COLLEGE: RVR-COB DEPARTMENT: ACCOUNTANCY

COURSE CODE: ACFINA2

COURSE TITLE: FINANCIAL MANAGEMENT II
CLASS SCHEDULE: ________________________________________ ROOM: ________
NAME OF PROFESSOR: ____________________________________
CONTACT INFORMATION: _________________________________
CONSULTATION HOURS: ___________________________________

COURSE DESCRIPTION:
This course ACFINA2, Financial Management 2 for BSA Students, is a continuation of Financial Management 1. It
covers the more complex aspects of financial decisions such as valuation of financial assets, risk and return, medium
to long term investments, capital structure, dividend policy and hybrid securities.

LEARNING OUTCOMES:

UNIVERSITY
EXPECTED GRADUATE OUTCOMES (GO)
LASALLIAN On completion of the program, the
GRADUATE student is expected to be able to:
ATTRIBUTES
(ELGA)
Effective communicator GO7: Assess the various functions of
management and apply the related
Reflective Lifelong concepts that underlie each of the
Learner functional areas of business with
respect to local, regional (ASEAN)
Critical and Creative and global situations
Thinker
GO10: Advocate Lasallian values of
faith, zeal for service, and communion
in mission, professional values and
business ethics in all aspects of
accounting work
COURSE OUTCOMES (CO)
On completion of the course, the student is
expected to be able to:
CO1: Discuss the meaning of risk and return,
how they affect the cost of capital and
valuation of assets, and valuation of securities;
make decisions based on professional ethical
principles and practice standards.
CO2: Explain the steps in the capital
budgeting process and apply non-discounted
and discounted cash flow techniques in
evaluating investments; make decisions based
on professional ethical principles and practice
standards.

GO6: Conduct accounting research
through independent studies of
relevant literature and appropriate use
of interdisciplinary theory and
methodologies
CO3: Evaluate and distinguish the various
sources of long-term financing and identify an
optimal capital structure in relation to the
objective of maximizing the value of the firm;
make decisions based on professional ethical
principles and practice standards.

CO4: Discuss the key factors involved in

establishing a dividend policy, the types of
dividend policies, and explain stock splits and
stock repurchases and the firm’s motivation for
undertaking them; make decisions based on
professional ethical principles and practice
standards.

CO5: Describe the types of hybrid securities

and their features.

CO6: Apply critical thinking skills in relating

learned concepts to a local company or to
contemporary financial issues in the Philippine
setting.

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FINAL COURSE OUTPUT:

As evidence of attaining the above learning outcomes, the student is required to do and submit the following during
the indicated dates of the term:

COURSE OUTCOMES REQUIRED OUTPUTS DUE DATE

CO1: Discuss the meaning of risk and return, how they affect At least five (5) solved problems Weeks 1 to 13
the cost of capital and valuation of assets, and valuation of every meeting
securities; make decisions based on professional ethical
principles and practice standards.

CO2: Explain the steps in the capital budgeting process and

apply non-discounted and discounted cash flow techniques in
evaluating investments; make decisions based on professional
ethical principles and practice standards.

CO3: Evaluate and distinguish the various sources of long-

term financing and identify an optimal capital structure in
relation to the objective of maximizing the value of the firm;
make decisions based on professional ethical principles and
practice standards.

CO4: Discuss the key factors involved in establishing a

dividend policy, the types of dividend policies, and explain
stock splits and stock repurchases and the firm’s motivation
for undertaking them; make decisions based on professional
ethical principles and practice standards.

CO5: Describe the types of hybrid securities and their

features

CO2: Apply critical thinking skills in relating learned Group term paper Week 14
concepts to a local company or to contemporary financial
issues in the Philippine setting.

