9/21/2016

BASFIN1 COURSE DESCRIPTION

covers complex aspects of financial decisions such

as medium to long term investments, capital
budgeting, debt versus equity financing, cost of
capital, and valuation.

review of the basic principles, techniques, and

analytical tools needed in conducting financial
analysis using commonly-used financial statements
in evaluating and forecasting a business firms
financial performance

Risk and rates of return, including valuation of

bonds and stocks will also be discussed. These
concepts are applied to financial and non-financial
2-1
enterprises.
2013 Cengage Learning.
All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

Class Policies

2-2
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

9/21/2016

Attendance
Students are expected to attend their classes
and shall to adhere to the university policy
regarding the maximum allowable absences.

2-3
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

Conduct

Students are expected to demonstrate respect to

their professor and classmates.

Cellular phone should be turned off or placed in

silent mode.

Laptops are not allowed, unless specified that it is

part of the activity to be used in class. All students
are expected to partake in meaningful discussions
with the class. Any misconduct will be reported to
the Discipline Office.

2-4
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

9/21/2016

Required Materials and Learning Resources

The required texts are given below. Other reference

materials will be provided by the professor, if
applicable.

TEXTBOOK:
Brigham, E. & Houston, J. (2013). Fundamentals of
Financial Management. (13th Ed.). Cengage Learning

2-5
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

Required Materials and Learning Resources

REFERENCES:

Berk, J., DeMarzo, P., & Harford, J. (2013). Fundamentals of

Corporate Finance. (2nd Ed.). Boston: Pearson/Prentice Hall

McGuigan, J.R., Moyer, R.C., Rao, R. &, Kretlow, W.J. (2012).

Contemporary Corporate Finance. (12th Ed.).

Smart, S.B. & Graham, J.R. (2012). Introduction to Financial

Management. (3rd Ed.) Cengage Learning

Titman, S., Keown, A.J., & Martin, J.D. (2011). Financial

Management: Principles and Applications. (11th Ed.). Boston:
Pearson/Prentice Hall

2-6
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

9/21/2016

Submission of requirements

ABSOLUTELY NO LATE SUBMISSION WILL BE

ALLOWED. No make up exam for any submitted
work (seatwork, assignment, quiz, midterms, final
exam) unless duly approved as provided in the
Students handbook. .

2-7
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

Policy on Cheating

A student caught cheating in any assignment,

seatwork, quiz, midterm or final exam shall
automatically get a 0.0 for the course.

2-8
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

9/21/2016

Group Work

The student will have to work with his/her chosen

group mates for the required term paper that deals
with the application of finance concepts approved by
the professor

2-9
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

Grading System
Mid-term Grade
Quizzes

Final Grade
50%

Class Participation 10%

Mid-term exam

Mid-term grade

50%

Second half grade:

40%
-----

Quizzes
Term Paper

40%
15%

100%

Class Participation

10%

====

Final Exam

35%
-----100% 50%

Passing Grade: 75%

2-10
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

9/21/2016

Learning Outcome:
Explain the Principles of Finance

Weeks
Class Orientation,
No.
Introduction to
Financial Management, Wk 1-3
Review of Financial
(7.5 hrs)
Statements, and
Financial Statement
Analysis

Activities:

Problem Sets
Board Work
Assignment
Graded Recitation
Seatwork
Lectures
Discussions
Audio visual aids
Research
2-11

2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

Learning Outcome:
Understand the Principles of TVM

Time Value of Money

Weeks
No.
Wk 3-4
(7.5 hrs)

Activities:

Problem Sets
Quizzes
Board Work
Assignment
Graded Recitation
Seatwork
Lectures
Discussions
Audio visual aids
2-12

2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

9/21/2016

Learning Outcome:
Understand the Different Valuation and
Pricing Models
III. Risk and Rate of Return Weeks
No.
Quiz # 2
Valuation and
Characteristics of Bonds

Wk 4-8
(10.5 hrs)

