Austin

FIN 305 Section 401/801 Fundamentals of Finance Summer 2015 Dr. Robert G. Schwebach and Dr. J. Kenton Zumwalt

Local contact person: Dr. Schwebach, 308 Rockwell Hall

Phone: 970.491. 5547 Fax: 970.491.7665 Email: [email protected]

IMPORTANT REGISTRATION INFORMATION Before starting this course you must:

1. Register for Aplia educational website (registration instructions appear on page 13 of the syllabus).

Your paid subscription includes:

access to the online text

practice tutorials and graded problem sets

Note: When registering for Aplia you will be prompted to enter your RamCT user name so that your Aplia

scores can be integrated with RamCT.

2. You must also complete an online Academic Integrity Statement in the form of an online RamCT quiz. This quiz

will not count toward your grade but it is required to stay in the course. Instructions are given in the syllabus, and

also in RamCT under Course Materials (click on Academic Integrity Statement).

If your online agreement is not submitted by Sunday, May 24, 2015, at 11:45 pm, then your access to future assessments in the course will be administratively blocked until you contact the instructor to arrange for manual submission of the form, and your score will be zero for any assignments that are missed due to blocked access.

Proctored Final Exam - Important Information

This course requires a proctored cumulative final exam. The final is open book/notes. You will need a financial calculator.

There will be approximately 3-4 questions from each chapter. The questions will be similar to the chapter quizzes in

RamCT. There will be a mixture of conceptual and questions and numerical problems.

Please note that the proctored final exam was added to the course after the time when the course was originally filmed.

Therefore the video lectures may state in a few places that there are no exams in the course; the current syllabus amends

any such statements. Please make a note of this change. If there are any discrepancies between the video lectures and

the course syllabus, the syllabus takes precedence in defining the course requirements.

Note: you will take the final exam online even though it is proctored. Procedural instructions for proctoring appear below.

Note: you will have access to Aplia during the final exam via clicking on embedded Aplia links in RamCT.

Procedural Instructions for Proctoring

Proctors are individuals who administer the exam process following the guidelines provided by Colorado State University to ensure academic integrity. In accordance with Colorado State University OnlinePlus proctoring guidelines, you have three options for having your online final exam proctored for this course. All three options require you to submit a Proctor Identification Form found at http://www.online.colostate.edu/proctoring/ at least two weeks prior to the first date the exam is available. The exam will become available on Mon., July 27 at 8:00 am; you must submit your form by Fri., July 10. Proctoring Options: Work with an eligible proctor external of Colorado State University. Your proctor selection is subject to approval. Please

review the eligibility guidelines found on the OnlinePlus website when selecting an external proctor. Any costs incurred due to using an external proctor are your responsibility.

Take the exam at an OnlinePlus facility in Fort Collins or Denver, or at the University Testing Center (UTC)* on-campus. Schedule an appointment at least three days before you need to take your exam. OnlinePlus offices do not charge for proctoring services. Contact OnlinePlus at (970) 492-4704 (Fort Collins) or (303) 573-6318 (Denver) or the UTC at (970) 491-6498 for more information.

Use ProctorU*, an online proctoring service, which requires a webcam and microphone. Schedule an exam with ProctorU at least four days before you need to take your exam.

*Costs may be associated and incurred to use the services of these entities. It is your responsibility to select an eligible proctor, schedule exams with your proctor, and abide by all rules for bringing only appropriate materials into the testing area. Mobile or other electronic devices are strictly prohibited. You will need to provide photo identification to your proctor prior to taking any exam. Appropriate identification includes: drivers license, CSU Student ID, passport, or other government issued photo identification. Visit the OnlinePlus website at http://www.online.colostate.edu/answers/services/proctoring.dot for more information about your proctoring options and eligible proctors.

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COURSE STRUCTURE. The class is organized on a 12-week schedule with online assignments and quizzes required for each chapter (with approx. 5 days between deadlines), as shown in the Weekly Assignment Schedule starting on page 9. Assignment Deadlines. All problem sets and quizzes are due at 11:45pm on the designated due date, starting with

the first deadline on Sunday, May 24 (note: chapter assignments include BOTH Aplia and RamCT exercises). Reference Time Zone. All due dates and times refer to US & Canada Mountain Time Zone (Greenwich Mean

Time minus 07:00).

