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FIN 3030-03 Business Finance

Course Objectives/Student Learning Outcomes

Objective 1. Describe and create financial statements. Calculate and derive financial ratios for financial analysis. 

Objective 2. Derive and determine present values and future values of cash flows. Apply time value of money for stock & bond valuations.

Objective 3. Assess and determine interest rate risk, default risk and maturity risk of corporate bonds. Determine required rates of return and values of corporate bonds.

Objective 4.  Apply risk reduction to the assessment of undiversifiable risk for common stocks. Determine required rates of return and values of common stocks.

Objective 5. Discuss capital budgeting techniques of net present value and internal rate of return. Identify investments that are acceptable.

Objective 6. Discuss capital structure, cost of debt and cost of equity. Determine and derive cost of capital.

Course Prerequisite

ACCT 2100

Course Activities, Course Assignments, and Exams 

Weekly Activities

McGraw-Hill Connect Reading Assignments & Questions 10% (300 points)

McGraw-Hill Connect Videos & Questions 10% (300 points)

Professor Loo Lecture Videos & Quizzes 15% (450 points)

Chapter Homework Assignments 15% (450 points)

Exams

Midterm One 15% (450 points)

Midterm Two 15% (450 points)

Final Exam 20% (600 points)

Total 100% (3000 points)

Late assignments will not be accepted.  No make-up exams will be given without prior approval of the instructor.

Grading of Assignments

1. McGraw Hill Connect Reading Assignments & Questions are automatically graded, and credits are given upon completion.  

2. McGraw Hill Connect Videos & Questions are automatically graded. Unlimited attempts are allowed. For each new attempt, students start over.  Connect video assignments are automatically submitted on the respective due dates.

3. Professor Loo Lecture Videos & Quizzes are automatically graded, and unlimited attempts are allowed.

4. Chapter Homework Assignments are automatically graded. Unlimited attempts are allowed.  Homework assignments are automatically submitted on the due date.

Grading Policy

A (93% to 100%) A- (90% to 92%) B+ (87% to 89%)

B (83% to 86%) B- (80% to 82%) C+ (77% to 79%)

C (73% to 76%) C- (70% to 72%) D+ (67% to 69%)

D (63% to 66%) D- (60% to 62%) F (Below 60%)

Communication Guidelines (Netiquette)

Respond to your classmates and instructor in a respectful manner, keeping in mind the following: 

· Treat others as you wish to be treated.

· Use supportive and constructive language.

· Use full sentences and proper grammar.

· Respect diversity, equity, and inclusion.

For more information on Netiquette, please see the 15 Rules of Netiquette for Online Discussion Boards

Chapter Objectives, Weekly Activities and Assignments

Week 1 and Week 2 Module (1/23 to 2/5)

Chapter 2 Financial Statements, Taxes, and Cash Flow

· Balance Sheet, Income Statement, Statement of Cash Flow

Chapter Learning Objectives:

1. Describe balance sheet, income statement, and statement of cash flow.

2. Create balance sheet, income statement and statement of cash flow.  

3. Use financial information contained in the financial statements to derive key financial ratios for financial analysis.   

Learning Activities and Assignments (Due 2/5)

1. Chapter McGraw-Hill Connect Reading Assignments/Practice Questions

2. Chapter McGraw-Hill Connect Videos/Questions

3. Chapter Professor Loo Lecture Videos/Quizzes

4. Chapter Homework Assignment

Week 3 Module (2/6 to 2/12)

Chapter 3 Working with Financial Statements

· Standardized Financial Statements, Financial Ratios and Analysis, The DuPont Identity

Chapter Learning Objectives

1. Derive and define key financial ratios.

2. Apply financial ratios to determine profitability, capital structure, liquidity, asset utilization and return to stockholders of a corporation.

3. Evaluate financial ratios and compare financial performance of a corporation both over a period and against its industry average.

4. Identify a corporation's financial strengths and weaknesses by using financial ratios.

Learning Activities and Assignments (Due 2/12)

1. Chapter McGraw-Hill Connect Reading Assignments/Practice Questions

2. Chapter McGraw-Hill Connect Videos/Questions

3. Chapter Professor Loo Lecture Videos/Quizzes

4. Chapter Homework Assignment

Week 4 Module (2/13 to 2/19)

Chapter 4 Introduction to Valuation: The Time Value of Money

· Future Value and Compounding, Present Value and Discounting

Chapter Learning Objectives

1. Identify cash flows based on the timing and the amount of the cash flow.

2. Evaluate the power of compounding.

3. Determine present values and future values of cash flows.

4. Investigate how interest rate and number of time periods affect present value and future value.

5. Apply present value and future value in valuation of assets.

 Learning Activities and Assignments (Due 2/19)

1. Chapter McGraw-Hill Connect Reading Assignments/Practice Questions

2. Chapter McGraw-Hill Connect Videos/Questions

3. Chapter Professor Loo Lecture Videos/Quizzes

4. Chapter Homework Assignment

Week 5 Module (2/20 to 2/26)

Chapter 5 Discounted Cash Flow Valuation

· Future and Present Value of Multiple Cash Flows, Valuing Level Cash Flows, Comparing Rates

Chapter Learning Objectives

1. Identify and describe cash flows of financial assets.

2. Calculate present value and future value of multiple cash flows including annuity and perpetuity.

3. Analyze the effect of compounding using different compounding periods.

4. Compare APR (annual percentage rate) to EAR (effective annual rate).

5. Compare loan types: discount loan, interest only loan and amortized loan.  

Learning Activities and Assignments (Due 2/26)

