LEEDS SCHOOL OF BUSINESSMBAC 6060Eve: CORPORATE FINANCEFALL SEMESTER 2010LEEDS SCHOOL OF BUSINESSUNIVERSITY OF COLORADO at BOULDER Professor Jaime F. ZenderOffice S415 Koelbel Hall, Classroom S125 Koelbel HallPhone: 303-492-4689Fax: 303-492-5962E-mail: [email protected]: http://leeds-faculty.colorado.edu/zender/Office Hours: by appointmentI. COURSE DESCRIPTION:This course is an introduction to financial management. The goal is to provide all of you, regardless of your ultimate MBA functional area concentration or career path, with a solid understanding of the fundamental tools and decision-making processes of business finance. Accordingly, the objective is to provide a conceptual framework with which you can appreciate and understand the problems facing the financial manager in the real world today.Financial Management covers the following topics: • financial analysis and planning, • Fisherian economics and financial mathematics, • valuation of securities, • efficient capital markets,• capital budgeting (the investment decision) under certainty, • the linkage of corporate strategy to finance, • capital market theory,• risk and return and asset pricing, • capital budgeting under uncertainty and the cost of capital,• capital structure,• dividend policy, and• mergers and acquisitions.While MBAC 6060 is not designed to dwell on abstract theory, an understanding of the basic theoretical underpinnings of finance is a prerequisite to intelligent analysis and problem solving. The ultimate objective of the course is to provide the “well-educated” general manager with the conceptual basis for making sound financial decisions in the modern business environment. Despite this requirement, the practical importance of the material, naturally leads us to discuss many examples and applications.II. COURSE MATERIALS:Required Texts: Corporate Finance: The Core, 2nd edition, by Jonathan Berk and Peter DeMarzo, 2010, Pearson/Prentice Hall. This book is referenced on the assignment schedule as B&D.Analysis for Financial Management, 9th edition, by Robert C. Higgins, 2009, Irwin/McGraw-Hill. This book is referenced on theassignment schedule as HIG. Higgins writes in an applied, “user friendly” format for practicing financial managers. While not providing comprehensive coverage of some finance topics, and notemphasizing the required theory, the book provides reinforcement and additional intuition to more standard finance texts. While “non-finance” types may sell their B&D text at the conclusion of the course, I strongly recommend that all students keep the Higginstext for future reference; it is indispensable for any manager.Cases: There is also a small packet of Harvard cases.Webpage: You will find various teaching notes, slides, and assignments at: http://leeds-faculty.colorado.edu/zender/ or “MyLeeds.”III. COURSE POLICIES:As mentioned above, MBAC 6060 is an ambitious course. Most past students, at a variety of universities, have considered the core finance class to be the most difficult course in the first yearof their MBA program. The pace is necessarily swift and mastery of the material is time-consuming. Experience has shown that students who get behind are seldom able to recover. Therefore, a strong and continuing time commitment is necessary. Please read the following course policies carefully! I will not deviate from these policies except under extreme circumstances!Your grade will be determined as follows:- Midterm Exam 30% October 19th - Comprehensive Exam 40% December 14th - Cases and homework 30% See course scheduleExams will likely contain a mixture of essay questions, problems, and, perhaps, even some multiple-choice questions. All material covered in the lectures, readings, and assignments will be fair game for the exams. To stress your mastery of concepts rather than your memory, you may bring one 8-1/2 by 11 inch sheet of paper (one sided) containing your personal notes, important equations, favorite quotes, etc, to each exam. A typewritten page is acceptable.No "makeup" exams will be given unless they are arranged for in advance of the examination date! If you miss the midterm exam (due to an emergency only, this is not an option you may elect) your grade will be determined by the cases and the final exam. The final exam must be completed in order to pass the course! Students who wish to appeal their score on any exam must submit the exam and a brief discussion in writing on why a different grade is warranted. Any appeal to an exam grade must be delivered to me no later than one week following the date the exam is returned. Furthermore, I reserve the right to re-grade all questions on the exam (I make errors in being too generous as well as too stingy!).The Harvard Cases and the Wasatch Electronics case are to be written up and handed in, one per group. Limit yourselves to 2-3 pages of discussion plus any supporting tables you wish to attach.Class participation is an important indication of daily preparedness. Thoughtful feedback from you facilitates the learning process and makes classes lively and interesting. Good questions are an important form of participation. Come to class prepared to ask and answer questions posed by your classmates or myself. While I do not formally grade class participation it is an importantpart of the learning process and I expect each student to participate for the benefit of all.Homework assignments are provided for most of the readings. The assignments are structured toreinforce the major themes of the class for that day, and to illustrate the types of problems you can expect to find on the exams. These assignments will not be collected rather you will complete the assignments at myfinancelab.com (see the schedule for instructions for registering).To get the most out of class, and ensure you keep up with the swift pace, you should carefully read the assigned chapters and attempt at least some of the problems before the corresponding lecture. The homework assignments are designed as individual assignments however you may benefit from working on them in small groups. In order to allow you to manage your time in as flexible a manner as possible, I do not require that you complete homework assignments on the day they are listed on the schedule. I only require that the assignments for chapters 3 through 9 be completed prior to the time of the Midterm exam and for