corporation finance - fomgt 301, spring 2004 · corporation finance - fomgt 301, spring ... ab 521...

Corporation Finance - FOMGT 301, Spring 2004 Tuesdays and Thursdays 9:30 – 10:45

ISOM 137 (Flavin Auditorium)

Course website: http://www.people.umass.edu/adhall/ Instructor: Andrew Hall

E-mail: [email protected]

Office Hours: Wed 11:30 to 13:00 AND Tue 11:00 to 12:00

Location: In the Atrium Area of the School of Management.

OR

By Appointment:

Wed before 11:30 - To make an appointment - e-mail by latest 8:00 on Tue)

Or Thu 11:00 to 12:00 - Let me know if you want to see me by the end of class on Thu.

Course Objectives FOMGT 301 has two main objectives:

1. to demonstrate the role of financial management within the corporation and …

2. to acquaint the student with the tools and terms of finance.

Class time will be spent mostly on introducing and then applying the topics. Students will be encouraged to spend a considerable amount of time outside class reading the text and solving problems.

The formal course prerequisites are the core freshman and sophomore ISOM classes (e.g. micro and macro economics, statistics, business computing, and accounting). You must also have a working knowledge of algebra.

Course Web Site The web site will list all announcements, provide a summary of what to expect in each class, and will be used to deliver what are typically considered to be class handouts. For example, all Excel Spreadsheets that are used in class will be available on the web site, and all solutions to problems in the text are available on the web site. You should get

© 2003 Andrew Hall. FOMGT 301 Corporation Finance Syllabus and Policies

mailto:[email protected]

into the habit of checking the site at least twice a week in order to keep current in the class.

http://www.people.umass.edu/adhall/

Create a bookmark or add it to your favorites.

E-mail E-mail will be a very important means of communication.

My best address is [email protected] and I also look at [email protected].

If you filter SPAM and have a list of acceptable addresses, please add my two addresses to your list.

I filter SPAM using a list of e-mail addresses and I will filter e-mails with "FOMGT301" in the subject line of the e-mail.

If you want me to read your e-mails you need to make sure that I have an up to date e-mail address. When letting me know of a change make sure that "FOMGT301" is somewhere in the subject line of the e-mail.

Required Materials

o Textbook

Chambers and Lacey, Modern Corporate Finance: Theory and Practice, 4th Edition, Hayden McNeil. {Textbook Annex, Umass Amherst}. If I can I will make a few copies of the book in either the 4th or 3rd edition available in the SOM reading room on reserve.

o Course Notes Supplement Refer to the course website for details.

o Personal Response System (PRS) Unit

This is a small handheld device that works like a TV remote control and allows me to set multiple-choice questions in class and record the answer given in class by each student. I will be using the PRS system most class periods and points will be earned towards your grade, so you should bring your PRS unit to class each day. New and used units are sold at the Textbook Annex. I believe a new unit costs $36 and that a used one costs $28 and that the units can be sold back to the Annex for $18. Make sure that the batteries in your unit are fresh.

o Calculator

Must have a multiple power key and a natural log key. Some calculators have built in program keys to solve finance problems (such as NPV, IRR, PV, and FV).




Popular calculators of this kind include BA II Plus, TI 83, and the HP 12C. Such features are not required but I do allow them to be used on exams.

o OWL

The course will feature a number of Online Web Learning assignments. All OWL assignments will be announced in class and on the course website. See course website for more details.


Academic Honesty I expect you to obey the rules and regulations established in

Undergraduate Rights and Responsibilities

published by the Office of the Vice Chancellor for Student Affairs and the Office of the Provost at the University of Massachusetts.

Students should be especially aware of the Code of Student Conduct (Trustee Doc. #T-95-095A) and the University policy on Academic Honesty. You can view this document online at this address:

http://www.umass.edu/dean_students/rights/acad_reg.htm#ACAD_HONESTY

Class Attendance Policy Past experience suggests that regular attendance is a key to success in this course. You are responsible for all material discussed in class, including any announcements made pertaining to any aspect of the course and exams. Exam questions will be drawn from class material, class discussion, and from the text. In addition if you are not in class you will miss the opportunity to register for points towards your grade from PRS questions.

Student Evaluation Distribution of “Points”

PRS {class attendance and responses} 100 points

Midterm Examination #1 100 points

Midterm Examination #2 100 points

Final Examination: 200 points

OWL Assignments 100 points

Course Total 600 Points


http://www.umass.edu/dean_students/rights/

http://www.umass.edu/dean_students/rights/acad_reg.htm

Grades will be allocated based on the “points” as follows: Grade Points Range

From To

A 561 600

AB 521 560

B 481 520

BC 441 480

C 401 440

CD 361 400

D 321 360

F 0 320

Personal Response System I will start collecting data from the PRS beginning Tuesday February 3, 2004. You earn PRS points in two ways; being in attendance (2.5 points per lecture attended up to 50 points) and answering course questions (50 points). Obviously you need to be present during the class – with your PRS unit in hand - to receive PRS credit. Attending class without the PRS unit is fine, but you will not receive PRS points that day.

