Syllabus for Business Finance (BA 3341)

Spring 2008

Instructor: Nina Baranchuk TA: Mesut Tastan

Office Hours: T 10:00 am – 12:00 pm. Office Hours: T 9-10 am, Th 2 -3 pm.
Office: SOM 3.430 Office: 3.432
Email: nina.baranchuk@utdallas.edu Email: mesut.tastan@student.utdallas.edu
Phone: (972) 883 – 4771 Phone: (972) 883 – 4399

COURSE DESCRIPTION
The goal of this course is to introduce students to the basic principles of corporate finance and
provide tools for securities valuation and financial decision-making. The emphasis will be on the
methods of project selection, consistent with the objective of maximizing the market value of the
firm. The course introduces students to the analysis of financial statements, project valuation, and
capital budgeting. Additional topics covered include securities markets, agency relationships,
mergers and acquisitions, foreign investment decisions, and the trade-off between risk and return.
The prerequisites for BA 3341 include high school Algebra, Accounting 2301, Statistics 3360,
and a working knowledge of a spreadsheet package such as Excel.

LEARNING OUTCOMES

1. Be able to apply time value of money concepts to various valuation problems.

2. Be able to describe what drives a firm’s cost of capital and how to estimate it.
3. Be able to analyze investment in real and financial assets using various methodologies.
4. Be able to construct excel spreadsheets to solve basic financial problems.

READINGS
The required textbook is ”Fundamentals of Corporate Finance”, Stephen A. Ross, Randolph W.
Westerfield, and Bradford D. Jordan, 8th edition (standard), 2005. I will also discuss articles from
The Wall Street Journal. Please notice that the reading material is not a substitute for lectures.
Homework assignments and examinations may contain questions on any topic covered in class,
even if it is not discussed in the textbook.

REQUIREMENTS AND GRADING

Your grade will be determined by your performance in one Excel spreadsheet homework
assignment, in-class quizzes, three midterm examinations and a cumulative final
examination as follows: homework assignment - 10%, quizzes – 10%, midterms and the
final – 20% each. Students must complete the homework assignment individually. Absolutely
NO late homework will be graded. Quizzes will take place each Monday and consist of three
multiple choice questions.

All examinations will be multiple-choice, closed book and closed notes. Quizzes will be
open book open notes. On each examination, including the final examination, students
may use a calculator and only one letter size sheet of paper with hand-written notes. In
case of approved conflict with any of the class requirements, the missing points will be
redistributed towards other examinations in proportion to their weight in the final grade.
There are absolutely no make up tests or assignments. To receive a grade for the class,
students must complete at least 70% of all assignments.

POLICIES
Group discussion of the class material and practice problems is encouraged. This policy does not
extend however to the spreadsheet assignment, on which students are not allowed to collaborate,
and must work out individually.

Students are expected to be above reproach in all scholastic activities. Students who engage in
scholastic dishonesty are subject to disciplinary penalties, including the possibility of failure in
the course and dismissal from the university. “Scholastic dishonesty includes but is not limited to
cheating, plagiarism, collusion, the submission for credit of any work or materials that are
attributable in whole or in part to another person, taking an examination for another person, any
act designed to give unfair advantage to a student or the attempt to commit such acts." Regents'
Rules and Regulations, Part One, Chapter VI, Section 3, Subsection 3.2, Subdivision 3.22.

TENTATIVE COURSE OUTLINE

Date Topics Chapters

January 7 Financial Statement Analysis 1, 2, and 3
January 9 Long-Term Financial Planning 4
January 14 Future Value and Present Value 5
January 16 Discounted Cash Flow Valuation 6
January 23 Valuing Annuities and Perpetuities 6
January 28 Bond Valuation 7
January 30 Stock Valuation 8
February 4 Review 1–8
February 6 Midterm Examination 1
February 11 Net Present Value 9
February 13 Other Investment Criteria 9
February 18 Identifying Cash Flow 10
February 20 Identifying Cash Flow 10
February 25 Project Evaluation 11
February 27 Break-even Analysis 11
March 3 Review 9 – 11
March 5 Midterm Examination 2
March 17 Returns, Risk, and Market Efficiency 12, 13
March 19 Capital Asset Pricing Model 13
March 24 Option Valuation 14
March 26 Cost of Capital 15
March 31 Raising Capital 16
April 2 Capital Structure 17
April 7 Review 12 – 17
April 9 Midterm Examination 3
April 14 Dividend Policy 18
April 16 Liquidity Management 20
April 21 Foreign Investment 22
April 23 Exchange Rates and Interest Rate Parity 22
April 28 Review all of the above
Check the Web Final Examination Cumulative!!