RUBRICS FOR ASSESSMENT:

1. Solved Problems

CRITERIA EXEMPLARY SATISFACTORY DEVELOPING BEGINNING

(100) (90) (80) (70) RATING
Completeness The student The student submitted The student The student
(80%) submitted solutions to at least submitted solutions submitted
complete and three-fourths of the to at least one-half solutions to less
detailed solutions assigned problems. of the assigned than one-half of
to the assigned problems. the assigned
problems. problems.
Format and The student The student presented The student The student
neatness presented solutions neatly and presented solutions presented
(10%) solutions neatly followed proper neatly and followed solutions neatly
and followed accounting format in proper accounting and followed
proper at least three-fourths format in at least proper
accounting of the assigned one-half of the accounting
format. problems. assigned problems. format in less
than one-half of
the assigned
problems.
Time The student The student submitted The student The student
management submitted the the solutions within submitted the submitted the
(10%) solutions on time. one hour after class. solutions later than solutions the
one hour after class following day or
but within the day. later.

TOTAL:

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2. Group Term Paper

EXEMPLARY SATISFACTORY DEVELOPING BEGINNING

CRITERIA (100) (90) (80) (70) RATING
Discussion and Discussion and One problem is One problem is No analysis is
Analysis thoughtful analyzed analyzed; done or no
(40%) analysis includes thoughtfully OR relevant financial relevant
two to three stated two or more analysis is financial
problems; problems are applied (financial analysis is
relevant financial covered ratios or other applied
analysis is applied superficially; financial analysis
(financial ratios or relevant financial approach)
other financial analysis is applied
analysis approach) (financial ratios or
other financial
analysis approach)
Recommendations Offers Offers Offers None offered
(30%) recommendation recommendation recommendation,
that takes all and provides at least but does not offer
information into 2 concrete reasons concrete reasons
account and offers
at least 5 concrete
reasons.
Format of Excellent Neatly presented Average Not well
Presentation and presentation and and well organized, organization with organized with
grammar organization. with few few grammatical many
(10%) Thorough analysis grammatical errors. and syntax errors. grammatical
is provided with Analysis of case is and spelling
no grammatical or well done. errors.
syntax errors
Observance of Submitted on time Late submission Late submission Late
submission and follows all the and/or observes and/or observes submission
deadline mechanics in 75% of the less than 50% of and/or does not
(10%) writing the paper. guidelines. the guidelines. comply totally
with any of the
mechanics.
Peer evaluation The student is The student is given The student is The student is
(10%) given an average an average grade of given an average given an
grade of 3.01 to 2.01 to 3.0 by grade of 1.01 to average grade
4.0 by his/her his/her peers 2.0 by his/her of 0.0 to 1.0 by
peers peers his/her peers

OTHER REQUIREMENTS AND ASSESSMENTS:

Aside from the final output, the student will be assessed during the term through the following:
• Quizzes
• Departmental final examination
• Class standing (homework, class participation, attendance, good manners and right conduct)

GRADING SYSTEM:

GRADE POINT DESCRIPTION PERCENTAGE

4.0 Excellent 97 – 100
3.5 Superior 94 – 96
3.0 Very Good 91 – 93
2.5 Good 87 – 90
2.0 Satisfactory 83 – 86
1.5 Fair 77 – 82
1.0 Pass 70 – 76
0.0 Fail Below 70

The student will be graded according to the following:

BASIS
Average Quizzes 50%
Departmental Final Examination 30%
Term Paper 10%
Class Standing 10%
TOTAL 100%

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LEARNING PLAN:

COURSE TOPICS WEEK LEARNING

OUTCOMES NO. ACTIVITIES

I. VALUATION OF FINANCIAL ASSETS

CO1: Discuss 1.1 Risk and Rates of Return 1 Read: Titman Ch.
the meaning of 1.1.1 Risk and Return Fundamentals 5 to 10
risk and return, 1.1.2 Risk of a Single Asset
how they affect 1.1.3 Risk of Portfolio Solve and discuss
the cost of 1.1.4 Correlation, diversification assigned exercises
capital and 1.1.5 The Capital Asset Pricing Model (CAPM) and problems in
valuation of Titman Ch. 5 to 10
assets, and
valuation of
1.2 Stock Valuation 2
securities; make
1.2.1 Characteristics of Common Stock
decisions based
1.2.2 Common Stock Valuation
on professional
1.2.3 Features and Types of Preferred Stock
ethical
1.2.4 Preferred Stock Valuation
principles and
practice
1.3 Valuation and Characteristics of Bonds 3-4
standards.
1.3.1 Valuation: The Basic Process
1.3.2 Types of Bonds
1.3.3 Bond Valuation
1.3.4 Bond Yields

