INSTRUCTOR: Richard D. Marcus, Ph.D.is an Associate Professor of Business 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 10:00AM – 11:15AM and Thursdays from 11:45AM to 1:00PM 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 350, please write “Finance 350” in the subject line.
HOMEPAGE: https://sites.uwm.edu/marcus
PRINCIPLES OF FINANCE 350: Examines the fundamentals of financial management, asset/liability valuations, risk and return, investment analysis, sources and uses of funds, cost of capital, and cash management. Prerequisites are soph st; Econ 103(P) & 104(P); Bus Adm 201(P) or 207(P); Bus Adm 210(P) or 211(P).
TEXTBOOK and CONNECT FINANCE: Go to D2L and click along the top right navigation line, McGraw-Hill Campus. This is a direct way (and the cheapest way) to get the electronic book with Connect homework assignments, and LearnSmart for $100. If you have used McGraw-Hill for other books for other classes, use that to logon. If not, give your email and select a password. It is possible to logon for 2 weeks without paying, or just buy it there. Two other ways to access our book is to go to e-Campus, where for $157.14 you can buy the 16-digit code to access the electronic book, Connect, and LearnSmart as well as get a looseleaf paper copy that will be mailed to you in 2 days. The third way is to go through McGraw-Hill for the code and the looseleaf book, which I will make clearer later. LearnSmart earns you 140 points in this class. Repeated, convincing studies of students who used LearnSmart have shown significantly higher scores on midterms, finals, and understanding of finance than those that did not use LearnSmart.
REQUIRED MATERIAL FOR FINANCE 350: McGraw-Hill electronic textbook with LearnSmart and Connect. Also needed is a financial calculator. See more on this below.
SUPPORT AND TIPS FOR CONNECT: If you have any issues while registering or using Connect, please contact the Care Team for McGraw-Hill through http://www.mhhe.com/support. They have a good team for a chat session or you may call them at 1-800-331-5094. Our course examines Chapters 1-14. To avoid problems related to unexpected technical issues, you are advised not to wait until the last moment to complete assignments.
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 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!
ROSS, WESTERFIELD, and JORDAN’s FINANCE BLOG: Problems in Greece, Puerto Rico, or the implications of changes in capital gains taxes brought about by our new President and Congress and how they impact the stock market are discussed. Our authors have a semi-active blog. http://essentialsofcorporatefinance.blogspot.com/
POINTS FOR MIDTERMS, FINALS, HOMEWORK ASSIGNMENTS, and LEARNSMART WORK: There will be two midterm examinations and one final. Each midterm exam is worth 80 of 445 total points in the class. We will also have homework assignments that will constitute 45 of 175 of the points that are completed on Connect Finance from McGraw-Hill. The Final is worth 100 points (50 questions, but we have 2 hours). LearnSmart is worth 10 points per chapter or 140 points.
MIDTERM EXAM DATES: The midterms for 350 are in class. The first midterm is on Tuesday, October 3 in class and covers Chapters 1-5 for 40 questions (80 points). The second midterm is on Thursday, November 9 in class and covers Chapters 6-10 for 40 questions (80 points). The final covers Chapters 11-14. 50 questions in 2 hours and 100 points. Professor Marcus provides a list of key financial formulas attached to the midterms and finals. Students will bring their own financial calculator to the exams.
FINANCE CONNECT ASSIGNMENTS: There are two types of assignments. LearnSmart has you work through a chapter in 20 minutes. There are 14 chapters and 140 points possible. The second type are multiple choice style quizzes, called Assignments. There are 14 assignments (9 graded and 5 are ungraded). Each of the nine graded assignments is worth 5 points for a total of 45 points. The questions are algorithmic so that each student gets different numbers for most problems. The assignments have unlimited number of attempts to retake up to the due dates listed in the “Daily Schedule of Lectures, Discussion Sections, and Connect Assignments” appearing below. There is no penalty for retaking the assignment. I permit (and encourage you) to print assignment, but you must enter your answers on the website.