1. Chapter McGraw-Hill Connect Reading Assignments/Practice Questions

2. Chapter McGraw-Hill Connect Videos/Questions

3. Chapter Professor Loo Lecture Videos/Quizzes

4. Chapter Homework Assignment

Week 6 (2/27-3/5)

1st Midterm Exam

Week 7 Module (3/6 to 3/12)

Chapter 6 Interest Rates and Bond Valuation

· Bonds and Bond Valuation, Inflation and Interest Rates, Determinants of Bond Yields

Chapter Learning Objectives

1. Illustrate cash flows of corporate bonds.

2. Discuss default risk and maturity risk of corporate bonds.

3. Determine risks and returns of corporate bonds.

4. Determine values of corporate bonds.

5. Analyze how changes in interest rates affect values of corporate bonds.

6. Compare interest risk of long-term bonds vs short-term bonds.

Learning Activities and Assignments (Due 3/12)

1. Chapter McGraw-Hill Connect Reading Assignments/Practice Questions

2. Chapter McGraw-Hill Connect Videos/Questions

3. Chapter Professor Loo Lecture Videos/Quizzes

4. Chapter Homework Assignment

Week 8 Module (3/13 to 3/19)

Chapter 11 Risk and Return

· Expected Return and Variance, Risk: Systematic and Unsystematic, Systematic Risk and Beta, The Security Market Line

Chapter Learning Objectives

1. Estimate expected return and standard deviation of return.

2. Investigate the effect of diversification by holding a large number of assets in a portfolio.

3. Identify diversifiable risk and undiversifiable risk.

4. Estimate beta of individual stock.

5. Analyze risk and return relationship for individual stocks.

6. Determine required return of individual stocks based on their systematic risk.

Learning Activities and Assignments (Due 3/19)

1. Chapter McGraw-Hill Connect Reading Assignments/Practice Questions

2. Chapter McGraw-Hill Connect Videos/Questions

3. Chapter Professor Loo Lecture Videos/Quizzes

4. Chapter Homework Assignment

Week 9 Module (3/20 to 3/26)

Chapter 7 Equity Markets and Stock Valuation

· Common Stock Valuation

Chapter Learning Objectives

1. Identify expected future cash flows of common stocks.

2. Estimate required rates of return of common stocks.

3. Determine intrinsic values of common stocks.

4. Identify overpriced, underpriced and fairly priced common stocks.

5. Compare required rates of return to expected rates of return for common stocks.

Learning Activities and Assignments (Due 3/26)

1. Chapter McGraw-Hill Connect Reading Assignments/Practice Questions

2. Chapter McGraw-Hill Connect Videos/Questions

3. Chapter Professor Loo Lecture Videos/Quizzes

4. Chapter Homework Assignment

Week 10 Spring Break (3/27 to 4/2)

Week 11 (4/3 to 4/9)

2^nd Midterm Exam

Week 12 & Week 13 Module (4/10 to 4/23)

Chapter 8 Net Present Value and Other Investment Criteria

· Net Present Value, Internal Rate of Return

Chapter Learning Objectives

1. Describe and determine net present value of an investment.

2. Examine how net present value is affected by cash flows and cost of capital.

3. Describe and determine net present value. Calculate net present value. Identify acceptable investments by using net present value criterion.

4. Describe and determine internal rate of return of an investment. Calculate internal rate of return. Identify acceptable investments by using internal rate of return.

5. Define mutually exclusive investments and marginal investments.

6. Compare net present value criterion and internal rate of return criterion.

Learning Activities and Assignments (Due 4/23)

1. Chapter McGraw-Hill Connect Reading Assignments/Practice Questions

2. Chapter McGraw-Hill Connect Videos/Questions

3. Chapter Professor Loo Lecture Videos/Quizzes

4. Chapter Homework Assignment

Week 14 Module (4/24 to 4/30)

Chapter 9 Making Capital Investment Decisions

· Incremental Cash Flows, More on Project Cash Flow

Chapter Learning Objectives 

1. Describe and determine change in operating cash flows of an investment

2. Describe and determine change in net working capital of an investment.

3. Describe and determine change in salvage value net of tax of an investment.

4. Describe and determine change in capital outlay of an investment.

5. Apply Net Present Value (NPV) rule in making investment decisions.

6. Apply Internal Rate of Return (IRR) rule in making investment decisions. 

Learning Activities and Assignments (Due 4/30)

1. Chapter McGraw-Hill Connect Reading Assignments/Practice Questions

2. Chapter McGraw-Hill Connect Videos/Questions

3. Chapter Professor Loo Lecture Videos/Quizzes

4. Chapter Homework Assignments

Week 15 & Week 16 Module (5/1 to 5/14)

Chapter 12 Cost of Capital

· The Cost of Equity, The Cost of Debt and Preferred Stock, The Weighted Average Cost of Capital

Chapter Learning Objectives

1. Describe and determine before and after-tax cost of debt.

2. Describe and determine cost of equity.

3. Describe and determine the market value weights used to determine the weighted average cost of capital.

4. Describe and determine the weighted average cost of capital. Calculate the weighted average cost of capital.

5. Describe and determine how cost of capital is used when applying net present value rule in making capital investment decisions.

6. Describe and determine how cost of capital is used when applying internal rate of return rule in making capital investment decisions.

Learning Activities and Assignments (Due 5/14))

1. Chapter McGraw-Hill Connect Reading Assignments/Practice Questions

2. Chapter McGraw-Hill Connect Videos/Questions

3. Chapter Professor Loo Lecture Videos/Quizzes

4. Chapter Homework Assignment

Week 17 (5/15 to 5/21)

Final Exam