COURSE OBJECTIVE. This course covers: the role of finance in the management of the firm; the structure of financial markets and institutions; and valuation of basic securities.

COURSE FORMAT. The course is delivered online using RamCT; the course homepage is located at ramct.blackboard.com. To logon to this site, use your RamCT user name which is the same as your eID that was provided to you by the CSU Division of Continuing Education. In addition to RamCT, the course also uses an educational website called Aplia which requires a paid subscription (see ordering instructions below). All course materials, except for the required financial calculator, are provided online via RamCT or Aplia. Videotaped lecture/discussions of each chapter are provided in on-demand streaming video in RamCT. Generally, these lectures are designed to provide insight and understanding of text material. It is, therefore, important for you to read the assigned textbook material prior to viewing the lecture/discussions.

Communication Protocol 1. For Technical Issues within RamCT: If you experience technical problems in RamCT, please contact the College of

Business web development team directly at: [email protected]

2. For Aplia Support: If you experience technical problems in Aplia please contact the company directly at: http://support.cengage.com/magellanweb/ClassLandingPage.aspx?OptyId=1-1XWIH1T. Alternatively, you can click on Support in Aplia, and choose either the E-mail option or the Live Support Chat

option. Or you can e-mail Aplia technical support directly at: http://www.aplia.com/support/

3. For Content-Related Issues: For issues related to course content, please contact Professor Schwebach; his contact information appears at the top of the syllabus.

REQUIRED COURSE MATERIALS:

Please note: The course interface will consist of both RamCT and a subscription-based educational website called Aplia that

includes the online text. Please note that there for each chapter are required assessments in both Aplia and RamCT.

Aplia website and Online Text. The required text is Fundamentals of Financial Management, Concise 7th Edition by Eugene F. Brigham and Joel F. Houston, Thomson South-Western, 2012. An electronic version of the text is included with your Aplia subscription.

Aplia Ordering Instructions. Please see page 13 of the syllabus for Aplia ordering instructions. Note that when you register your Aplia product for this class using the course key shown on page 13, you will be prompted to enter your eID (i.e., your RamCT user name) so that your Aplia scores can be integrated with RamCT. Note that your eID is not the same thing as your numeric student ID number. Please be sure to enter you eID and not your numeric ID number.

About Aplia. Aplia contains interactive tutorials and problem sets that will comprise a significant portion of your course grade. These exercises are designed specifically for the Brigham-Houston text. Aplia is part of Cengage and can be accessed at: http://login.cengagebrain.com/ or www.aplia.com.

Financial Calculator. You will need a financial calculator beginning with chapter 5. The two suggested models are: Texas Instruments BA-II Plus (recommended); or Hewlett-Packard HP 10BII. Interactive tutorial instructions for using these particular models are provided as part of the Aplia problem sets (as extra credit modules). All of the examples and assignments in the course will assume you are using one of these two models, however the BA-II Plus is recommended; the video lectures will generally use the notation of the BA-II Plus.

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GRADING: Grades will be based on the following components: Possible Points

Academic Integrity Quiz

(due on Sunday, May 24) 0

This quiz is not graded but it is required to stay in the course.

Instructions for taking this quiz appear on page 12 of the syllabus.

Quiz over Course Syllabus

(due on Sunday, May 24) 10

This timed quiz (20 minutes) tests your reading and comprehension

of the course syllabus; read syllabus completely before starting quiz.

Aplia Problem Sets

(Chapters 1-14) 456

Untimed problem sets worth 38 points each; only the top 12 of 14

scores will count toward course grade.

RamCT Chapter Quizzes

(Chapters 1-14) 480

Timed quizzes (40 minutes) worth 40 points each; only the top 12 of

14 scores will count toward course grade.

Comprehensive Final Exam

(RamCT) 54 Timed (90 minutes) Proctored Final Exam worth 54 points

Total 1000

Aplia Extra Credit Modules

(Chapters 1, 3, 4, 5, 8) 25

Five untimed extra credit problem sets worth 5 points each; selected

chapters only.

GENERAL POLICIES. Please familiarize yourself with the following general policies. They are strictly enforced to ensure fairness to all students in terms of treatment. Course Grades. Letter grades will be assigned on the basis of total course points as follows: A: 900-1000 B: 800-899 C: 700-799 D: 600-699 F: 0-599

The instructor reserves the right to curve scores. The optional plus/minus grading system will not be used. Academic Honesty. Simply put, dont cheat in this class. It is not necessary and is the most likely reason for failing the

course. Cheating in any form will result in a letter grade of F for the semester. Note that if you are taking the course for academic credit, then the grade is recorded on your official CSU transcript.