FINAL EXAM: 350 Finance Lecture 401 is on Monday, December 18 at 8 P.M. to 10 P.M. This is a Joint Final with both lectures 404 and 405, so several rooms will be assigned in December sometime. The final covers Chapters 11-14 for 50 questions, which amounts to 100 possible in the course. The final has more time available, permitting a slightly longer exam than the midterms.
POINTS FOR MIDTERMS, FINALS, HOMEWORK ASSIGNMENTS, and LEARNSMART WORK: There will be two midterm examinations and one final. Each midterm exam (of 40 questions) is worth 80 points each.. The Final is worth 100 points (50 questions, but we have 2 hours). We will also have homework assignments that will constitute 45 points that are completed on Connect Finance from McGraw-Hill. The LearnSmart also completed for each chapter on Connect Finance is worth 10 points per chapter or 140 points. The total possible points are 445 = 80+80+100+45+140. Scores will be posted on Desire2Learn at: http://d2l.uwm.edu/.
TEACHING ASSISTANTS (TAs), EMAIL, DISCUSSION SECTIONS: We have two outstanding Teaching Assistants, <b>Siyuan Fan</b> ( E-mail: sfan@uwm.edu ): and <b>Alex Probst</b> ( E-mail: mailto:aaprobst@uwm.edu ): Siyuan is TA for Discussions 601 through 605 and Alex Probst the TA for Discussions 606-610.
SUPPLEMENTAL INSTRUCTION: Panther Academic Support Services (PASS) offers Supplemental Instruction (SI) review sessions for this course. The SI leader offers review session and is available for walk-in times and online to discuss your questions. We are lucky to have an experienced SI leader in Michael Carroll, carrol75@uwm.edu. He will pass out book marks with his office hours early in the semester.
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 Facebook walls or as text messages using Twitter. Students will be invited to like a fan page that for Professor Marcus’ 350 class. It is called UWMFinance350 and the same name in Twitter. Links to these locations are on the NAVIGATION line on D2L site for our class. You can view the messages sent by clicking either Facebook or Twitter. You can click the like “thumps up” icon in Facebook or click follow in Twitter to have it sent to your own page or phone.
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 they are 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.
Schedule of Lectures, Discussions, & Connect and LearnSmart Assignments
WEEK 1: Lecture #1 on Tuesday, September 5: Chapter 1- Introduction to Financial Management
Lecture #2 is on Thursday, September 7: Chapter 2 – Financial Statements, Taxes, and Cash Flows.
Discussion Session #1: Friday, September 8: Meet your TA. The will demonstrate using Connect Finance assignments, LearnSmart for studying chapters, and class D2L links to Facebook for UWMFinance350. They will work with you to do textbook problems 19-21 on Belyk Paving.
Tuesday, September 12: Suggested due date for the first Finance Connect assignment and LearnSmart Chapters 1 and 2. This assignment is ungraded from Chapter 1. The real due date is just around Midterm 1, but it is best practice to “keep up” with the lectures.
WEEK 2: Lecture #3 on Tuesday, September 12: Chapter 2 (continued) – CFFA or Cash Flow From Assets
Lecture #4 on Thursday, September 14: Chapter 3 – Working with Financial Statements (with emphasis on ratio analysis).
Discussion 2: Friday, September 15: OCF and CFFA problems (especially textbook problems on Titan Football, pages 45-46).
Tuesday, September 19: Due date for the second assignment Finance Connect assignment from Chapters 2 & part of chapter 3. This assignment is graded, but you have multiple times to take it before the deadline. This is also the suggested due date for LearnSmart Chapter 3.
WEEK 3: Lecture #5 on Tuesday, September 19: Chapter 3 (continued) – The Du Pont Identity
Lecture #6 on Thursday, September 21: Chapter 4 Introduction to Valuation (BYC = Bring Your Calculator!)