Course Examinations There will be two midterm examinations and a final exam. Midterms are to be during the regular class period on Thursday March 4, 2004, and Thursday April 8, 2004. Make-up exams will be offered one time only on the following days: Friday March 5, 2004 and Friday April 6, 2004.

The final exam, scheduled by the Registrar, will have two parts. Part I will cover the material since the second exam. Part II will cover topics prior to that, probably the time value of money, and capital budgeting. They will be machine graded and multiple choice. They will be closed note and closed book, but will have a formula sheet that will list all the textbook formulas.


How to do well in this class Follow these ten steps:

1. Attend all classes.

2. Read each assigned chapter prior to class.

3. Read each chapter at least once more after you’ve seen the material presented and discussed in class. Clear up points of confusion.

4. Follow the demonstration problems at the end of each chapter.

5. Solve or try to solve each of the end-of-chapter problems, or do as many as you possibly can. This is the best way to judge your understanding of the material and to prepare for exams.

6. Study for the OWL Quizzes and take each one. Try to get a high score the first time, but if not, then study some more, clear up your points of confusion, and take the quiz for a 2nd time or a 3rd time or ...

7. Learn how to use your calculator in good time to use it during exams.

8. Take the practice exam in simulated exam conditions, that is, under a strict time limit. Use no notes, book, or any other materials while you take the practice exam. Resist the temptation to even look at the practice exam until a few days before the scheduled exam.

9. Pay close attention to notices and materials available and posted on the course web site.

10. Form a study group and help each other.

Cellular Phones Turn them off or turn them to silent when you come into class. Do NOT use them in class.



Outline Course Schedule: We will stick as closely to this schedule as possible. Cls Day Date Topic Reading OWL Assignment

Wed Jan 28th First Day Of Classes OWL tutorial / PRS Survey

1 Thu Jan 29th Admin Books Schedule Requirements Grading OWL PRS etc etc…

Chapter 3 Calculator Survey / Office Hours Survey

2 Tue Feb 3rd Time Value of Money 1 Optional Review of Algebra

3 Thu Feb 5th Time Value of Money 2

4 Tue Feb 10th Time Value of Money 3 Chapter 1 Quiz #1 due Midnight

Last day to Add or Drop with no record

5 Thu Feb 12th Modern Corporate Finance 1

6 Tue Feb 17th Modern Corporate Finance 2 Chapter 2 Quiz #2 due Midnight

7 Thu Feb 19th Markets and Contracts 1

8 Tue Feb 24th Markets and Contracts 2 Chapter 4 Quiz #3 due Midnight

9 Thu Feb 26th Valuation of Financial Securities 1

10 Tue Mar 2nd Valuation of Financial Securities 2 Quiz #4 due Midnight

Wed Mar 3rd Mid-Term Review Session OWL Practice Midterm

11 Thu Mar 4th First Mid-Term in Class Chapter 5

Fri Mar 5th Mid-Term Make Up

12 Tue Mar 9th Techniques of Capital Budgeting Chapter 6

13 Thu Mar 11th Estimating Project Cash Flows Quiz #5 due Midnight

Spring Break

14 Tue Mar 23rd Estimating Project Cash Flows Chapter 7

15 Thu Mar 25th Advanced Topics in Capital Budgeting Chapter 8 Quiz #6 due Midnight

Mid-Semester Date (Last day to drop with 'W' – Undergraduate)

16 Tue Mar 30th Risk And Diversification Chapter 9

17 Thu Apr 1st Risk And Diversification AND Modern Portfolio Theory – The Capital Asset Pricing Model

Quiz #7 due Midnight

18 Tue Apr 6th Modern Portfolio Theory – The Capital Asset Pricing Model

Chapter 10 Quiz #8 due Midnight

Wed Apr 7th Mid-Term Review Session OWL Practice Exam

19 Thu Apr 8th Second Mid-Term in Class

Fri Apr 9th Mid-Term Make Up

20 Tue Apr 13th Introduction to Options 1 Quiz #9 due Midnight

21 Thu Apr 15th Introduction to Options 2

22 Tue Apr 20th Introduction to Options 3 Chapter 11 Quiz #10 due Midnight

Thu Apr 22nd Monday Schedule

23 Tue Apr 27th Financial Leverage Chapter 12

24 Thu Apr 29th Financing – Importance Chapter 13 Quiz #11 due Midnight

25 Tue May 4th The Dividend Decision 1

26 Thu May 6th The Dividend Decision 2 Chapter 15 Quiz #12 due Midnight

27 Tue May 11th Financial Analysis Chapter 16

28 Thu May 13th Working Capital Management Last Day of Classes Quiz #13 due Midnight

Fri May14th Exam Review Session

Sat May 15th to Fri 21st Final Exam and Final Exam Make Up

corporation finance - fomgt 301, spring 2004 · corporation finance - fomgt 301, spring ... ab 521...

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