Syllabus – Spring Semester 2019, 3 credits
UWM, SHELDON B. LUBAR SCHOOL OF BUSINESS
Bus Am 351, Lec. 001 TR 9:30-10:45 AM (48755) in Lubar Hall N130
INSTRUCTOR: Richard D. Marcus, Ph.D.is an Associate Professor of Finance and the Chair of the LSB Executive Committee
OFFICE: S430F in Lubar Hall. My mailbox is also on the fourth floor of Lubar Hall
OFFICE HOURS: Tuesdays from 3:30 to 4:30PM and Thursdays from 12:15-1:15 PM in Lubar Hall S430F and by appointment.
TELEPHONE: 414-229-4103 (office) or 414-228-7731 (home) or 414-510-7731 (cell)
E-MAIL: marcus@uwm.edu/. When sending me an email about Finance 351, please write either “Business Scholars” or “Finance 351” in the subject line.
HOMEPAGE: https://sites.uwm.edu/marcus/
BUSINESS SCHOLARS: PRINCIPLES OF FINANCE 351: Fundamentals of financial management, analysis of financial statements, risk and return, debt/equity valuations, cost of capital, capital budgeting, capital structure, and dividend policies. Prerequistes: jr st; admis to Business Scholars Prog; Econ 103(P) & 104(P); Bus Adm 207(P) & 211(P).
TEXTBOOK: Ross, Westerfield, and Jordan, Fundamentals of Corporate Finance, 12th Ed. © 2019. There are used copies for the 11th edition and even cheaper for 10th or 9th Ed., which will work quite seamlessly as well as the current edition. As outlined in this syllabus, assignments make up a significant portion of your overall course grade. I will not use electronic assignments, but I will hand out paper assignments in class, approximately one per week. I also hand out paper PowerPoint slides slides in class as well, typically one set for each week.
FINANCIAL CALCULATOR: You will need a financial calculator of your own choosing. My recommendation is Texas Instruments BAII Plus or the professional version. The textbook is designed for use of either HP-10B or TI BA II Plus Financial Calculators. Either the TI or HP is fine with me. Most APPS for smart phones include some financial calculator functions, but few of the free APPS have all that is needed for bond analysis, such as IRR and uneven cash flows. It is possible to purchase a BA II Plus App for $14.99 on iTunes. For even less, can use 10bii Financial Calculators for $5.99 from i-Tunes or Android, or Vicinno FinCalc Pro for $1.99 for i-Tunes and Android. If you plan on being a Finance or Accounting Major, I suggest that you get a physical (non-cell phone) calculator, as other classes will not permit use of a cell phone, but I do permit cell phones in my class. BYC means Bring Your Calculator!
EXAMINATION AND HOMEWORK WEIGHTS: There will be one midterm examination and one final. Each exam is worth 40% of the class. We will also have ten homework assignments passed out in class and put on D2L that will constitute 20% of the points. I have not yet moved to Canvas, so we stay in D2L one more semester.
MIDTERM EXAM: The midterm for 351 is on Thursday, February 28, 2018. This exam covers material from Chapter 1-11 and lecture material. The midterm has 100 points possible. The style of the exam is short essays completed in Blue Books, which I will provide.
HOMEWORK ASSIGNMENTS: There are 10 assignments including one done in the Nicholas Finance lab. Each assignment is worth 5 points, or 50 points in total. Thus, 20% of your grade is based on Homework Assignments. Five additional points awarded for attending the Harley Davidison field trip on March 5th.
FINAL EXAM: The final for 351 on Monday, May 13, 2019 at 10am to noon in our classroom, room N130. This exam covers primarily Chapters 12-21 and classroom material. The final has 100 points possible. The exam is also short essays written in Blue Books that I will provide.
GRADES: Grades will be based on the total points earned on the midterm, final, homework assignments, and attendance at special events. There are no “extra credit” points available. Typically, students who amass points at (or above) the median score will be considered for earning an A or A-. Those who are in the lower half will be considered for B+ and B, however, it is possible to earn much lower grades for those who do not demonstrate an understanding of the key objectives of corporate finance. Scores will be posted on Desire2Learn at: http://d2l.uwm.edu/.
CLASSROOM POLICIES: UWM has long-standing policies on academic misconduct, sexual harassment, discrimination, adding, dropping, withdrawal, repeating classes, and changes of grade. These policies are available at: https://sites.uwm.edu/marcus/policies/.
SPECIAL NEEDS: If anyone has a need for note-taking or testing assistance, please feel free to discuss this with me early in the semester. Slide presentations are available weekly in class and will be available on D2L.
SOCIAL CONNECTIVITY: Financial announcements of stock splits, leverage buyouts, and dividend changes occur daily. Some will be highlighted for special attention. These can appear on our class’ Facebook page, and if important, will be noted in class. Students will be invited to like a fan page that will be used for both 350 students and 351 students called UWMFinance350. The link to UWMFinance350 is on the navigation line in your D2L site for our class. You do not have to join Facebook to look at our page via the D2L navigation link.
