in class including additional materials we cover but that is not in the textbook. You will be provided with a formula sheet for each exam. I will post a sample formula sheet on Blackboard so that you can know which formulas are going to be included. However, if a formula is not provided in the formula sheet but we covered in class, then you need to know the formula by memory. So, it is best to look at this formula sheet before the exam so that you know which formulas you need to know by memory. I do not assign letter grades to individual exams. For each exam, you will receive a score from zero to 100 points. Your average homework score will be based on 100 points. Each of your group projects will be based on 100 points. At the end of the semester, I will compute your weighted average semester score (also from zero to 100 points) as follows. 3

Semester Score = 0.125*Average of 9 Best Assignment Score + 0.125*Average of 3 Projects + 0.20*Midterm 1 Score + 0.20*Midterm 2 Score + 0.35*Final Exam Score. If your Semester Score is between zero and 49 points (inclusive), you will receive a failing grade (F). This rule will be strictly enforced, and I will not assign any kind of extra credit activities (papers, homework, etc.). Cutoff points for Ds, Cs, Bs, and As will be assigned according to the overall class performance. Final grades will represent how you perform in the class relative to other students. Your grade will not be based on a mandated target, but on your performance. However, I will attempt to follow the School s recommended mean GPA target: 3.0 (B). Three items are considered when assigning final grades: 1. Your average weighted score as a percentage of the available points for all assignments (the points you receive divided by the number of points possible). 2. The overall average percentage score within the class. 3. Your ranking among all students in the class. Midterm 1: September 23, Tuesday Midterm 2: October 30, Thursday Final Exam: To be Announced Tentative Exam Dates: In rare occasions, the dates of the exams might need to be changed. In that case, I will notify students through Blackboard as soon as possible. University policy requires the final exam to be given at the time indicated by the University s final exam schedule. You may refer to http://classes.usc.edu/term-20143/finals to learn about the final exam time and location. Instructors do not have discretion to grant exceptions to this policy. No student is allowed to take the final exam earlier or to skip the final exam. There will be no make-up tests. By enrolling in the course you are committing to take the tests on the scheduled dates. If the midterm is missed for an approved reason, the weight of other midterm and final exam are increased to compensate for the missed midterm. Approval for a missed midterm will be rare, and only with appropriate written documentation from an authoritative source indicating why the student was unable to appear for the midterm. A doctor s certification addressed to the professor warranting the absence of the student from an exam will be required. Recommended Preparations and Expectations I will not be handing out any class material (power point slides, summary sheets, assignments, practice questions for each chapter and practice exams) in class. All these will be available through Blackboard. You are responsible for timely download of the materials. I will also use Blackboard to make class announcements. You will receive an email notification each time an announcement is posted. Please make sure to regularly check the announcements. 4

I suggest you read the specific book chapter before coming to class (see the last page of this syllabus under Tentative Course Schedule for a detailed schedule). This will help you to have an intuition of the material before we start on the topic. The lectures and the resources will not be limited with the book. I will place a great emphasis on what we cover during class and the materials posted on Blackboard. Please note that the slides posted on Blackboard are not a complete record of what I say or do in class, so attending lectures, taking notes, and asking questions will be required to successfully complete the course. If you miss a lecture, the solutions to the power point slides will not be available in Blackboard. You will need to ask for a friend s note or you can confirm with me your answer only if you bring me your own solutions. During the semester, I will regularly post practice questions for each chapter on Blackboard. I will also post sample exams. You will not be graded on the practice questions and exams. Although you are not graded on the practice questions and exams, these practice materials are very important part of our class students who carefully study these additional materials obtain significantly better grades on the exams. I will also post summary sheets highlighting some of the main concepts corresponding to each topic. It is important that you review your notes after each class since the topics are built on top each other. If you miss on the material, it will be hard to catch on during the semester. The class period will typically be taken up by lecture but discussion and student questions are very much encouraged. If I feel that a question leads us too far afield and would be discussed outside of class, I will say so. Otherwise, interaction among students and between students and me is encouraged. You may also ask me your questions over the email. I will try to respond those emails within 24 hours. Most times it is not feasible to give a comprehensive answer to questions sent to me by e- mail. If you send me a question by e-mail and I believe that it is not feasible to give a satisfactory answer to that question by e-mail, I will ask you to come to my office hours. Additional Class Policies 1- Please turn off your cellular phones before entering the classroom and put them in your bagpacks. If necessary, you might be asked to deposit your devices in a designated area in the classroom. Since your phone should be turned off, texting during class is not only disrespectful, but it is also a serious violation of class policy. 2- No laptops or tablets are needed in class. So, the class policy is not to bring laptop or tablets to class. Past feedbacks from students brought out the concern that this causes a distraction for them. It is also a distraction for me during class. 3- No reference letter will be written until after the final letter grades are determined and the entire performance throughout the semester is observed. 5