It is not considered cheating to use your textbook or lecture notes on RamCT quizzes or Aplia problem sets. In fact we encourage you to use your text during these exercises, as their purpose is not only to test your comprehension but also to help you learn the material. All assignments including chapter quizzes are open book/open notes. However, note that all graded assignments are strictly individual exercises; collaboration is not allowed.

Feedback on Submitted Assignments. Both RamCT quizzes and Aplia problem sets provide feedback on selected problems and questions showing correct mathematical steps and/or verbal explanation of the solution. However, RamCT and Aplia differ in terms of when feedback becomes available, as described in the next bullet point.

Availability of Assignments and Solutions. Note the following differences between Aplia and RamCT: In RamCT there are two types of quizzes: Chapter quizzes; and a Syllabus quiz. For all types, the questions do not appear

until you actually begin taking the quiz; however feedback and a numerical score are provided immediately once you submit your answers. Note these are timed quizzes. For details on RamCT quiz procedures see below. RamCT chapter quizzes will become available incrementally as the semester progresses; generally they will be released approximately ten days prior to their respective due dates.

In Aplia, there are two types of problem sets. Practice problem sets (which are ungraded) are always available and provide immediate feedback each time you submit answers to practice problems. Graded problem sets can be revisited and you can change your answers as often as you wish up until the due date. Therefore, feedback on graded homework is not provided until the assignment deadline passes. Graded problems sets will be made available during the semester - generally about ten days prior to each due date. For details on Aplia procedures see below.

Questions and Problems from the Text. To self-test your comprehension and to prepare for graded assignments, you should study and practice the questions and problems from the textbook, including each of the following types:

Self-Test questions and problems appearing within each chapter at the end of every section when reading the chapter, you should pause at the end of each section and try to answer these before going on to the next section.

Quick Questions appearing within key chapters designed to get the reader actively involved when reading the text. End-of-chapter Self-Test Questions and Problems detailed solutions appear in Appendix A of the text. End-of-chapter Questions detailed answers to these questions are posted in RamCT (click on Text Answers). End-of-chapter Problems selected answers appear in Appendix B of the text. In addition, detailed solutions for

selected problems are posted in RamCT (under Text Answers) and some of these selected problems are also solved in

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video tutorials called Problem Solving Labs that are described on the next page. Specific problems are not assigned, however you can work as few or as many problems as desired to test your understanding and for practice. Generally the more problems you work, the better your quiz performance. To streamline your studying, it is recommended that you focus on those problems for which solutions are provided under Text Answers and/or in the Problem Solving Labs.

Makeup Assignments. There are no makeup assignments in this class. This policy applies to both Aplia and RamCT. You need to complete graded materials by the due date. If you miss an assignment, the nature of the course will not permit a makeup so please dont miss an assignment.

We realize there will be cases when a student is unable to complete an assignment on time due to a technical glitch such as a computer crash or ISP failure, or for personal reasons such as family emergency. To allow for such cases you will have two free passes for Aplia problem sets, and two free passes for RamCT chapter quizzes, allowing you to skip up to two assessments of each type without affecting your grade.

You do not need to notify the instructor to use a free pass. Rather, if you miss a deadline for any reason including ISP failure, then one of your free passes will automatically apply. Once your free passes are used up, you will receive a score of zero for any additional missed assignments. Therefore, be careful not to waste your free passes on avoidable situations. To avoid last minute computer problems, we suggest that you read the chapters and do the assignments early, rather than waiting until the last minute. If you do not exercise your free passes, then your grade will simply be based on your highest 12 of 14 Aplia assignments and your highest 12 of 14 RamCT chapter quizzes. (Note: you are not allowed a free pass for the Syllabus Quiz.)

RAMCT OVERVIEW: This course is fully supported on RamCT. You may download class materials such as class lecture slides and the course syllabus. It is recommended that you download course materials early in the term and store them on your hard drive. Video lectures are provided in the form of on-demand streaming video. When you login to RamCT, you can access the content of this course by clicking on the "Course Materials" button which will be visible on the Course Homepage.