Stock Valuation

Activities:

Problem Sets
Quizzes
Board Work
Assignment
Graded Recitation
Seatwork
Lectures
Discussions
Audio visual aids
2-13

2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

Learning Outcome:
Understand Cost of Capital

Cost of Capital

Weeks
No.
Wk 8-9
(3.0 hrs)

Activities:

Problem Sets
Quizzes
Board Work
Assignment
Graded Recitation
Seatwork
Lectures
Discussions
Audio visual aids
2-14

2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

9/21/2016

Learning Outcome:
Know the Concepts of Project Evaluation
Quiz 3
V. Capital Budgeting
Decision Criteria

Weeks
No.
Wk 912
(10.5 hrs)

Cash Flow in Capital

Budgeting
Capital Budgeting and
Risk Analysis
Quiz 4

Activities:

Problem Sets
Quizzes
Board Work
Assignment
Graded Recitation
Seatwork
Lectures
Discussions
Audio visual aids
2-15

2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

Learning Outcome:
Understand Capital Structure

Capital Structure Policy Weeks

No.
Wk 13
(3.0 hrs)

Activities:

Problem Sets
Quizzes
Board Work
Assignment
Graded Recitation
Seatwork
Lectures
Discussions
Audio visual aids
2-16

2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

9/21/2016

Learning Outcome:

Final Examination

Weeks
No.

Scheduled Examination

Wk 14
(2.0 hrs)

2-17
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

Learning Outcome:
Understand the Principles of TVM
Midterm Exam

Weeks
No.
Wk 8
(1.5 hrs)

Activities:

Problem Sets

Lectures

Quizzes
Board Work
Assignment
Graded Recitation
Seatwork/Group
Work
Discussions
Audio visual aids
2-18

2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

9/21/2016

What is Finance?
-concerned

with the process,

institutions, markets, and instruments
involved in the transfer of money
among individuals, businesses, and
governments.

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Copyright

2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole
or2006
in part.

Pearson
Addison-

Balancing Shareholder Value and Society Interests

Shareholder wealth maximization > maximizing

firm value.

considers cash flows, its timing, and the risk of these cash
flows.

Value of any asset is present value of cash flow

stream to owners.

Share Price = Future Dividends

Required Return

Stock prices change over time as conditions change

and as investors obtain new information about a
companys prospects.

Being socially responsible is not inconsistent with

maximizing shareholder value.
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2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

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The Capital Allocation Process

In a well-functioning economy,
capital flows efficiently from those
who supply capital to those who
demand it.

2-21
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

Financial Institutions & Markets: Financial

Institutions

Financial institutions - channel the savings of

individuals, businesses, and governments

Financial markets - provide a forum for

suppliers and demanders of funds to transact
business directly.

money market and the capital market.

capital market securities are bonds and both
common and preferred stock (equity).

1-22

2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

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Transfer of Capital between savers and borrowers?

Direct transfers
Investment banks
Financial intermediaries

2-23
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

The Importance of Financial Markets

Well-functioning financial markets facilitate the

flow of capital from investors to the users of
capital.

Promotes economic growth.

Economies with well-developed markets
perform.

2-24
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

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Stock Market Transactions

Apple Computer decides to issue additional stock

with the assistance of its investment banker. An
investor purchases some of the newly issued
shares.

What if instead an investor buys existing shares of

Apple stock in the open market. Is this a primary or
secondary market transaction?

2-25
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

What is an IPO?

An initial public offering (IPO) occurs when a

company issues stock in the public market for the
first time.

Going public enables a companys owners to raise

capital from a wide variety of outside investors.
Once issued, the stock trades in the secondary
market.

Public companies are subject to additional

regulations and reporting requirements.

2-26
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Stock Prices and Intrinsic Value

In equilibrium, a stocks price should equal its

intrinsic value.

To the extent that investor perceptions are

incorrect, a stocks price in the short run may
deviate from its intrinsic value.

1-27
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

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