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BA 440 – Corporate Finance

 

INSTRUCTOR:                                  Prem Mathew                                                                                           

                                                            Bexell 422B                                                                                      

                                                            737-6066, prem.mathew@bus.oregonstate.edu

                                                 

OFFICE HOURS :                             Tuesday  12:00 – 1:00

                                                            Wednesday 2:00 – 3:00,

                                                            Friday 9:00 – 10:00, or by appointment.    

 

COURSE DESCRIPTION:                This course provides students with an in-depth examination of the decisions that a financial manager must make. Students will be introduced to the theoretical and practical underpinnings of the capital budgeting, capital raising and dividend policy decisions. Students are also introduced to firm valuation.

 

PREREQUISITE:                              BA 340

 

REQUIRED MATERIALS:              Text: Damodaran, A., 2001, Corporate Finance: Theory and Practice, Second Edition, John Wiley & Sons.

 

Additional materials, such as articles, websites, etc. will be provided in class as they become relevant. All course documents can be accessed through the COB course materials website at http://classes.bus.oregonstate.edu/ba440 and through the links above.

 

TEXT WEBSITE:                               http://wiley.com/college/damodaran

 

GRADING:                                         Your final grade will be will be determined by the following weights. 

 

Two Midterm Exams: 20% each

Four Assignments (of which the top three scores will be counted towards your final grade): 5% each

Term Project: 15%

Final Exam: 30%

 

Assignments and Exercises:  Assignments will be provided prior to exams to prepare students for the midterm and final exams.  Details of the comprehensive term project will be provided at a later date.

 

Midterm and Final Exams:  Students that cannot make an exam must notify me prior to the day of the exam.  Mid-term exams will be non-cumulative. The final exam will be cumulative.

 

ACADEMIC DISHONESTY:            For information about academic integrity and the University's policies and procedures in this area, please refer to the Student Conduct web site at:  http://www.orst.edu/admin/stucon/achon.htm  and the section on Academic Regulations in the OSU Schedule of Classes.

 

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.

 

COURSE OUTLINE:                         The following serves as a tentative outline for the course.  All chapters listed will be covered to some extent, time permitting.  Please make note of the midterm exam dates.  Students will only be responsible for sections of chapters covered in class. 

 

Week of                      Topic                                                                           Chapter

 

Jan 9                            Course Introduction

                                                                                                Introduction to Corporate Finance                                   1

Objective in Corporate Finance                                      2                       

 

Jan 16                           Hurdle Rates for Firms                                                  7           

                                                                       

Jan 23                           Hurdle Rates for Firms  (contd.)                                    

 

Jan 30                           Hurdle Rates for Projects                                              8

Project Earnings and Cash Flows                                   9

                       

Feb 6                            Investment Decision Rules                                             10

Project Interactions, Side Benefits, and Side Costs           12

 

Feb 13                          Financing Choices                                                         16

Financing Process                                                         17

                                   

Feb 14                         EXAM 1         

 

Feb 20                          Financing Mix                                                               18

Optimal Financing Mix                                                   19

 

Feb 27                          Dividend Policy                                                             21

Analyzing Cash Returned to Stockholders                       22

 

Mar 6                           Valuation: Principles and Practice                                  24

 

Mar 7                          EXAM 2

 

Mar 13                         Valuation: Principles and Practice (contd.)                     

 

Mar 20                        Final Exam 2:00 – 3:50 p.m.­­­ (Section 1)

Mar 23                        Final Exam 6:00 – 7:50 p.m. (Section 2)