CALIFORNIA STATE UNIVERSITY-LONG BEACH COLLEGE OF BUSINESS ADMINISTRATIONDEPARTMENT OF FINANCE, REAL ESTATE & LAW Summer Session III, 2002FINANCE 300: BUSINESS FINANCETuesday and Thursday Mornings, 9:00 – 12:45CBA 235Instructor: Peter A. Ammermann, Ph.D.Office: CBA-328Phone: (562) 985-7526E-mail: [email protected] Website: http://www.csulb.edu/~pammerma Office Hours: Tuesday and Thursday: 12:50 – 1:30, 5:10 –5:55, or by appointment.Course Description: This course provides a broad background of the concepts and practices of contemporary finance. Topics include the purpose of finance, financial information and decision making, time value of money, methods of financing business operations, bond and stock evaluation, risk and rates of return, asset and liability management and multinational issues. The perspective for the first part of the course is closer to that of an outside investor, while the latter part of the course adopts the perspective of the financial manager. Required Text: Fundamentals Of Financial Management (9th Ed.), by E. F. Brigham and J. F. Houston (Harcourt: 1999).Additional Recommended Reading: Study Guide, by Brigham, Houston, and Clark (Dryden Press: 1998).The Wall Street Journal (Note: a subscription gets you access to the WSJ interactive website.) Forbes, Fortune, and/or Business Week.Calculators: You will need a financial calculator, such as the Hewlett-Packard 17, 10, or 12 series, or the Texas Instruments BA II, for this course. Financial calculators are necessary for many of the calculations that will be required in this class, and they will make your life easier for any future Finance courses you might take. Please bring your calculator to class each meeting, and use them frequently. You will be much happier on exams. Course Objective: To provide students with the principal theoretical concepts and basic analytical tools of corporate financial management. The course is designed to lay a solid foundation in the area of financial management for both finance and non-finance business majors.Prerequisites: IS 310Class Procedures:1. Your success in this class will have a direct relationship to the amount of reading and preparation you do. The lectures and exercises will concentrate on the major and more difficult concepts involved in the text. If you have read over and familiarized yourself with the assigned chapter prior to lecture, your understanding of the discussion will be greatly enhanced. 2. Attendance will be taken randomly. Some of the exam questions will come from class discussions. 3. Part of your grade for the class will be based on group homework projects, including participation in the Virtual Stock Exchange. Groups for this project must be chosen by the end of the second class period. 4. Knowledge of current business news will be assumed and drawn upon frequently. Frequent reading of the Wall Street Journal, and viewing of financial news programs is strongly recommended. 5. The course builds as it goes along. Make sure you do not get lost early, or you will have great difficulty catching up. If you don’t understand the early material, please feel free to take advantage of office hours, and ask!! 6. Additional homework from both the text and the study guide will be suggested but neither graded nor collected. There will be a high correlation between homework attempted and success on exams. It is up to you. Some homework suggestions and solutions will be provided. 7. The university policy on academic dishonesty will be strictly followed.Performance Evaluation: Component PercentageTwo Mid-term Exams (20%, lowest exam; 30%, highest exam) 50Homework Projects and Virtual Stock Exchange 15Final Exam 35Total 100The following grade guidelines will be followed:A = 90 - 100B = 80 - 89C = 70 - 79D = 60 - 69F = < 60Performance Evaluation (Cont.): 1. Based upon the ranges of actual grade outcomes, final grades may be curved. 2. There will be two tests given throughout the term, with the lowest counting 40% of your test total (for a total of 20 points) and the highest counting 60% (for a total of 30 points). These tests will be multiple-choice with, possibly, some problems. On each test, the approximate division of types of questions will be 50% conceptual and 50% problem-solving. These tests will not be specifically comprehensive, but will assume skills and knowledge from prior sections. 3. The final exam will be a comprehensive, standardized, departmental final exam.Tentative Course Schedule: Week Chapters Topic Some Suggested Review Problems1 1 Introduction, Overview1 2 Accounting Statements2 3 Financial Ratio Analysis P:3-6,3-7,3-92 4 Financial Planning & Forecasting Q:4-1,4-3,4-5; P:4-4,4-5,4-62 5 The Financial Environment Q:5-5,P:5-6,5-123 6 Risk & Return P:6-5,6-9,6-113 7 Time Value of Money P:7-15,7-29,7-37,7-424 8 Bond Valuation P:8-1,8-2,8-154 9 Stock Valuation P:9-13,9-16,9-194 10 Cost of Capital P:10-8,10-9,10-115 11 Capital Budgeting P:11-8,11-12,11-175 12 Cash Flow Estimation P:12-3,12-5,12-66 15 Dividend Policy P:15-6,15-96 19 MultinationalsFinal ExamNotes:1. There is a lot of material to cover (required by the department final), so we will have to covera couple of chapters per week. 2. The first test is planned for the beginning of the 3rd week, and the second test is planned for the end of the 5th week.3. Adding or dropping/withdrawing from a class should comply with the University and Collegeof Business Administration policies and rules.4. The contents of this syllabus may be subject to change if circumstances require. If such changes do occur, they will be announced in class and posted on the