Selected Links in RamCT: Syllabus. Clicking on this link takes you to the course syllabus, which you should print out and read thoroughly. Academic Integrity Statement. This link displays a copy of the Academic Integrity Form and submission procedures. Text Answers. Click on this link to download a copy of the solutions to all end-of-chapter questions, and selected

numerical problems, from the Brigham-Houston text. Financial Calculator Notes. Under this link the instructors have posted their own concise user guides showing how to

implement basic time value of money calculations for several popular calculator models including the recommended Texas Instruments BA-II Plus and the Hewlett-Packard HP 10BII. This material is strictly optional and is not required reading, but is provided as additional reference material for your convenience if needed.

List of Assignments. Click on desired chapter under Course Materials to see a listing of assignments for each chapter with links to assessments and homework exercises.

Additional Links at Bottom of Page under Course Materials: Grades. Your grade information is posted here. Aplia grades will be transferred over to RamCT weekly. Calendar. Displays a calendar of assignment due dates. Announcements. Occasionally the instructor may post announcements to the class. You will be prompted each time

when you logon if there are any new announcements since your last login. E-Mail Instructor. Use this link to contact the instructor for issues related to course content. COB Homepage. Link to College of Business Homepage. E-Mail for Help. Use this link to contact the College of Business technical support staff for issues related to using

RamCT or navigating the course website.

CHAPTER QUIZZES. For each assigned chapter of the text (chapters 1-14) there is a RamCT chapter quiz. The chapter quizzes are worth 40 points each, and will expire at 11:45 pm on the due date.

Each chapter quiz has a 40 minute time limit. You may take each quiz only once. You may access your old quizzes at any time for study purposes. If you miss a quiz deadline, your score on that quiz will be zero. No quiz will be extended past the deadline for any reason, including computer crashes or ISP service interruption. The top 12 out of 14 quiz scores will count toward your course grade.

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Quiz questions will be multiple choice format. Some questions will be strictly conceptual and others will require numerical calculations. Generally you will need a financial calculator for the quizzes. All material from the textbook and/or the video lecture is fair game for a quiz, even if it is not covered in both places. Quizzes may be taken on an open-book condition (subject to the terms specified on the Academic Integrity Form). Sufficient time is allowed to look up at least some answers from the textbook or lecture notes, but probably not all of them.

Note that the number of questions on each quiz may vary, and the point values per question may also vary depending on the length and/or difficulty of the questions. For example, numerical questions or lengthy conceptual questions may be worth relatively more points compared to brief conceptual questions or simple true/false questions.

PROBLEM SOLVING LABS. In RamCT, for chapters 3-14 there are Problem Solving Labs consisting of informal videotaped sessions in which selected end-of-chapter problems from the text are solved in detail by the instructors. We added this feature to the course in response to frequent comments by students that they would like to see more examples of problems being worked. Note that the Problem Solving Labs are not assessments; they are simply illustrative examples provided to help you master the material and improve your quiz scores. In addition to watching the videos, you can also download transcripts and annotated slides of these video sessions.

To access the Problem Solving Labs: Click on the appropriate chapter under "Course Materials" To view the video click on " Play Video for Problem Solving Lab " To download a transcript click on "Problem Solving Lab Transcript" To download annotated slides click on "Problem Solving Lab Slides"

PROBLEM SOLVING LABS (continued)

Please note the following Note that the Problem Solving Labs in RamCT are based on a previous edition of the text (6e) whereas the current text

version in Aplia is 7e. We retained the PSL solutions from the 6th edition because most of the numbered problems are the same in both editions; therefore instead of videotaping the same problems over again it was more efficient to simply re-use the prior videos and point out the few places where there are minor differences.

The differences are as follows: As listed in PSL (6e) Correspondence to online Aplia text (7e)

Chapter 3, #1 Appears as #2 in 7e.



Chapter 3, #6 Appears as #10 in 7e; financial stmts are labeled with different dates.

Chapter 3, #7 Appears as #12 in 7e; financial stmts are labeled with different dates; PSL solution covers

only parts a-c; whereas 7e includes an additional part d. Chapter 4, #5 This question was modified significantly; the 6e version does not appear in 7e.

Chapter 10, #9 7e says to solve using market value weights; whereas 6e says to use book value weights.