Grade Appeals Regrades must be requested within one week of the day the exam was returned to the class. The student must submit a written and precise explanation of why he/she thinks the grade should be modified. The entire exam will be regraded and the final mark may go up or down. Returned paperwork, unclaimed by a student, will be discarded after 4 weeks and hence, will not be available should a grade appeal be pursued by a student following receipt of his/her course grade. Tutoring Tutoring is offered through the Marshall Office of Undergraduate Advising as a supplement to classroom instruction. Tutors are able to assist students in understanding difficult concepts, but tutoring sessions are only effective if students regularly attend class and actively engage in the process of thinking critically about the course content. Tutoring will begin on the Monday of the third week of classes. Students can choose to participate in group tutoring sessions or drop-in tutoring sessions. Most students will benefit from group tutoring in particular, as the purpose of group tutoring sessions is to review and discuss content covered in the previous and current week. For more information on tutoring, visit the Marshall Office of Undergraduate Advising in BRI-104 or call (213-740-0690), or visit webpage http://students.marshall.usc.edu/undergrad/advising/. MARSHALL GUIDELINES Add/Drop Process This class will remain open enrollment (R-clearance) for the first three weeks of the semester. If there is an open seat, students will be freely able to add a class using Web Registration throughout the first three weeks of the term. If the class is full, students will need to continue checking Web Registration to see if a seat becomes available. There are no wait lists and the professor cannot add students. See USC guidelines here: http://www.usc.edu/dept/publications/cat2012/private/pdf/2012_2013/academic_policies_12.pdf 1) Waitlist. There are no centralized wait lists for Marshall undergraduate courses. Although there are no wait lists, the Undergraduate Advising Office provides a system by which students can indicate their interest in enrolling in classes that are currently full in order to track demand and manage classroom space effectively. 2) Dropping Students. The professor may drop any student who, without prior consent, does not attend the first two class sessions. The instructor is not required to notify the student that s/he is being dropped. Statement for Students with Disabilities Any student requesting academic accommodations based on a disability is required to register with Disability Services and Programs (DSP) each semester. A letter of verification for approved accommodations can be obtained from DSP. Please be sure the letter is delivered to me as early in 6

the semester as possible. DSP is located in STU 301 and is open 8:30 a.m. 5:00 p.m., Monday through Friday. The phone number for DSP is (213) 740-0776. For more information visit www.usc.edu/disability. Statement on Academic Integrity USC seeks to maintain an optimal learning environment. General principles of academic honesty include the concept of respect for the intellectual property of others, the expectation that individual work will be submitted unless otherwise allowed by an instructor, and the obligations both to protect one s own academic work from misuse by others as well as to avoid using another s work as one s own. All students are expected to understand and abide by these principles. SCampus, the Student Guidebook, contains the Student Conduct Code in Section 11.00, while the recommended sanctions are located in Appendix A. http://www.usc.edu/dept/publications/scampus/gov/ Students will be referred to the Office of Student Judicial Affairs and Community Standards for further review, should there be any suspicion of academic dishonesty. The Review process can be found at: http://www.usc.edu/student-affairs/sjacs/ Failure to adhere to the academic conduct standards set forth by these guidelines and our programs will not be tolerated by the USC Marshall community and can lead to dismissal. Emergency Preparedness/Course Continuity In case of emergency, and travel to campus is difficult, USC executive leadership will announce an electronic way for instructors to teach students in their residence halls or homes using a combination of Blackboard, teleconferencing, and other technologies. Instructors should be prepared to assign students a "Plan B" project that can be completed at a distance. For additional information about maintaining your classes in an emergency please access: http://cst.usc.edu/services/emergencyprep.html Please activate your course in Blackboard with access to the course syllabus. Whether or not you use Blackboard regularly, these preparations will be crucial in an emergency. USC's Blackboard learning management system and support information is available at blackboard.usc.edu. Incomplete Grades In incomplete (IN) grade may be assigned due to an emergency that occurs after the 12th week of classes. An emergency is defined as a serious documented illness, or a documented unforeseen situation that is beyond the student s control, that prevents a student from completing the semester. Prior to the 12th week, the student still has the option of dropping the class. Arrangements for completing an IN course should be initiated by the student, and negotiated with the instructor. Class work to complete the course should be completed within one calendar year from the date the IN was assigned. The IN mark will be converted to an F grade should the course not be completed. 7

