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BU8201 BUSINESS FINANCE

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Academic Year : 2013/14 Semester : 2

Course Coordinator

: Dr.Kong Yoon Kee Other

Instructor(s) : N.A.

Pre-requisites : * see below

No. of AUs : 3

Course Description and Scope This course provides non-business and non-accounting students with a broad understanding of the principles and practice of Business Finance/Financial Management. By the end of this course, students would have acquired sufficient finance knowledge to understand and appreciate how various financial decisions can have significant impact on the Profit/Loss and value of firms. They would also be familiar with pricing of stocks and bonds. This is a basic course in finance with emphasis on the major financial decisions made by companies and the valuation of investments made by them. The course starts by examining the various forms of businesses and the importance of interest rates. Time value of money, and the linkage between risk and return, lays the foundation for evaluating the price of bonds and stocks. Students will learn and apply principles of capital budgeting (calculating the profitability of various projects and deciding which one to proceed) and capital structure (financing approved projects by issuing shares or bonds, or using retained earnings). The course concludes with the evaluation of whether a company should use extra cash to pay dividends or repurchase its own shares. Pre-Requisite Students intending to take this course should be numerate (good and comfortable with mathematical calculations and formulas) e.g. they should know well compound interest calculations, Sum of Geometric Progression (G.P.) calculation before attending this course. Course Learning Objectives See Proposed Weekly Schedule below Learning & Teaching Methods 2 hours of lecture and 1 hour of tutorial per week Lectures commence in Week 1. Tutorials commence in Week 2

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Course Assessments

Components Weightage Individual/Group

Coursework* 40% Individual/Group

Examination (closed-book) 60% Individual

Total 100%

* Components of Coursework (40%) are as follows:

Class Participation 5% Individual Class Presentation 15% Group Quiz 20% Individual Grading for Class Participation and Class Presentation will be based on class attendance + quality of student’s contribution to class discussions, and quality of presentation made, respectively. Group members may get different marks for Class Presentation depending on their level of contribution. If a student is absent from a tutorial, he should apply for official leave of absence from his own school and submit the official email approval given by his own school, to his BU8201 tutor latest by Friday of the following week. Quiz is tentatively scheduled on Week beginning 31 Mar 2014. Further details will be provided by your tutor later. The quiz will be closed-book; formula sheet will NOT be provided. Attendance is compulsory for the quiz. Unless a student who is absent has an officially approved reason (e.g. medical leave approved by his own school management/admin), zero marks will be awarded. All application for approval is to be sought from the respective school management/admin. The relevant official approval email must be sent by the student to his tutor, latest by Fri 11 Apr 2014. Textbook Brigham, Eugene F., Joel F. Houston (adapted by Jun-ming Hsu, Yoon Kee Kong, and A.N. Bany Ariffin), Essentials of Financial Management, 3rd edition, Cengage Learning Asia. (ISBN-13: 978-981-4441-37-7). For those who want to learn more/need more help, there is an Option which has the hardcopy textbook (3

rd Edition) bundled with Cengage Now (3

rd Edition), which cost a few dollars more.

Cengage Now (3rd

Edition) includes online self-study tools, such as an E-book, extra problem sums, etc. Do note that the online access is for a limited period. Also, Cengage Now is for self-learning and is not essential for this course.

Course Instructor

Instructor Email Name (Email Address)

Kong Yoon Kee Kong Yoon Kee (Dr) (AYKKong@ntu.edu.sg)

Marina Lee Lee-Chin Foong Tow, Marina <AMLEE@ntu.edu.sg>

* Course coordinator

ASSESSMENT PLAN

Course Learning Objective Assessment Method

Acquisition of knowledge: Students should show they have acquired the core body of knowledge covered in the curriculum through lectures, tutorials and self-

Quiz that covers various topics in the core curriculum.

Metric: marks scored in the quiz.

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directed learning.

Problem solving & decision making: Students should demonstrate abilities to identify, analyze, and solve problems in business finance.

Students solve tutorial problems and make presentations of their solutions to the class.

Metric: marks obtained for the tutorial presentation.

Proposed Weekly Lecture Schedule (may be subjected to change)

Lecture

Week Starting

Tutorial Lecture Topics Reading

1 13 Jan

Introduction to Financial Management Interest Rate

C1, C7

2 20 Jan

T1 Time Value of Money Types of Financial Markets

C5, C2

3 27 Jan T2 Bonds and their Valuation C9

4 3 Feb T3 Risk and Rate of Return C8

5 10 Feb T4 Financial Statement and its Analysis C3, C4

6 17 Feb T5 Stocks and their Valuation C10

7 24 Feb T6 Cost of Capital C11

3 Mar Recess Week

8 10 Mar T7 Capital Budgeting C12

9 17 Mar

T8 Unequal Project Lives Cash Flow Estimation and Risk Analysis

C13

10 24 Mar T9 Capital Structure and Leverage C15

31 Mar QUIZ ELearning Lecture

11 7 Apr

T10 Distribution to Shareholders: Exams Briefing

C16

14 Apr T11 No Lecture, only Tutorial

Activity: Weekly Tutorial questions to be discussed will test and further reinforce concepts taught during lectures.

Coverage of Tutorial Session Quick Review of Important Concepts of Lecture Tutorial Presentation Questions and Answers on Lecture and Tutorial conducted by Tutor Questions and Feedback by Students: Other than during the lecture sessions, all questions from students should be addressed to their individual tutorial group instructors. However, students can email the course coordinator about their feedback on lecture delivery and scope/coverage. Tutor Email Address The email addresses of the various tutors are provided in this Course Outline and also in the individual tutorial EdveNTUre website. Calculator Financial calculator would facilitate faster calculations in a number of computation questions in BU8201. One possible choice of financial calculator is the Texas Instrument BA II Plus. Students are expected to be familiar with the use of their own calculator and the use of calculator will not be taught within this course.

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As per university procedure, all calculators (financial or non-financial) should bear the university approved sticker that signifies that they are acceptable for use during examinations. Calculator certified by a student’s respective school is allowed as long as it bears the university approved sticker and all regulations regarding its usage are to be adhered strictly. The rules governing use of calculator during examinations must be strictly adhered to.