Principles of Finance 350 – Spring 2017 – 3 Credits
Syllabus
SHELDON B. LUBAR SCHOOL OF BUSINESS
University of Wisconsin – Milwaukee
Bus Adm 350 Lecture 001 is Tues/Thurs 11 AM – 12:15 PM (59930) in Lubar S185
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 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/
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 select along the 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 fiancial 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 a 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, February 21 in class and covers Chapters 1-5 for 40 points. The second midterm is on Thursday, April 6 in class and covers Chapters 6-10 for 40 points. The final covers Chapters 11-14. 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 14 assignments (10 graded and 4 are ungraded). Each of the ten graded assignments is worth 5 points for a total of 50 points out of 180. 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 Tuesday, May 16 at 10 A.M. to Noon in our classroom. 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.
GRADES: Grades will be based on the total points earned on midterm 1, midterm 2, the final, and the scores received on the graded assignments in CONNECT FINANCE. A total of 445 is the maximum possible points for the semester. There are no “extra credit” points available. Typically, students who amass points at (or above) the median score will be considered for earning a B or better. Those who are in the lower half will be considered for scores of B- or lower. Scores will be posted on Desire2Learn at: http://d2l.uwm.edu/.
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.
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, January 24: Chapter 1- Introduction to Financial Management
Lecture #2 is on Thursday, January 26: Chapter 2 – Financial Statements, Taxes, and Cash Flows.
Tuesday, January 31: 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, January 31: Chapter 2 (continued) – CFFA or Cash Flow From Assets
Lecture #4 on Thursday, February 2 Chapter 3 – Working with Financial Statements (emphasis on ratio analysis).
Tuesday, February 9: 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.
WEEK 3: Lecture #5 on Tuesday, February 7: Chapter 3 (continued) – The Du Pont Identity
Lecture #6 on Thursday, February 9: Chapter 4 Introduction to Valuation (BYC = Bring Your Calculator!)
Tuesday, February 14: 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.
WEEK 4: Lecture #7 on Tuesday, February 14: Chapter 5 – Discounted Cash Flow Valuation (BYC)
Lecture #8 on Thursday, February 16: Chapter 5 (continued) – Effective Annual Rates (EARs), Perpetuities, Midterm 1 Overview.
Tuesday, February 21 is also the suggested due date for the fourth Finance Connect ungraded assignment based on Chapter 5 and LearnSmart Chapter 5, both reviews for upcoming Midterm 1.
WEEK 5: Tuesday, February 21: is our MIDTERM #1 in classroom S185 from 11-12:15PM and BYC! Midterm 1 covers Chapters 1-5.
Wednesday, February 22 – Final Due Date for all LearnSmart Chapters 1-5 and Connect Assignments for the first third of our class
Lecture #9 on Thursday, February 23: Chapter 6 – Interest Rates and Bond
Tuesday, February 28: Suggested due date for the fifth Connect assignment from Chapter 6. This assignment is graded.
WEEK 6: Lecture #10 on Tuesday, February 28: Chapter 6 (continued) – Bond Features, Bond Types, and Yield Curves
Lecture #11 on Thursday, March 2: Chapter 7 – Equity Markets and Stock Valuation
Tuesday, March 7: Suggested due date for sixth Finance Connect assignment from Chapter 7. This assignment is graded.
WEEK 7: Lecture #12 on Tuesday, March 7: Chapter 7 (continued) – Preferred Stocks, Primary Markets, and Secondary Markets for Equities
Lecture #13 on Thursday, March 9: Chapter 8 – NPV is Net Present Value and IRR is Internal Rate of Return
Friday, March 10th: Someone turns 64 this day. I wonder who? Anyone know a song by the Beatles: When I’m 64? If you are in the mood for a tune from 1967 from the St. Pepper’s Lonely Hearts Club Band album, click: https://www.youtube.com/watch?v=XFxNC87HyLo/. Paul McCartney wrote the music when he was 15. He played it when The Beatles were still known as The Quarrymen. The version we now know was to honor of Paul’s father’s 64th birthday.
Tuesday, March 14: Suggested due date for seventh assignment from Finance Connect from Chapter 8. This assignment is graded.
WEEK 8: Lecture #14 on Tuesday, March 14 Chapter 8 (continued) – Capital Budgeting and Capital Rationing
Lecture #15 on Thursday, March 16 Chapter 9 – Making Investment Decisions
Tuesday, March 28 after Spring Recess: Suggested due date for eighth Finance Connect assignment based on Chapter 9. This assignment is graded.
SPRING RECESS: March 18-26
WEEK 9: Lecture #16 on Tuesday, March 28 Chapter 9 (continued) – Sensitivity Analysis of Capital Projects and Managerial Options
Lecture #17 on Thursday, March 30 Chapter 10 – Lessons from Capital Market History
Tuesday, April 4: Suggested due date for ninth Finance Connect assignment based on Chapter 10. This assignment is ungraded.
WEEK 10: Lecture #18 on Tuesday, April 4: Chapter 10 (continued) Capital Market Efficiency and review for Midterm #2
Thursday, April 6: is our MIDTERM #2 in classroom S185 from 11AM to 12:15PM and BYC! Midterm 2 covers Chapters 6-10.
Friday, April 7 is our Final Due Date for Connect assignments and LearnSmart Chapters 5-9.
There is no suggested Connect assignment due on Tuesday, April 11.
WEEK 11: Lecture #19 on Tuesday, April 11: Chapter 11 – Risk and Return
Lecture #20 on Thursday, April 13: Chapter 11 (continued) – The Security Market Line and CAPM (The Capital Asset Pricing Model)
Tuesday, April 18: Suggested due date for the tenth Finance Connect assignment from Chapter 11. This assignment is graded.
WEEK 12: Lecture #21 on Tuesday, April 18: Chapter 12 – The Cost of Capital
Lecture #22 on Thursday, April 20: Chapter 12 (continued) – Some methods for finding the cost of capital for projects not similar to the whole firm
Tuesday, April 25: Suggested due date for the eleventh Finance Connect assignment from Chapter 12. This assignment is graded.
WEEK 13: Lecture #23 on Tuesday, April 25: Chapter 13 – Leverage and Capital Structure
Lecture #24 on Thursday, April 27: Chapter 13 (continued) – An Optimal Capital Structure?
Tuesday, May 2: Suggested date for the twelfth Finance Connect assignment from Chapter 13. This assignment is graded.
WEEK 14: Lecture #25 on Tuesday, May 2: Chapter 14 – Dividends and Dividend Policy
Lecture #26 on Thursday, May 4: Chapter 14 (continued) – Stock Dividends
Tuesday, May 9: Suggested due date for Thirteenth Finance Connect assignment from Chapter 14. This assignment is graded.
WEEK 15: Lecture #26 on Tuesday, May 9: Should firms repurchase their shares?
Lecture #27 on Thursday, May 11: Review for Final
Friday, May 12: This is the University Study Day. No classes.
Tuesday, May 16 is Final Deadline at midnight for LearnSmart Chapters 10-14 and graded Connect assignments 10-14.
Tuesday, May 16: is our FINAL in classroom S185 from 10AM to Noon. Remember to BYC! The Final covers Chapters 11-14.
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.