II. INVESTMENT IN LONG-TERM ASSETS

CO2: Explain 2.1 Cost of Capital 4-6 Read: Titman Ch.

the steps in the 2.1.1 An Overview of the Cost of Capital 14
capital 2.1.2 The Cost of Long-term Debt (Bonds)
budgeting 2.1.3 The Cost of Preferred Stock Solve and discuss
process and 2.1.4 The Cost of Common Stock assigned exercises
apply non- 2.1.5 Weighted Average Cost of Capital (WACC) and problems in
discounted and 2.1.6 Marginal Cost and Investment Decisions Titman Ch. 4
discounted cash 2.1.6.1 Finding the Breakpoints
flow techniques 2.1.6.2 The Weighted Marginal Cost of Capital (WMCC)
in evaluating 2.1.6.3 The investment Opportunities Schedule (IOS)
investments; 2.1.6.4 Making Financing/Investment Decisions
make decisions
based on 2.2 Capital Budgeting and Cash Flow Principles 6-7 Read: Titman Ch.
professional 2.2.1 The Capital Budgeting Decision Process 12
ethical 2.2.2 The Relevant Cash Flows
principles and Solve and discuss
practice assigned exercises
standards. and problems in
Titman Ch. 12
2.3 Capital Budgeting Techniques 8-9 Read: Titman Ch.
2.3.1 Non-discounted Cash Flow Techniques 11
2.3.1.1 Payback Period
2.3.1.2 Accounting Rate of Return Solve and discuss
2.3.1.3 Payback Reciprocal assigned exercises
2.3.1.4 Bailout Payback and problems in
2.3.2 Discounted Cash Flow Techniques Titman Ch. 11
2.3.2.1 Net Present Value (NPV)
2.3.2.2 Present Value Index
2.3.2.3 Present Value/Discounted Payback Period
2.3.2.4 Internal Rate of Return (IRR)
2.3.2.5 Modified IRR (MIRR)
2.3.3 NPV-IRR Relationship
2.3.3.1 NPV Profile
2.3.3.2 Crossover rate
2.3.4 Capital Rationing and Project Selection
2.3.4.1 Project ranking
2.3.4.2 Problems in project ranking
2.3.4.2.1 Size disparity
2.3.4.2.2 Time disparity
2.3.4.2.3 Unequal lives
2.3.4.2.3.1 Annualized net present value or
equivalent annual annuity
2.3.4.2.3.2 Replacement chain

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 2.4 Capital Budgeting and Risk Analysis 9-10 Read: Titman Ch.
2.4.1 Risk and the Investment Decision 13
2.4.2 Incorporating Risk into Capital Budgeting
2.4.2.1 Breakeven Cash Inflow Solve and discuss
2.4.2.2 Risk-Adjusted Discount Rates assigned exercises
2.4.2.3 Certainty Equivalents and problems in
2.4.2.4 Simulation Titman Ch. 13
2.4.2.5 Sensitivity and Scenario Analysis
2.4.2.6 Probability Trees
2.4.3 Real Options in Capital Budgeting

III. CAPITAL STRUCTURE AND DIVIDEND POLICY

CO3: Evaluate 3.1 Analysis and impact of leverage 11-12 Read: Titman Ch.
and distinguish 3.1.1 Business and financial risk 15; Gitman Ch. 13
the various 3.1.2 Types of leverage
sources of long- 3.1.2.1 Operating leverage Solve and discuss
term financing 3.1.2.2 Financial leverage assigned exercises
and identify an 3.1.2.3 Total leverage and problems in
optimal capital Titman Ch. 15 &
structure in 3.2 Planning the Firm’s Financing Mix Gitman Ch. 13
relation to the 3.2.1 The Firms Capital Structure
objective of 3.2.2 EBIT-EPS approach to Capital Structure
maximizing the 3.2.3 Optimal Capital Structure
value of the
firm; make
decisions based
on professional
ethical
principles and
practice
standards.