Tentative Course Schedule 1 Aug 26 Tuesday Chapter 1: Introduction to Corporate Finance (70 MIN) Chapters 5 & 6: The Time Value of Money and DCF Approach (30 MIN) 2 Aug 28 Thursday Chapters 5 & 6: The Time Value of Money and DCF Approach 3 Sept 2 Tuesday Chapters 5 & 6: The Time Value of Money and DCF Approach 4 Sept 4 Thursday Chapters 5 & 6: The Time Value of Money and DCF Approach (30 MIN) Chapters 2 & 4-Sect 4.3: Financial Statements, Taxes, and Cash Flow, and Percentage of Sales Approach (70 MIN) Assignment # 1 (Chapter 1) 5 Sept 9 Tuesday Chapters 2 & 4-Section 4.3: Financial Statements, Taxes, and Cash Flow, and Percentage of Sales Approach (65 MIN) Chapter 3: Working with Financial Statements (35 MIN) Assignment # 2 (Chapters 5 & 6) 6 Sept 11 Thursday Chapter 3: Working with Financial Statements 7 Sept 16 Tuesday Chp 12 Section 12.6 (Market Efficiency) and Financial Markets (40 min) Chapter 7 Section 7.6 & 7.7: Interest Rates (60 min) Assignment #3 (Chapters 2 & 4-section 4.3) Assignment #4 (Chapter 3) 8 Sept 18 Thursday REVIEW FOR MIDTERM EXAM 1 Time Value of Money Project due by 10 pm 9 Sept 23 Tuesday Midterm Exam 1 (chapters 1, 2, 3, 4.3, 5, 6) 10 Sept 25 Thursday Chapter 7 Section 7.6 & 7.7: Interest Rates (40 min) Chapter 7 Section 7.1, 7.2, 7.3, & 7.4: Bonds and Their Valuation (60 min) 11 Sept 30 Tuesday Chapter 7 Section 7.1, 7.2, 7.3, & 7.4: Bonds and Their Valuation Assignment #5 (Financial Markets, Sections 12.6 & 7.6 & 7.7) 12 Oct 2 Thursday Chapter 7 Section 7.1, 7.2, 7.3, & 7.4: Bonds and Their Valuation (40 min) Chapter 13: Return, Risk, and Security Market Line (60 min) 13 Oct 7 Tuesday Chapter 13: Return, Risk, and Security Market Line Assignment # 6 (Chapter 7-Sections 7.1 & 7.2 & 7.3 & 7.4) 14 Oct 9 Thursday Chapter 13: Return, Risk, and Security Market Line (40 min) Chapter 8: Stock Valuation (60 min) 8

15 Oct 14 Tuesday Chapter 8: Stock Valuation Assignment # 7 (Chapter 13) 16 Oct 16 Thursday Chapter 8: Stock Valuation (40 min) Chapter 14: Cost of Capital (60 min) 17 Oct 21 Tuesday Chapter 14: Cost of Capital Assignment # 8 (Chapter 8) 18 Oct 23 Thursday Chapter 14: Cost of Capital (40 min) Chapter 9: Net Present Value and Other Investment Criteria (60 min) CAPM/Bond Project due by 10 pm 19 Oct 28 Tuesday REVIEW FOR MIDTERM EXAM 2 20 Oct 30 Thursday Midterm Exam 2 (chapters 12.6, 7, 13, 8) 21 Nov 4 Tuesday Chapter 9: Net Present Value and Other Investment Criteria Assignment # 9 (Chapter 14) 22 Nov 6 Thursday Chapter 9: Net Present Value and Other Investment Criteria (40 min) Chapter 10: Making Capital Investment Decisions (60 min) 23 Nov 11 Tuesday Chapter 10: Making Capital Investment Decisions Assignment # 10 (Chapter 9) 24 Nov 13 Thursday Chapter 10: Making Capital Investment Decisions 25 Nov 18 Tuesday Chapter 15: Raising Capital Assignment # 11 (Chapter 10) 26 Nov 20 Thursday Chapter 16: Financial Leverage and Capital Structure Capital Budgeting Project due by 10 pm 27 Nov 25 Tuesday Chapter 16: Financial Leverage and Capital Structure 28 Nov 27 Thursday No Class Due to Thanksgiving Break 29 Dec 2 Tuesday Chapter 17: Dividends and Payout Policy 30 Dec 4 Thursday Review for Final Exam Assignment # 12 (Chapters 15 & 16 & 17) December 10 December 17: Final exams week 9