Chapter 13, #5 Part a is new in 7e; parts b-d in 7e are labeled as a-c in 6e. Chapter 14, #7 Financial statement information is labeled with different dates.

Remember that detailed solutions for selected text problems (7e) can also be found in the solutions manual that is posted in RamCT under the Text Answers link. Note that the PSL problems are only a subset of those included in the solutions manual, and you should study the solutions manual as well as the PSL videos.

APLIA EDUCATIONAL WEBSITE: For each chapter you will need to complete a 38-point Aplia assignment covering that chapters lecture topic. In addition, for selected chapters there are optional extra credit assignments worth 5 points each. To access the Aplia assignments, you can follow links under Course Materials in RamCT, or alternatively you can access Aplia directly at www.aplia.com. It is recommended that you close out of RamCT while you are working in Aplia. Aplia Payment Grace Period. In the first few weeks of the course there is a grace period during which you may register

and use the website without paying the fee. If you are considering dropping this course during the drop/add period, do not make a payment until you are sure. You will need to pay the full amount before the end of the grace period to continue using the site. You may pay online with a credit card or personal check, or you can mail a check or money order to the address provided on the Aplia website. You can begin using the website once you register, even if you have not paid yet. (However, note that if you fail to complete your online submission of the Academic Integrity Form by the

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required due date of May 24, then your access to the Aplia website may be administratively blocked by the professor regardless of your Aplia payment status.)

Aplia Problem Sets. In Aplia, you can view each chapters assignments by clicking on the appropriate chapter. The assignment list for chapter 1 appears below. The due date (May 24) is shown in the first column; the online chapter is labeled as a reading assignment; an extra credit module in week 1 explains how to use Aplia.

due

date online

chapter

extra credit

module

For each topic you will notice there are two problem sets; the first one is for practice and the second one is graded. The practice modules will help you learn the material but are not included in your graded homework score. Simply use the practice modules for practice and to check your understanding of the material. Once you are confident in your mastery of the material, then go to the graded problem set, referring back to the practice problems only as needed. The practice modules along with studying the text and video lectures and Problem Solving Labs will help you prepare for the graded modules. Feedback on the graded component will become visible after 11:45pm on the due date.

Timing of Feedback on Graded Problem Sets. Because Aplia does not provide feedback on graded assignments until the due date has passed, this means that while you can still work ahead in Aplia if desired, you will not be able to see your scores until each due date.

Aplia Grading. Aplia problem sets will include a range of problem types, from multiple choice to interactive graphing. Problem sets will vary in length and in the number of Aplia points per assignment. In order to equally-weight each chapter, we normalize each of your Aplia scores to a 38-point scale (we normalize extra credit modules to a 5-point scale) prior to reporting your scores on RamCT. Example: suppose an Aplia assignment is worth 18 points and you earn 14 points. Your score in Aplia will appear as 14/18. But your normalized score in RamCT will appear as 29.56 out of 38 points [computed as: (14/18)*38 = (77.78%)*38 = 29.56]. Normalized scores from Aplia will be transferred to RamCT periodically, generally within a day or two after the due date has passed.

Extra Credit Assignments. Selected chapters will have extra credit assignments. These are labeled Extra Credit and are worth 5 points each. These modules cover foundational concepts that you should review prior to studying the chapter, such as Review of Accounting, Review of Statistics, etc. In week 1 there is an extra credit module designed to familiarize you with different types of question formats and procedures in Aplia. For chapter 5 there are two practice modules, corresponding to different calculator models (Texas Instruments BAII-Plus and Hewlett Packard HP 10BII); however, there is only one graded module which does not depend on the calculator model.

Graded Problem Sets. Graded problem sets have a firm due date and are worth 38 points each. They are not timed, and you can change your answers as many times as you like prior to the due date. However, once the due date occurs your grade becomes permanent and you cannot change any answers or complete any unfinished problems at that point. In other words, you will no longer be able to save any answers once the due date occurs. The software does not care whether you have an excuse or not. Do these assignments early enough to avoid any emergencies that might prevent your completion before the due date. After the due date, you will be able to see the correct answers and the explanations for graded problems. Problem sets will expire at 11:45 pm on the due date. Only the top 12 scores out of the 14 problem sets will count toward your course grade. Graded problem sets are open-book but are strictly individual assignments and are subject to terms specified on the Academic Integrity Form.