Discussion 3: Friday, September 22: TAT (Turnover Measures reviewed from pages 59 to 61 and problem 22 on page 89) and Du Pont Identity questions such as 3.7 on page 85.
Tuesday, September 26: Suggested due date for the third Finance Connect assignment from Chapter 3 and Chapter 4 and LearnSmart Chapters 3 and 4. This is a graded Connect assignment. This is also the suggested due date for LearnSmart Chapter 4.
WEEK 4: Lecture #7 on Tuesday, September 26: Chapter 5 – Discounted Cash Flow Valuation (BYC)
Lecture #8 on Thursday, September 28: Chapter 5 (continued) – Effective Annual Rates (EARs), Perpetuities, Midterm 1 Overview.
Discussion 4: Friday, September 29: TVM (Time Value of Money) from end of Chapter 4 using your financial calculator – BYC (bring your calculator!) HINT: Do all the worked problems on page 620-622 (textbook Appendix D) for TI BA II Calculators and HP-10B Calculators.
Tuesday, October 3 is also the suggested due date for the fourth Finance Connect ungraded assignment based on Chapter 5 and LearnSmart Chapter 5, both are good reviews for our upcoming Midterm 1.
WEEK 5: Tuesday, October 3: is our MIDTERM #1 in classroom N416. Midterm 1 covers Chapters 1-5.
Lecture #9 on Thursday, October 5: Chapter 6 – Interest Rates and Bonds
Discussion 5: Friday, October 6: Return of Midterm #1 if available and answers to midterm’s most frequently missed questions and “The Five Keys to Bond Valuation.”
Saturday, October 7- Final Due Date for all LearnSmart Chapters 1-5 and Connect Assignments for the first third of our class
Tuesday, October 10: Suggested due date for the fifth Connect assignment from Chapter 6. This assignment is graded .This is also the suggested due date for LearnSmart Chapter 6.
WEEK 6: Lecture #10 on Tuesday, October 10: Chapter 6 (continued) – Bond Features, Bond Types, and Yield Curves
Lecture #11 on Thursday, October 12: Chapter 7 – Equity Markets and Stock Valuation
Discussion 6: Friday, October 13: DGM – The Dividend Growth Model and selected problems from Questions and Problems of 15-21 on pages 231-232.
Tuesday, October 17: Suggested due date for sixth Finance Connect assignment from Chapter 7. This assignment is graded. This is also the suggested due date for LearnSmart Chapter 6.
WEEK 7: Lecture #12 on Tuesday, October 17: Chapter 7 (continued) – Preferred Stocks, Primary Markets, and Secondary Markets for Equities
Lecture #13 on Thursday, October 19: Chapter 8 – NPV is Net Present Value and IRR is Internal Rate of Return
Discussion 7: Friday, October 20: Finding NVP and IRR using Excel and on calculators, and selected problems 1-15 on pages 265-267.
Tuesday, October 24: Suggested due date for seventh assignment from Finance Connect from Chapter 8. This assignment is graded. This is also the suggested due date for LearnSmart Chapter 7.
WEEK 8: Lecture #14 on Tuesday, October 24: Chapter 8 (continued) – Capital Budgeting and Capital Rationing.
Lecture #15 on Thursday, October 26: Chapter 9 – Making Investment Decisions.
Discussion 8: Friday, October 27: Calculating project Operating Cash Flows (OCF) examples such as #5 and #8 on page 303 and 9.1 on page 301.
Tuesday, October 31: Suggested due date for the Finance Connect assignment based on Chapter 9. This assignment is graded. This is also the suggested due date for LearnSmart Chapters 8 and 9.
WEEK 9: Lecture #16 on Tuesday, October 31: Chapter 9 (continued) – Sensitivity Analysis of Capital Projects and Managerial Options. Is the rumor true that faculty dress up in costumes on Halloween? No, I think that rumor is fake news. But, you never know.
Lecture #17 on Thursday, November 2: Chapter 10 – Lessons from Capital Market History. November brings “Movember,” which is an annual event of growing of moustaches (the “M” is for Moustache) during the month of November to raise awareness of men’s health issues, such as prostate and testicular cancer.
