SCHOOL OF BUSINESS ADMINISTRATION
SYLLABUS
FINC

3
01
FINANCIAL MANAGEMENT
FALL 20
1
3
Instructor
:
Dr. D.K. Malhotra
Office
:
1
0
4
Tuttleman
Building
Phone
:
(215) 951

2813
E

mail
:
Malhotrad@philau.edu
Web Page
:
http://faculty.philau.edu/MalhotraD
Office Hours:
1
1
.
00 a.m.
–
12:
3
0
p.m.
Monday
s and
Wednesday
s
or by
appointment
Required Text:
Foundations of Finance: The Logic and Practice of Financial Management
by Keown, Martin, Petty, and
Scott,
8th
Edition, Prentice Hall
/Pearson
,
ISBN

10:
0133423999
Calculators:
A calculator that has a power function will be necessary for the course.
Relatively inexpensive will suffice. No programmable (text storing) calculators
will be allowed
for tests. Calculators performing financial functions are allowable.
If you have a smartphone, you can download financial calculator application on it.
IT IS MANDATORY TO BUY A BUSINESS/FINANCIAL CALCULATOR FOR
THIS COURSE.
Digital Resources:
Power p
oint notes will be available on http://bb.philau.edu
Course Description:
This is an introductory level finance course that will examine the role of the
financial decision

maker at the corporate level. The emphasis will be on the goal
of the firm, the
efficient market hypothesis, discounted cash flow analysis, and
the trade

off between risk and return.
Prerequisite:
All students must have completed
ACCT 101
,
STAT 20
1, or M
ATH
321
.
It is the students' responsibility to make certain that they h
ave successfully
completed these courses. If at any time during the semester it is learned that a
student has not successfully completed these prerequisites, he/she will be
dropped from the course receiving, neither credit nor tuition refunds.
Cours
e Objective:
The objective of the course is to teach students how to approach and solve the
fundamental financial problems facing all businesses including non

profit and
government. Each topic explored in the course represents a real

life financial
pr
oblem facing the "firm". Much of what the students will learn currently is in use
in firms across the state and nation.
Course Outcomes:
A successful student should
have the ability to
use a financial calculator and excel spreadsheet in finance
Unde
rstand the goal of a firm
Understand the external financial environment
Compute expected return and risk of a security?
understand the significance of portfolio and compute risk and return of
portfolio
explain the concept of beta and application to portfol
io theory
comp
ute present and future value of a series of cash flows
identify an annuity and a perpetuity
distinguish between preferred and common stock
compute the value of common stock and preferred stock
explain the basic features of bonds
compute fair
market value of bond
distinguish between current yield and yield to maturity
compute payback period and interpret it
compute Net Present Value and interpret it
compute IRR and interpret it
compute PI and interpret it
Requirements:
1.
Attend cla
ss regularly.
2.
Do homework.
3.
Study class notes prior to next class and come prepared to the class to
participate actively in discussions.
4.
Be able to take time pressure tests.
Attendance:
Attendance is mandatory. You are re
sponsible for what is covered in the class
and any absence on your part leaves you responsible for finding out what was
presented in class. You will benefit a lot from the course by doing problems and
reviewing concepts, which are covered in the class.
Grading:
EXAM I
25%
EXAM II
25%
FINAL EXAM
25
%
QUIZZES
1
5
%
C
lass Participation
10%
No late homework will be accepted. No makeup exams will be given. If you miss
an exam due to an unavoidable reason, the grade on the missed ex
am will be
transferred to the final exam.
THE FINAL EXAM IS COMPULSORY AND
COMPREHENSIVE. DO NOT EXPECT ANY SCALING ON THE GRADES.
Help Sessions:
I do plan on devoting
a
class before each exam reviewing the material
that
will be
covered on the
test.
Academic Honesty:
Students are expected to perform according to a code of academic honesty that
prohibits cheating on tests and plagiarizing others’ work. Violation of this code
may result in failure of the course.
Grading Policy:
The following policy will be followed for assigning letter grades in this course.
93 and above
A
90
–
92
A

