SOUTHERN CONNECTICUT STATE UNIVERSITY
DEPARTMENT OF ECONOMICS AND FINANCE
SUMMER 2001
WEATHER CHECK NUMBER: (203) 392-5520
COURSE NO.: FIN 300-01
COURSE TITLE: CORPORATE FINANCE
COURSE DESCRIPTION: A study of the private corporation from the standpoint of managers. Topics: basic theories and techniques of financial decision making, encompassing working capital, capital budgeting, long term financing and security valuation.
PREREQUISITES: ACC 200, 210, ECO 100, 101, 221
PROFESSOR: Dr. Robert M. Eldridge, Tel: (203) 876-5046 (H); (203) 392-5628 (O)
OFFICE HOURS: Monday - Thursday 1500-1700, Seabury 304
CLASS HOURS: Monday - Thursday 1730-1930, EN308
MATERIALS:
1. Required:
A) Fundamentals of Financial Management, Concise 2nd edition, Eugene Brigham and J. F. Houston, Dryden Press, 1999.
B) Subscription to the Wall Street Journal
COURSE OBJECTIVES: The objective of this course is to establish a foundation in
business finance theory with an emphasis on basic concepts and fundamental quantitative techniques. At the end of the course the student should appreciate the financial decision making issues and constraints faced by managers in areas such as financial analysis, capital budgeting, debt-vs-equity financing, stock pricing, cost of capital measurement, and asset and liability management.
METHOD OF INSTRUCTION: The method of instruction will be primarily lectures and problems from the textbook.
-2-
METHOD OF GRADING:
1. Exams: 3 @ 25% 75%
2. "Two minute drills" 10%
3. Participation and attendance 5%
4. Ethics questions 10%
Total 100%
SPECIAL NOTES:
1. "Two minute drills". Generally, at the end of each class, there will be a one-question quiz lasting two minutes. I will count only the top 10 grades. This will constitute 10% of the final grade.
2. At the end of the course the student will be requested to complete a "Course Survey" form, separate and distinct from any University Evaluation form. This survey helps me in preparing the course for the next time it is offered. For each form returned 1/n points will be added to the final grade, where "n" represents the number of students enrolled in the course based on the registrar's final class list.
3. The student is permitted and encouraged to tape record lectures for personal study use only.
4. If any student has a particular disability-related need in order to participate in
this course, such as: special seating, note-taking assistance, use of tape recorders or modified examination conditions, please let me know as soon as possible so that appropriate accommodations can be made.
5. Copies of the homework problems will be placed on reserve in the library.
EXPECTATIONS:
A. What you may expect from me:
1. A strong grounding in corporate finance.
2. A willingness to work with you on specific problems you have with the course or scheduling.
3. A sense of excitement about the field of finance.
B. What I expect of you.
1. Come to class prepared by having read the assigned material and done any outside work assigned.
2. If you know that you will miss a class, a call to me would be appreciated.
3. If something does not make sense, you will ask me either in class, in office hours or call me at home.
4. A sense of what is going on in the world of business and finance through a daily reading of the Wall Street Journal , sections one and three at a minimum.
C. Profile for success or failure. If you go into an exam behind in the reading and
homework problems, you will probably not be successful. If, on the other hand, you have done the reading and homework and been faithful in attendance, you should have no problem with any exam you get from me.
-3-
ASSIGNMENT SCHEDULE
DATE TOPIC CHAPTER PROBLEMS
A. INTRODUCTION AND ANALYTICAL TECHNIQUES
May 29 Introduction and
Accounting Review 1, 2
Financial Statement 3 3-1; 3-2; 3-3; 3-4;
Analysis 3-6, 3-8, 3-13; 3-14
May 30 Time Value of Money 6 6-32; 6-33; 6-34;
6-35; 6-36; 6-37
6-38; 6-39; 6-40;
6-41; 6-42; 6-43
Use Tables for
All Problems
May 31 Introduction to Risk 5 (pp 150 - 170)
And Return
Interest Rate Theory 4 4-5; 4-12
June 04 Forecasting 14 14-4; 14-5
Catch-up
B. EXAM I
June 5 Prob. Review
Exam I (1 hr, 15 min)
C. WORKING CAPITAL/TREASURY MANAGEMENT
June 6 Introduction: Cash, 15 15-5; 15-9
Marketable Securities
And Accounts Receivable
June 7 Inventory Management 15
Credit and Short Term 16 16-6; 16-8; 16-11
Financing
June 11 Catch-up
-4-
D. CAPITAL BUDGETING
June 12 Capital Budgeting I 10 10-6;10-8 (Calculate
NPV, IRR only)
Capital Budgeting II 10 10-10(calculate
NPV only);
10-11b; 10-15
June 13 Capital Budgeting III 11 11-4; 11-6; 11-11
June 14 Catch-up
Problem Review
E. EXAM II
June 18 Exam II (1 hr. 15 min.)
F. CAPITAL STRUCTURE/COST OF CAPITAL
June18 Capital Structure 12 12-2; 12-3; 12-7 Cost of Capital 9 9-5; 9-8; 9-9;
9-11; 9-13
June 19 Catch-up
G. SECURITY MARKETS/VALUATION
June 20 Risk/Return - CAPM 5 (pp 171-186) 5-1;5-2;5-4; 5-10
June 21 Valuation I 7 7-1; 7-6; 7-13
June 24 Valuation II 8 8-1; 8-2; 8-4;
8-5; 8-9; 8-20
June 25 Dividend Policy 13
June 26 Catch-up/Review
H. Exam III
June 27 Final Exam