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Syllabus for Business Finance (BA 3341

Fall 2005
Instructor: Office Hours: Office: Email: Phone: Nina Baranchuk W, Th 2:00 – 4:00 pm. SOM 3.430 (972) 883-4771 TA: Office Hours: Office: Email: Phone Xuying Cao
SM2.409 (972) 883- 4833

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.

The required textbook is ”Fundamentals of Corporate Finance”, Stephen A. Ross, Randolph W. Westerfield, and Bradford D. Jordan, 7th 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.

Your grade will be determined by your performance in four homework assignments, two midterm examinations and a cumulative final examination as follows: homework assignments - 20% total (5% each), Midterms - 50% total (25% each), Final - 30%. I will
distribute five homework assignments. Only the highest four homework scores will count towards your final grade. Absolutely NO late homework will be graded. All examinations will be multiple -choice, closed book and closed 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 submitted homework assignments and examinations in proportion to their weight in the final grade. There are no make up tests or assignments.

Group discussion of the class material and homework problems is encouraged. This policy does not extend however to spreadsheet exercises, on which students are not allowed to collaborate, and must work out individually. Moreover, each student is required to produce an individual solution to each problem in the homework.

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.

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Financial Statement Analysis Long-Term Financial Planning Future Value and Present Value Discounted Cash Flow Valuation Valuing Annuities and Perpetuities Net Present Value Net Present Value Making Capital Investment Decisions Review Midterm Examination 1 Introduction to Bond Valuation Bond Pricing Theorems Stock Valuation Models Stock Valuation Models Average Returns, Volatility and Efficiency Tradeoff Between Risk and Return Capital Asset Pricing Model Fundamentals of Option Valuation Cost of Capital Review Midterm Examination 2 Capital Structure Capital Structure Dividend Policy Dividend Policy Valuing Foreign Investment Exchange Rates and Interest Rate Parity Review Final Examination

1, 2, and 3 4 5 6 6 9 9 10 -4,5,6,9,10 7 7 8 8 12 13 13 14 15 -7,8,12,13,14,15 17 17 18 18 22 22 -Cumulative!!