87
–
89
B+
83
–
86
B
80
–
82
B

77
–
79
C+
73
–
76
C
70
–
72
C

Less than 70
F
Retention of Student Ex
ams, Papers, etc:
Students’ materials will be retained for a minimum of four weeks into the
subsequent semester.
Academic Support Services:
Learning and Advising Center
:
http://www.philau.edu/learning
Gu
tman Library
:
http://www.philau.edu/library
Technology Assistance
:
http://www.philau.edu/OIT
TENTATIVE COURSE OUTLINE:
08/2
7
Introduction to Financial M
anagement (Chapters 1)
Forms of Business Organization
Goal of the Firm
Why Managers should maximize shareholders’ wealth
Ethics and Shareholder Wealth Maximization
08/2
9
Shareholder Wealth Maximization and Motivating Management
(Chapter 1)
0
9
/
03
Financial Environment
(Chapter 2)
Role of Financial Markets
Types of Financial Markets
Primary versus Secondary Markets
0
9
/
0
5
Financial Environment (Chapter 2)
09/10
Risks and Return (Chapter
6
)
Meaning of Risk
Meaning of Return
o
Actual Return
o
Expecte
d Return of a Security
09/
12
Risks and Return (Chapter
6
)
Measurement of Expected Return of a Security
Risk of a Security
Measurement of Risk of a Security
09/1
7
Risks and Return (Chapter
6
)
Meaning of a Portfolio
Why Create a Portfoli
o?
Expected Return of a Portfolio
09/1
9
Risks and Return
Measurement of Expected Return
Risk of a Portfolio
Measurement of
Risk of a Portfolio
09/
24
Risks and Return
Capital Asset Pricing Model
Security Market Line
09/2
6
Risk and Return and
Review for Exam I
10
/
01
Exam I
1
0/
03
Time Value of Money
Meaning of Time Value of Money
Why time value of money?
Concept of Present Value and Discounting
How to compute future value of a single cash flow?
Concept of Future Value and Compounding
How
to compute future value of a single cash flow?
10
/
0
8
Time Value of Money (Chapter
5
)
Calculation of Interest Rate
Calculation of time period
10
/
1
0
Time Value of Money (Chapter
5
)
The Effect of Compounding
Multiple Cash Flows and Present Value
10
/
15
Time Value of Money (Chapter
5
)
Annuities
10
/
1
7
Time Value of Money
Perpetuities
10/
22
Bond Valuation (Chapter 7)
Features of a Bond
Valuation of an Annual Bond
10/
24
Bond Valuation (Chapter 7)
Valuation of Semiannual Bonds
Bond Yields
10/2
9
Stock Valuation (Chapter 8)
Features of a Stock
Valuation of a Stock
Zero Growth Model
Constant Growth Model
1
0
/
31
Stock Valuation and Review for
Exam
2
1
1
/0
5
Exam 2
1
1
/
0
7
Capital Budgeting Analysis
(Chapter
10
)
Meaning and Significance of Capital Budgeting
Techniques of Capital Budgeting
Payback Period
Internal Rate of Return
1
1
/
12
Capital Budgeting An
alysis
(Chapter
10
)
Modified Internal Rate of Return
Net Present Value
Profitability Index
Evaluation of various techniques of capital budgeting
11/
14
Capital Budgeting Analysis
(Chapter
10
)
11/1
9
Capital
Budgeting Analysis
(Chapter
10
)
11/
2
1
Cash Flows Estimation for Capital Budgeting (Chapter 1
1
)
Significance of Estimation of Project Cash Flows
Relevant versus Irrelevant Cash Flows
Impact of Net Working Capital Change o
n Project Cash Flows
How to Estimate Project Cash Flows?
11/
2
6
Project Cash flows and Risk Analysis (Chapter 1
1
)
Project Risk Analysis
How to Evaluate Projects in the Presence of Risk?
11/2
8
Thanksgiving Break (No Class)
1
2
/
03
Cost of Capital (
Chapter
9
)
Concept of Weighted Average Cost of Capital
Cost of each component of capital
1
2
/
05
Cost of Capital (Chapter
9
)
How to Calculate WACC?
Review for Final Exam
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