Managerial Finance                                                                   James M. Forjan, PhD, CFA

MBA 572                                                                                Associate Professor of Finance

Tutorial                                                                         Office: BA 311, Phone: 815-1561

Web Address: http://goose.ycp.edu/~jmforjan/             

 

Required Text: Corporate Finance, Ross, Westerfield, and Jaffe, 7th Edition, Irwin McGraw-Hill.

 

Course Description. This course is analytical approach to the management of financial resources and the selection of financing alternatives.  Includes working capital, capital budget management, and the analysis of alternative investments and short to long-range sources of planning.   Prerequisites are MBA 501, MBA 502, and MBA 407.

 

Grading Policy.  Each student will take one mid term exam and one final exam and will complete several assignments.  Exam will be taken during class.

 

                        Assigned Readings and Problems                      30 points

                        Capital Budgeting Memo                                 15 points

                        Capital Structure Memo                                    15 points

                        Comprehensive Paper                                       40 points

Total                                                                100 points

 

Problems: You will answer a total of 40 questions at the back of chapters.  You can select them, but they cannot be all the simple ones.  You should average about two problems per chapter.

 

Memo Assignment: You will write two memos on a particular corporate finance topic.  Memos should be no more than three pages (double spaced) with references.  For each memo, you should act as an executive writing to the CFO about a certain problem or opportunity. 

 

Capital Budgeting Memo: Each student will compose a memo that summarizes the ability of a new product line that will increase the operating and financial risk of the corporation.  Each student will act as the vice-president of finance of Proctor and Gamble and convince the CFO that shareholder wealth will increase if PG begins manufacturing a new potato chip that offers the same nutritional value as broccoli.  Part of your memo should include a summary of how this new asset should be integrated with existing assets.

 

Capital Structure Memo: Each student will compose a memo describing the capital structure for Southwest Airlines.  The student will make a recommendation to either increase or decrease leverage based on an assessment of Southwest Airlines future.

 

Comprehensive Paper: Each student will write a comprehensive paper on a particular corporate finance yopic.  Clear the topic with me as soon as possible.  Papers should be at least ten and no longer than fifteen pages in length.

 

These assignments are due by May 4, 2005, but earlier submissions are encouraged.

 

Class Notes: The notes for each lecture are located on the web page.  Please be aware that these notes are provided to increase classroom efficiency and should not be used as a substitute for attendance. 

 

Wall Street Journal and Barron's subscriptions are available at special student rates for the semester.  They are excellent sources of information and data for your assignments.  Note that I usually create exams from WSJ articles, so you will at least be responsible for obtaining the WSJ for a few specific dates.

 

I RESERVE THE RIGHT TO CHANGE ANY ITEM ON THIS SYLLABUS AT ANY TIME, INCLUDING THE PERCENTAGE OF EACH COMPONENT GRADE.   THIS WOULD OCCUR IN THE EVENT OF EXTREME PERFORMANCES AT EITHER END OF THE SCALE.

 

            Schedule for Tutorial

 

Chapter 1.        Introduction to Corporate Finance;       Chapter 2.        Accounting Statements and Cash Flow

Chapter 4.        Net Present Value;                               Chapter 5.        How To Value Bonds and Stocks

Chapter 6.        Some Alternative Investment Rules;       Chapter 7.        Net Present Value and Capital Budgeting

Chapter 9.        Capital Market Theory: An Overview;

Chapter 10.      Return and Risk: CAPM;                     

Chapter 12.      Risk, Cost of Capital, and Capital Budgeting

Chapter 14.      Long Term Financing;               Chapters 15 and 16.     Capital Structure

Chapter 17.      Valuation and Capital Budgeting;           Chapter 31.      International Corporate Finance

Chapter 18.      Dividend Policy;                                   Chapter 19.      Issuing Equity Securities to the Public

Chapter 22.      Options and Corporate Finance;           Chapter 23.      Options and Corporate Finance

Chapter 25.      Derivatives and Hedging Risk;   Chapter 29.      Mergers and Acquisitions