Weekly Scheduled Maintenance/Downtime. Aplia reserves a weekly maintenance window for four hours each weekend from Midnight Pacific Time (GMT-8:00) on Friday night until 4:00 AM Pacific Time on Saturday morning. During this time, the Website may be unavailable to Users.

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Summary of Course Deadlines: All assignments are due at 11:45pm on the designated date.

TIPS FOR SUCCESS

Learning in an Online Environment: It is important to note that the absence of a classroom instructor may lull you into a false sense of abundant time to prepare for assignments. That is NOT the case. All assignments have deadlines intended to push you to regular completion of your reading and other assignments. If you have not read a chapter before the assignments are due, then you will do poorly on them. Therefore you must read your text regularly, and follow the Weekly Assignment Schedule which is given on pages 9-11.

The video-based lectures and Aplia problem sets are major sources of learning that parallel the textbook and provide you with opportunities to interact with the materials and discover more meaning to the concepts being studied. We advise you to keep up by working with an established schedule for this class.

Course Introduction Video: Before starting the learning modules, sure to watch the Introduction video in RamCT which advises you on what to expect and how to succeed in the course. To access this video, from the course homepage click on "Course Materials," then click on the Introduction link, and select Play Course Introduction Video.

For additional tips and information about the distance learning environment in general, note that in RamCT under Course Materials there is also a link where you can click to see suggested tips on taking an online course. Click on the Distance Learning Course link. Recommended Study Plan for FIN 305: Success in any online course depends heavily on your willingness to establish and maintain a schedule for studying the materials and completing activities such as homework, quizzes and exams. For your consideration we present a representative study plan for this course.

Recommended time spent for each chapter Reading and studying text; viewing video lecture 3-4 hours Viewing Problem Solving Lab videos (chapters 3-14) 1-3 hours Aplia Extra Credit (selected chapters) 1 hour Aplia Practice Problem Set 1-3 hours RamCT chapter quiz 1 hour Aplia Graded Problem Set 1-3 hours Total 8-15 hours

It is strongly recommended that you buy a daytimer, and organize each day so that you know exactly when you will study for each class you have, and for how long, while still completing other activities you have, such as working and spending time with your family. It is recognized that some learners may need to spend less time, and others more time learning the materials, or that some may need extra time with reading and less time with homework, and so forth. But a scheduled study plan is essential for success in this course.

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CHAPTER LEARNING OBJECTIVES

Before reading each chapter you should read the learning objectives and keep them in mind when studying the material. Chapter 1. An Overview of Financial Management

1. Describe how finance is used in the business world and the relationship of finance to other business disciplines. 2. Differentiate between the four main forms of business organization and describe advantages and disadvantages of

each one. 3. Identify the primary goal of financial managers and describe the role of ethics and social responsibility in pursuing

this goal. 4. Identify and explain potential conflicts between stockholders and managers, and describe useful motivational tools

that can help to prevent these conflicts.

Chapter 2. Financial Markets and Institutions

1. Describe the importance of financial markets in the economy. 2. Explain the role of financial institutions in the capital allocation process. 3. Distinguish between different types of markets and different classifications of stock market transactions. 4. Explain the Efficient Markets Hypothesis (EMH), identify the three levels of efficiency, and discuss implications of

market efficiency.

Chapter 3. Financial Statements, Cash Flow, and Taxes

1. Construct basic financial statements including income statement and balance sheet. 2. Estimate a firms free cash flow and understand why free cash flow has such an important effect on firm value. 3. Differentiate between free cash flow and accounting profit. 4. Understand the basics of the federal income tax system. 5. Understand and explain the differential tax treatment of dividends and interest paid, and interest and dividend

income received.

Chapter 4. Analysis of Financial Statements

1. Explain why ratio analysis is usually the first step in the analysis of a companys financial statements. 2. List the five different types of financial ratios and how to compute and interpret them. 3. Explain how benchmarking, trend analysis and the Du Pont equations are used in ratio analysis. 4. Identify limitations of ratio analysis and qualitative factors to consider when evaluating a companys financial

performance.

Chapter 5. Time Value of Money

1. Perform time value of money calculations for lump sum dollar amounts, annuities, perpetuities, and uneven CFs. 2. Solve for unknown interest rate, number of periods, payment amount, present value or future value. 3. Distinguish between ordinary annuities and annuities due. 4. Distinguish between nominal, periodic and effective interest rates. 5. Construct loan amortization schedules.