CO4: Discuss 3.3 Dividend Policy and Internal Financing Read: Titman Ch.
the key factors 3.3.1 Dividend Fundamentals 16
involved in 3.3.2 Factors Affecting Dividend Policy
establishing a 3.3.3 Types of Dividend Policies Solve and discuss
dividend policy, 3.3.4 Forms of Dividends assigned exercises
the types of 3.3.5 Stock Dividends and Stock Splits and problems in
dividend 3.3.6 Stock Repurchases Titman Ch. 16
policies, and
explain stock
splits and stock
repurchases and
the firm’s
motivation for
undertaking
them; make
decisions based
on professional
ethical
principles and
practice
standards

CO5: Describe 13 Read: Gitman Ch.

the types of 17
hybrid securities
and their IV. HYBRID SECURITIES - OVERVIEW Solve and discuss
features. assigned exercises
and problems in
Gitman Ch. 17
CO6: Apply 14 Submit group
critical thinking project paper
skills in relating
learned Departmental final
concepts to a examination
local company
or to
contemporary
financial issues
in the Philippine
setting.

Page 5 of 6
TEXTBOOK: Titman, S., Keown, A. & Martin, J. (2014). Financial Management Principles and Applications
(12th Edition). Boston: Pearson Education, Inc.

REFERENCES:

Brealey, R., Myers, S. & Allen, F. (2014). Principles of Corporate Finance (11th ed.). New York: McGraw-Hill.

Brigham, E. and Houston, J. (2013). Fundamentals of Financial Management (13th Edition). Singapore: Cengage
Learning Asia.

Gitman, L. and Zutter, C. (2015). Principles of Managerial Finance (14th Edition.). New York: Pearson Education,
Inc.

Horngren, C., Datar, S. & Rajan, M. (2014). Cost Accounting: A Managerial Emphasis, (15th edition). London:
Pearson Education, Inc.

Ross, S., Westerfield, R., Jordan, B., Lim, J. & Tan, R. (2012). Fundamentals of Corporate Finance (9th Edition).
New York: McGrawHill Education (Asia).

ONLINE RESOURCES:

• www.pearsonhighered.com
• www.pse.com.ph

CLASS POLICIES:

• POLICIES SPECIFIC TO THE COURSE:

o Only BSA students who had obtained a final grade of at least 2.0 in the course ACFINA1 are qualified to
take this course.

o This course is a prerequisite to the course ACFINA3 and MODULE 3.

o Shiftees to the BSA program would have to retake this course, even if he/she had already received a
passing grade in a Financial Management 2 course taken during his/her old degree program. For shiftees
out of the BSA program and into another business degree program, this course may be credited for a
Financial Management 2 course, subject to the requirements of the new degree program being shifted into.

o Five (5) long quizzes is required in this course. There is no midterm examination.

o The final examination is departmental and covers the entire course syllabus. This is held for three (3) hours
during the Final Examinations Week (Week 14).

o Specific class policies on attendance, make-up quizzes, academic honesty, grading system, dress code,
classroom management, and others not mentioned above, are to be discussed by the faculty member on the
first day of classes.

• DEPARTMENT POLICIES:

o An application for special final examination should be accomplished by the student if there are conflicts in
the final examination schedule, following the University policies on order of priority.

o Please observe office hours and consultation hours/schedule of the faculty member. The Accountancy
Department is located at the Faculty Center, ground floor. When inside the Department, students are
expected to observe silence, and maintain the cleanliness and orderliness of the room.

o For student concerns regarding the BSA program or the course, please set an appointment with the
Department Vice Chair. For all other inquiries, please visit the Accountancy Department. Important
announcements will be posted on the Accountancy Department bulletin board.

17July2015

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