OBJECTIVE: To understand the everyday financial activities of collecting from customers and paying suppliers, finding long-term financing to pay for investments, and deciding which investments offer the greatest promise. These are issues sometimes called Financial Management, but are part of the duties of a financial manager. Financial managers who do these tasks well reduce the risk of financial distress and increase the opportunities for growth and profits.
Lecture #2 is on Thursday, January 24: Chapter 2 – Financial Statements, Taxes, and Cash Flows. Start Homework #1.
Lecture #3 on Tuesday, January 29: Chapter 3 – Working with Financial Statements (with an emphasis on Ratio Analysis).
Lecture #4 on Thursday, January 31: Chapter 4 – Long-Term Financial Planning and Growth. Start Homework #2 and Homework #1 is due today, January 31.
Lecture #5 on Tuesday, February 5: Chapter 5 – Introduction to Valuation and Chapter 6 – Discounted Cash Flow Valuation. Start Homework #2.
Lecture #6 on Thursday, February 7: Chapter 7 – Interest Rates and Bond Valuation. Homework #2 is due today, February 7. Start Homework #3.
Lecture #7 on Tuesday, February 12: Chapter 8 – Stock Valuation (with an emphasis on the dividend discount model). Homework #3 is due today, February 12.
Class #8 on Thursday, February 14 in Finance Lab:Class Valentine’s Day Field Trip to the David Nicholas Finance Lab and use of FactSet. Homework #4 is distributed which is a finance project using FactSet in the lab.
Lecture #9 on Tuesday, February 19: Chapter 9 – Net Present Value and Other Investment Criteria. Homework #4 is due February 19 or you may hand back in the lab on February 14 if you are done.
Lecture #10 on Thursday, February 21: Chapter 10 – Making Capital Investment Decisions. Start Homework #5.
Lecture #11 on Tuesday, February 26: Chapter 11 – Project Analysis and Evaluation and also a review for Midterm 1. A list of some key formulas will be handed out and will be attached to the midterm given on March 1. Homework #5 is due today, February 26.
Lecture #12 on Thursday, February 28 is our Blue Book Short Essay Midterm, which covers Chapters 1 – 11 and lecture material.
Lecture #13 will be our class trip to the Harley-Davidson Museum. On Tuesday, March 5, UWM buses will take us the Harley-Davison Museum, departing at about 9AM. We will leave the Museum at 11:30 AM and be back on campus by noon. The University will provide transportation to the event and back at the end of the meeting to Lubar Hall central driveway.
Lecture #14 on Thursday, March 7: Alice Wycklendt, an investment analyst at RW Baird, will discuss her analysis of HOG and what goes into being an investment analyst.
Lecture #15, Tuesday, March 12: Chapter 12 – Some Lessons From Capital Market History.
Lecture #16 on Thursday, March 14: Chapter 13 – Return, Risk, and the Security Market Line. Start Homework #6.
Spring Break – March 16-24 I like the sound of “Spring Break” better than spring recess. It sounds more like we’re all headed to Fort Lauderdale in an Elvis Presley beach-blanket movie.
Lecture #17 on Tuesday, March 26: Is a stock really just an option? An introduction to options and contingent claims. Homework #6 is due today, March 26.
Lecture #18 on Thursday, March 28 Chapter 14 – The Cost of Capital. Start Homework #7.
Lecture #19 on Tuesday, April 2: Chapter 15 – Raising Capital. Homework #7 is due today, April 2.
Lecture #20 on Thursday, April 4: Chapter 16 – Financial Leverage and Capital Structure Policy.
Lecture #21 on Tuesday, April 9: Chapter 17 – Dividends and Dividend Policy. Start Homework #8.
Lecture #22 on Thursday, April 11: Chapter 18 – Short-Term Finance and Planning. Homework #8 is due today, April 11.
Lecture #23 on Tuesday, April 16: Chapter 19 – Cash and Liquidity Management (skip Appendix 20A on credit policy). Start Homework #9.
Lecture #24 on Thursday, April 18: Chapter 20 – Credit and Inventory Management. Connect Homework #9 is due today, April 18.
Lecture #25 on Tuesday, April 23: Chapter 21: International Corporate Finance. Start Homework #10.
Lecture #26 on Thursday, April 25: Time Diversification and the Declining Value of International Diversification in a Global Economy
Lecture #27 on Tuesday, April 30: Basics of Event Studies in Finance. Connect Homework #10 is due today, April 30.
Lecture #28 on Thursday, May 2: Management Buyouts (MBOs), Corporate Governance, and Business Ethics.
Lecture #29 on Tuesday, May 7: Leveraged Buyouts (LBOs) and Merger Waves
Lecture #30 on Thursday, May 9: Review for the final. Primarily Chapters 13-21 and classroom material. A list of key formulas will be distributed and will be attached to the final. The final is short essays completed in a Blue Book.
Friday, May 10: This is the University Study Day – No classes.
Finals Week is May 11-18.
Final Exam on Monday, May 13, 2019 at 10am to noon in our classroom, N130. Scores and grades will be posted on D2L at http://d2l.uwm.edu/.