BA 360 – Introduction to Financial Management
Fall
2007
Instructor: Professor Raymond M. Brooks
418B Bexell
Hall
541-737-3687
Office
Hours: Monday 3:00 p.m. – 4:00
p.m.
Wednesday 8:30
a.m. – 9:30 a.m.
Thursday 2:00 p.m. – 3:00 p.m.
Others by
appointment (please call for appointment)
Required Text: Brooks, Financial Management: A Modern Approach,
Pearson Custom Publishing, 2007, Second Preliminary Edition.
Calculator: Highly recommend purchasing
a TI BAII Plus Advanced Financial Calculator (cost around $30 to $35).
Course Objective: The objective of the course is to
introduce students to the basic questions facing a financial manager and the
tools a financial manager uses to find answers to these questions. The course
will introduce the basic tools of financial and applications of financial
theory in use today. Students will be introduced to legal, ethical,
technological, and global issues facing a financial manager. The course is
designed to enhance a student’s approach to financial decision-making and
emphasizes technical analysis and
Grading: Students take three
examinations during the course. Each examination will be a series of multiple
choice questions, essay questions, and/or problems. Weekly homework assignments
will be collected and evaluated for effort. At the Friday recitation sessions
homework will be returned and solutions provided. Exams will be worth 100
points each for a total of 300 points. Homework and recitation attendance will
be worth 160 points, 80 for turning in homework and 80 for attending
recitation. An additional 40 points for attending recitation on examination
return day for a class total of 500 points.
Academic
Dishonesty: For expectations of Student
conduct see: http://oregonstate.edu/admin/stucon/achon.htm
Class Attendance: I expect
students to be on time and present for every class. Good study habits and
efficient management of time will translate into good work habits and
responsible employees and effective managers. If you cannot make an exam you
need to notify me prior to the exam. Please leave a message on my telephone answering
service or send me an e-mail message.
Monday and Wednesday 10:00 to
11:20 a.m. Lecture at Peavy Auditorium 130
Friday 10:00 to 10:50 or 11:0
to 11:50 a.m. Bexell 412, 416 or 417
Recitation Instructors: Bexell 412 – Alex Bouck
Bexell 416 – Glen Morrison
Bexell 417 – Sophie (Yiqing) Ma
Recitation Instructors’
Office: Bexell 427
(1)
ECON 201: Introduction to Microeconomics
(2)
BA 213 Managerial Accounting or BA215 Money & Investment Management
(3)
Junior Standing
Understand the fundamental theories, concepts, and
tools of finance, including time value of money valuation techniques, the
relationship between risk and return, and the use and interpretation of
financial statements.
Apply financial management concepts and tools to the
decisions faced by a manager to
·
Investment
decisions
·
Financing
decisions
·
Working capital
management decisions
·
Financial
analysis and planning.
Fundamental Theories,
Concepts, and Tools
Explain the concepts of discounting and compounding.
Find the present value and future value for a single
cash flow, series of cash flows, annuity, and perpetuity.
Develop a loan amortization schedule.
Calculate an APR (annual percentage rate) and an EAR
(effective annual rate).
Use TVM to value assets such as common stock,
preferred stock, and bonds.
Describe and explain the variety of interest rates.
Identify and explain the factors that determine interest
rates and the yield curve.
Calculate the historical return average and standard
deviation of the historical returns.
Calculate the expected return, standard deviation, and
beta for a portfolio.
Explain diversification, and distinguish between
"diversifiable risk" and "nondiversifiable" risk.
Describe "beta coefficient".
Describe how beta coefficients can be estimated from
historical returns.
Understand and use the CAPM (SML) to calculate
required rates of return.
Explain the efficient market hypothesis (EMH) and its
implications for an optimal investment strategy
Understand the information contained in an income
statement, balance sheet, statement of retained earnings, and statement of cash
flows.
Summarize the differences between debt and equity.
Financial Decisions
Recognize and calculate the relevant cash flows for a
potential investment.
Calculate and interpret a net present value (NPV), an
internal rate of return (IRR), and a payback period for a capital budgeting
analysis.
Make capital budgeting decisions under conditions of
capital rationing and mutually exclusive investments.
Explain how to account for inflation in a capital
budgeting analysis.