Discussion 9: Friday, November 3: What is the difference between a sample standard deviation and a population standard deviation? Also, we will be working on example problems.
Tuesday, November 7: Suggested due date for ninth Finance Connect assignment based on Chapter 10. This assignment is ungraded. This is also the suggested due date for LearnSmart Chapter 10.
WEEK 10: Lecture #18 on Tuesday, November 7: Chapter 10 (continued) Capital Market Efficiency and review for Midterm #2
Thursday, November 9: is our MIDTERM #2 in classroom N146. BYC! Midterm 2 covers Chapters 6-10.
Discussion 10: Friday, November 10: Arithmetic versus Geometric Returns from Chapter 11. It is unlikely that the scores from Midterm 2 are ready the next morning. Perhaps some problems as well from pages 342-345
Saturday, November 11 is our Final Due Date for Connect assignments and LearnSmart Chapters 5-10.
Tuesday, November 14 is the suggested due date for LearnSmart Chapter 11.
WEEK 11: Lecture #19 on Tuesday, November 14: Chapter 11 – Risk and Return
Lecture #20 on Tuesday, November 16: Chapter 11 (continued) – The Security Market Line and CAPM (The Capital Asset Pricing Model)
Discussion 11: Friday, November 17: Return of Midterm 2 and review of population and sample standard deviations as measures of risk and variability and selected problems 1-13 from pages 380-382.
Tuesday, November 21: Suggested due date for the tenth Finance Connect assignment from Chapter 11. This assignment is graded. This is also the suggested date to complete LearnSmart Chapter 11.
THANKSGIVING WEEK 12: Lecture #20 on Tuesday, November 21: Chapter 11 (continued) – The Security Market Line and CAPM (The Capital Asset Pricing Model)
No school and no discussion sections the rest of this week during Thanksgiving, November 22 through November 26. Oddly, there is no Packer game this year on Thanksgiving Day, November 23.
WEEK 13: Lecture #21 on Tuesday, November 28: Chapter 12 – The Cost of Capital
Lecture #22 on Tuesday, November 30: Chapter 12 (continued) – Some methods for finding the cost of capital for projects not similar to the whole firm.
Discussion 13: Friday, December 1: Return of Midterm 2 and review of population and sample standard deviations as measures of risk and variability and selected problems 1-13 from pages 380-382.
Tuesday, December 5: Suggested due date for the eleventh Finance Connect assignment from Chapter 12. This assignment is graded. This is also the suggested due date for LearnSmart Chapter 12.
WEEK 14:Lecture #23 on Thursday, December 5: Chapter 13 – Leverage and Capital Structure
Lecture #24 on Thursday, December 7: Chapter 13 (continued) – An Optimal Capital Structure?
Discussion 14: Friday, November 8: What is a Workout and what is a Bankruptcy? Selected problems from the end of Chapter 13.
Tuesday, December 12: Suggested due date for the Finance Connect assignment from Chapter 13. This assignment is graded. This is the suggested due date for LearnSmart Chapter 13.
WEEK 15: Lecture #25 on Tuesday, December 12: Chapter 14 – Dividends and Dividend Policy
Lecture #26 on Thursday, December 14: Chapter 14 (continued) – Stock Dividends, DRIPs, Should Firms Repurchase their own Shares?, and Review for the final.
No Discussion 15 on Friday, December 15, as this is the University Study Day and there are no classes.
WEEK 16: Monday, December 18: is our JOINT FINAL in classrooms assigned to us in December. This is joint final of both Lectures 404 and 405 from 8PM to 10PM. Remember to BYC! The Final covers Chapters 11-14.
Tuesday, December 19 is Final Deadline at midnight for LearnSmart Chapters 10-14 and graded Connect assignments 10-14.
Scores and grades will be posted on D2L at http://d2l.uwm.edu/ and an email notice will be sent when grades have been reported on PAWS.