Chapter 6. Interest Rates

1. Identify the determinants of interest rates and factors affecting interest rates. 2. Define term structure of interest rates and graph a yield curve for a given set of data. 3. Understand the Pure Expectations Hypothesis and compute implied forward rates. 4. Describe international risk factors and country risk premiums.

Chapter 7. Bonds and Their Valuation

1. Identify the key characteristics of bonds. 2. Calculate the value of a bond with annual or semiannual interest payments. 3. Calculate the yield to maturity, the yield to call, and the current yield on a bond. 4. Differentiate between interest rate risk, reinvestment rate risk, and default risk.

Chapter 8. Risk and Rates of Return

1. Explain the meaning of investment risk and how it is measured. 2. Distinguish between market risk and firm-specific risk. 3. Explain the principle of diversification and its implications for security pricing. 4. Perform calculations using the capital asset pricing model (CAPM). 5. Compute basic statistical parameters of return distributions.

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Chapter 9. Stocks and Their Valuation

1. Perform stock valuations and compute expected returns using the constant growth dividend discount model. 2. Compute dividend yield and capital gains yield. 3. Understand and apply non-constant growth dividend discount models including supernormal growth. 4. Define and explain concepts of stock market equilibrium and marginal investor. 5. Understand and apply preferred stock valuation model.

Chapter 10. The Cost of Capital

1. Define weighted average cost of capital and explain its relevance. 2. Compute component cost of capital for debt, common equity and preferred stock. 3. Compute weighted average cost of capital. 4. Understand and explain how component costs are adjusted to account for flotation costs.

Chapter 11. The Basics of Capital Budgeting

1. Apply basic capital budgeting decision tools including payback, net present value, IRR and MIRR. 2. Compare and contrast various capital budgeting decision tools. 3. Use capital budgeting tools to analyze independent or mutually exclusive projects 4. Construct and/or draw conclusions from NPV Profile graphs

Chapter 12. Cash Flow Estimation and Risk Analysis

1. Formulate relevant cash flows and apply decision analysis to capital budgeting problems. 2. Identify incremental cash flows and types of project risk. 3. Include inflation effects in project analysis. 4. Demonstrate sensitivity and scenario analyses and explain Monte Carlo simulation. 5. Explain how real options analysis is used in the context of capital budgeting

Chapter 13. Capital Structure and Leverage

1. Distinguish between business and financial risk. 2. Explain the effect of capital structure on the companys WACC and stock price. 3. Compute levered and unlevered betas. 4. Briefly explain what is meant by a firms optimal capital structure. 5. Explain the Modigliani-Miller Irrelevance Theory and the Signaling Theory of capital structure.

Chapter 14. Distributions to Shareholders: Dividends and Share Repurchases

1. Describe modern theory of corporate dividend policy. 2. Explain how dividend policy is applied in practice. 3. Identify factors affecting dividend policy. 4. Understand the effects of stock repurchases and list advantages and disadvantages of repurchases.

WEEKLY ASSIGNMENT SCHEDULE:

Due Date

Material Covered

Assignments complete them in the order listed

(All assignments due by 11:45 pm on the due date)

Sunday

Preliminary Material

Preliminariescomplete the following items before beginning any subject-related material: Complete online Academic Integrity Form (due on May 24) Complete Quiz over Syllabus (due on May 24) View Introduction video in RamCT

May 24 (Ch 1)

Chapter 1 An Overview of

Financial Management

Read Chapter Objectives Study textbook (including questions and problems) View video lecture Complete Aplia Digital Book Tutorial for Aplia Text (ungraded) Complete Aplia extra credit I and II (Introduction to Using Aplia) Complete Aplia problem set I (practice set) Take RamCT chapter quiz Complete Aplia problem set II (graded set)* *Note: in general, you can choose to do the Aplia graded set before or

after the RamCT chapter quiz.

