Principles of Financial Management

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Principles of Financial Management

FIN331.00
6,
.0
0
1
, and .104

Fall

2007


Instructor:


Moon
-
Whoan “Stephen” Rhee

Office:



Stephens Hall 316H

Work Phone:


410
-
704
-
4075

Class Hours:


TR
1
2:
30
~
1
:
45
pm
(YR205)
,
TR 2:00~3:15pm
(ST113)

R

5:30pm~
8:10
pm
(ST210)

Offic
e Hours
:


3:30~5:00pm and by appointment

Email:



mrhee@towson.com

Course Home Page:


www.towson.edu/~rhee


Prerequisites:

Junior/major standing, (Acct 201/211), (Acct 202/212), (Econ 201/203),
(Econ 202/204), (Math 231/233 or Econ 205)


Course Description
:

The major objective of this course is to provide a solid foundation of the basic concepts
of financial management. In addition to being a required course for all business students,
this is the first course that a student desiring to specialize in financ
e can take.


This course will introduce you to some fundamental concepts and
definitions, such as capital structure, capital budgeting, cost of
capital, leverage (i.e., how much should a firm borrow), financial
statement analysis, and working capital manag
ement. You will learn
to think about the issues a corporate manager faces everyday, and
the choices a manager has in selecting a project, financing it and
managing the project successfully.


You will try to think in each instance about
ethical

issues that

could influence a manager's decision. For example, do the
manager's responsibilities lie with the firm's shareholders or is he/she
required to analyze situations from society's perspective also? It is
critical that one is able to inculcate society into
the decision making
process!


General Learning Objectives:



To develop in
-
depth study on several finance theories and analyses.



To provide students with an opportunity to apply financial tools for problem
solving and decision making purposes.



Specific L
earning Objectives:



The student will understand the role of financial markets and how financial
institutions relate to them.



The student will be able to apply time value of money concepts as part of
financial decision
-
making.



The student will be able to pr
ice securities by applying security valuation models.
This includes being able to identify the characteristics of the securities and the
cash flow patterns they generate.



The student will apply basic capital budgeting techniques to evaluate capital
acquisi
tions. This includes being able to identify relevant cash flows, to apply
appropriate evaluation methods and risk adjustments, and to identify financing
alternatives.



The student will be able to analyze the four basic financial statements of a
company, cal
culate key financial ratios, interpret them, and identify weaknesses
in the company’s financial management policies.



The student will be familiar with issues involving financial ethics.



T
he student will be able to estimate the cost of the various componen
ts of a firm’s
capital and the overall cost of capital.


Required Text:



Funda
mentals of
Financial Manag
ing
, 2
nd

ed., by Frank M.
Werner and James A.F. Stoner Freeload Press, 2006.
http://www.freeloadpress.com


Recommended Calculator:

Texas Instruments
BA II Plus


Recommended outside material:

Wall Street Journal Online Version or hardcopy


Course Responsibilities
:

You are responsible for all assigned readings, handouts, class
presentations, group discussion, and homework. I strongly
recommend you to
attempt those problems at the end of the
chapters and those that I assign during the semester. You must
read outside sources, such as
The Wall Street Journal, Business
Week, Fortune, Forbes
, and other business magazines, that help to
contribute to the cla
ss discussion and understanding of the lecture.
Also, the excitement and desire to keep up with current events in
the field is an important part of the student becoming a
professional. If you miss a class meeting, it is your responsibility
to obtain any

notes or assignments from your fellow classmates.
My notes are not available for copying.


Academic Integrity:


Student Academic Integrity Policy (Towson Undergraduate
Catalog p.277):

“The acquisition, sharing, communication and evaluation of
kno
wledge is at the core of a university’s mission. To realize
this part of its mission, a university must be a community of
trust. Because integrity is essential to the purpose of an
academic community, the responsibility for maintaining standards
of integ
rity is shared by all members of that academic
community.”


The Student Academic Integrity Policy as it pertains to this class
:
There is no tolerance of academic dishonesty in this class. Any
violations are sanctioned by the professor.


Learning Disabili
ties:

To request academic accommodations due to a disability,
please contact the Disability Support Services Office at (410)
704
-
2638. If you have a letter from their office indicating that
you have a disability which requires academic accommodations,
ple
ase present the letter to me so we can discuss the
accommodations that you might need in this class.