Recognize and explain the weaknesses in the capital
budgeting process.
Calculate and interpret a weighted average cost of
capital (WACC).
Understand the effect of floatation costs on the cost
of capital.
Define financial leverage, capital structure, and
optimal capital structure.
Understand the effects of capital structure on the
risk and return characteristics of a company's debt and equity financing.
Understand the issues involved in setting corporate
policy concerning current assets and current liabilities.
Understand the cash conversion cycle and issues
involved in managing the cash conversion cycle
Briefly explain the difference between permanent
financing needs and seasonal financing needs.
Understand and be able to analyze the issues involved
in setting credit standards and terms.
Briefly describe the sources available for short-term
debt financing.
Identify and explain the major categories of financial
ratios.
Calculate and interpret typical financial ratios.
Use financial ratios to analyze company performance.
Identify weaknesses in ratio analysis.
Calculate and interpret pro forma financial statements
using % of sales method and / or specific information.
Identify the major reasons for estimating a pro forma
financial statement.
STUDENTS WITH DISABILITIES
Accommodations are collaborative efforts between students, faculty
and Services for Students with Disabilities (SSD). Students with accommodations
approved through SSD are responsible for contacting the faculty member in
charge of the course prior to or during the first week of the term to discuss
accommodations. Students who believe they are eligible for accommodations but
who have not yet obtained approval through SSD should contact SSD immediately
at 737-4098.
Fall 2007
Monday – Wednesday, 10:00 a.m. – 11:20 a.m.
Peavy Hall Auditorium 130
Recitations
Friday, 10:00 – 10:50 or 11:00 to 11:50 a.m.
Bexell 412 or 416 or 417
Course Outline
|
Date |
|
Homework |
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Monday Sept. 24th |
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Wednesday Sept. 26th |
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Friday Sept. 28th |
Chapter 1 |
Ch. 1: 2, 6, 8, & 10 |
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Monday Oct. 1st |
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Wednesday Oct. 3rd |
Chapter 2 |
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Friday Oct. 5th |
Chapter 2 |
Chapter 2: 6, 8, 9, 10, 16, 19, & 22 |
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Monday Oct. 8th |
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Wednesday Oct. 10th |
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Friday Oct. 12th |
Chapters 3 & 4 |
Chapter 3: 9, 15, 17, 20, & 25 Chapter 4: 3, 6, 12, & 18 |
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Monday Oct. 15th |
Chapters 3 & 4 |
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Wednesday Oct. 17th |
Examination #1 |
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Friday Oct. 19th |
Return Examination #1 |
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Monday Oct. 22nd |
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Wednesday Oct. 24th |
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Friday Oct. 26th |
Chapters 5 & 6 |
Chapter 5: 1, 2, 6, 10, 12, & 14 Chapter 6: 2, 4, 6, 8, 10, 12, & 14 |
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Monday October 29th |
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Wednesday Oct. 31st |
Chapter 7 |
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Friday, Nov. 2nd |
Chapter 7 |
Chapter 7: 6, 12, 15, 16, 24, 30, & 32 |
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Monday Nov. 5th |
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Wednesday Nov. 7th |
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Friday Nov. 9th |
Chapter 8 & 9 |
Chapter 8: 6, 8, 12, 16, & 20 Chapter 9: 5, 6, 7, 8, 9, 10, 12, 16, 18, & 20 |
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Monday Nov. 12th |
Examination #2 |
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Wednesday Nov. 14th |
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Friday Nov. 16th |
Return Examination #2 |
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Monday Nov. 19th |
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Wednesday Nov. 21st |
Chapter 10 & 11* |
Chapter 10: 2, 6, 7, 10, 14, & 18 Chapter 11: 13, 15, & 17 |
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Friday Nov. 23rd |
Thanksgiving Break |
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Monday Nov. 26th |
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Wednesday Nov. 28th |
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Friday Nov. 30th |
Chapters 12 & 13 |
Chapter 12: 4, 8, 9, & 12 Chapter 13: 8, 10, 11, 18, & 20 |
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Tuesday Dec. 4th |
Noon – Place TBA |
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Thursday Dec 6th |
Final Examination |
6:00 p.m. – Place TBA |
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* Will be a large
recitation session