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Saturday May 30 (Ch 2)

Chapter 2 Financial Markets and

Institutions

Read Chapter Objectives Study textbook (including questions and problems) View video lecture Complete Aplia problem set I (practice set) Take RamCT chapter quiz Complete Aplia problem set II (graded set)

Thursday June 4 (Ch 3)

Chapter 3 Financial Statements, Cash Flow, and Taxes

Read Chapter Objectives Study textbook (including questions and problems) View video lecture and Problem Solving Lab Complete Aplia extra credit I and II (Accounting Review) Complete Aplia problem set I (practice set) Take RamCT chapter quiz Complete Aplia problem set II (graded set)

Tuesday June 9 (Ch 4)

Chapter 4 Analysis of Financial

Statements

Read Chapter Objectives Study textbook (including questions and problems) View video lecture and Problem Solving Lab Complete Aplia extra credit I and II (Mathematics Review) Complete Aplia problem set I (practice set) Take RamCT chapter quiz Complete Aplia problem set II (graded set)

Sunday June 14 (Ch 5)

Chapter 5 Time Value of Money

Read Chapter Objectives Study textbook (including questions and problems) View video lecture and Problem Solving Lab Complete Aplia extra credit I (Financial Calculator Functions)* Complete Aplia extra credit II (Financial Calculator Functions)** Complete Aplia problem set I (practice set) Take RamCT chapter quiz Complete Aplia problem set II (graded set) *Choose either practice module: TI BAII-Plus or HP 10BII. **Graded module does not depend on calculator model.

Friday June 19 (Ch 6)

Chapter 6 Interest Rates

Read Chapter Objectives Study textbook (including questions and problems) View video lecture and Problem Solving Lab Complete Aplia problem set I (practice set) Take RamCT chapter quiz Complete Aplia problem set II (graded set)

Thursday June 25 (Ch 7)

Chapter 7 Bonds and Their

Valuation


Tuesday June 30 (Ch 8)

Chapter 8 Risk and Rates of

Return

Read Chapter Objectives Study textbook (including questions and problems) View video lecture and Problem Solving Lab Complete Aplia extra credit I and II (Statistics Review) Complete Aplia problem set I (practice set) Take RamCT chapter quiz Complete Aplia problem set II (graded set)

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Wednesday July 8 (Ch 9)

Chapter 9 Stocks and Their

Valuation


Friday July 10

Deadline for submitting Proctor Identification Form.

Monday July 13 (Ch 10)

Chapter 10 The Cost of Capital


Saturday July 18 (Ch 11)

Chapter 11 The Basics of Capital

Budgeting


Thursday July 23 (Ch 12)

Chapter 12 Cash Flow Estimation

and Risk Analysis


Tuesday July 28 (Ch 13)

Chapter 13 Capital Structure and

Leverage


Sunday Aug 2

(Ch 14)

Chapter 14 Distributions to Shareholders:

Dividends and Share Repurchases


Friday Aug 7

(all chapters) Course Summary

View Course Summary and Conclusion video (there is no chapter quiz associated with the course summary) Take Proctored Final Exam

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REGARDING FINAL WEEK OF COURSE. Note that on the last due date (Aug 7) there are two activities for you to complete in RamCT: 1. Course Summary and Conclusion Video this videotaped lecture summarizes the course. There is no assessment;

simply watch the video which reviews the course and ties together the main concepts from chapters 1-14. 2. Proctored Final Exam see instructions above.

WALL STREET JOURNAL SUBSCRIPTIONS. (Optional) Although it is not required for this course, as a courtesy we offer special educational subscription rates to the Wall Street Journal for students of FIN 305. Again, this is strictly optional and specific articles will not be discussed in class, however we believe that, in general, reading the Journal on a regular basis improves your overall knowledge and understanding of business concepts and therefore it is recommended reading for all business students. To register go to the following web address: http://subscribe.wsj.com/semester and follow the instructions (you will be asked to enter the first three digits of the school zip code for CSU the first three digits are 805). For the instructor name enter Professor Schwebach. Note that you will not need to give any credit card information over the internet; the WSJ will bill you directly through regular mail if desired. Educational rates include both the print edition and an online subscription to WSJ. When you register online you will gain immediate access to the online WSJ. If you have questions, please contact the Journal directly at 1-800-JOURNAL (1-800-568-7625).

DISCLAIMER:

Any errors or omissions in this syllabus are unintentional. The instructors reserve the right to make corrections or modifications as needed, at their discretion, and will announce any such changes to students on a timely basis.

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How to access your Aplia course

FIN 305 Fundamentals of Finance - Summer 2015 Instructor: Robert Schwebach

Start Date: 05/18/2015

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Austin

Documents

Transcript of Austin