Grading:


Three Mid
-
terms


60 points (
30
%+20%+
10
%
best
-
>
worst
)




Final




35 points




Active

Participation


5 points






-------------------------
---------------------------------






100 points


Attendance and Participation

Attendance and participation not only contribute to an interesting
class, but also help me to evaluate your performance in the
learning process. Therefore, I strongly recommend

you to attend and
participate in class discussion. Reading the assigned materials and
chapters accordingly helps bring in quality comments and is
expected. Finally, Establishing a healthy relationship with your
professor can help her evaluate your perfo
rmance in a more efficient
and accurate way.


KSAs:

Relevant KSAs for this course include Thinking (problem
solution, flexible thinking in new ways, integration of accounting and
economics subjects, etc.), Business Content and Practical Excellence
(computa
tions and estimations).


E
xpectations
:

My expectation is that an average student will spend
about one hour a day, five hours per week on this subject,
exclusive of class hours and preparations for exams. This is a 300
level course. I expect you to exhibit
professional behavior. I expect
you to come to class prepared and
actively

participate in class
discussions. I also expect you not to do anything to distract the
class. I reserve the right to give a lower mark to those who distract
the class regardless of
their academic performance. If you miss the
class six hours or more, I may assume that you are dropping the
course. No excuses (legitimate or not, documented or not) are
necessary and will be accepted. Coming into class late or leaving
the class in the m
iddle of class (even if you are coming back)
without my prior consent may also be considered as missing the
class.


F
inal Grading
:

A 90 or better, A
-

88 or better, B 80 or better, B
-

78 or better,

C 70 or better, D 60 or better, F below 60



E
xcused Exa
ms
:

No make
-
ups.

However, upon presentation of a
University accepted legitimate written excuse (e.g., doctor’s note,
University team coach’s note), an alternative point distribution system
(15%+35% for the two Mid
-
terms, 45% for the final, and 5% for
activ
e participation) may be used.




N
eed Help
?

Students who need help during the course should not
hesitate to see me with questions on lecture material or other course
content.


M
iscellaneous
:

My Schedule & Reading Assignments are tentative and
subject to c
hanges as the semester progresses. Please check my
e
-
mail on a regular basis.


R
epeated Course Policy
:

Students may repeat a course only once.
For a third attempt, a student must obtain a written approval from
the Academic Standards Committee. Students

who do not obtain
written permission for a third attempt enroll at their own risk.


CBE S
tandard
:

Regardless of the subject matter, the student will be
held accountable for proper grammar and correct spelling for all
written assignments, including exams.


USEFUL WEBSITES


In addition to the websites introduced in the textbook, you may find
the following websites useful.


www.towson.edu/~rhee

www.towson.edu/~rhee/book

http://www.twinkiesproject.com/

http://fi
nance.yahoo.com

(Yahoo Finance), Use Yahoo's search engine
as well.

www.prenhall.com/divisions/bp/app/cfldemo/CB

www.stls.frb.org

www.ny.frb.org

www.bloomberg.com

www.ask.com

waysandmeans.house.gov/Links.asp?section=15
59

(about S
-
corporation
reform)

www.bankrate.com

www.experian.com

www.transunion.com

www.equifax.com

www.choosemaryland.org

http://www.dnb.com/us/

www.wsj.com


FYI


COURSE OUTLINE AND REQUIRED READINGS


1st Week


Topics to be covered:

Overview



Reading
s:

Syllabus, Summary


2nd Week


Topics to be covered:

Exam I
, Introduction
, Internet
uses, Email
accts



Readings:

Syllabus, Chapter 1.



3rd Week


Topics to be covered:

Data for Financial Decision Making.



Readings:

Chapter 2.



4th Week


Topics to be
covered:

The Time Value of Money



Readings:

Chapter 3.



5th Week

Topics to be covered:

Money Rates.



Readings:

Chapter 4.



6th Week

Topics to be covered:

Review and
Exam II
.



7th Week

Topics to be covered:

Raising Money I.



Readings:

Chapter 5 and 6
.



8th Week

Topics to be covered:

Raising Money II.



Readings:

Chapters 6 and 7.



9
th Week

Topics to be covered:

Risk and its Measurement.



Readings:

Chapter 8.


10
th Week

Topics to be covered:
Review and
Exam III



11th Week

Topics to be covered:

The

Value of Securities



Readings:

Chapter 9.



12th Week

Topics to be covered:

The Cost of Capital.



Readings:

Chapters 10.



13th Week

Topics to be covered:

Capital Budgeting.



Readings:

Chapter 11.


14th Week

Topics to be covered:

Review
.



The
F
inal

is comprehensive.