FIN 301: Principles of Finance
Spring Semester 2011
Class Meeting Times and Location:
5:30 – 7:00 pm on Tuesdays and Thursdays in Room ---- on the Main Campus.
Instructor: Dr. Mary H. Kelly
Office: Room 151B, Main Campus
Department: Accounting, Finance and Economics
Department Administrative Assistant: Ms. Bonnie Babbitt-Stone can make appointments, etc.
Department Contacts: Bonnie at 254-519-5725 or email@example.com
Mondays: 11:00 – 12:00 noon Virtual Office Hours
Tuesdays: 1:00 – 5:00 pm
Wednesdays: 1:00 – 5:00 pm
Thursdays: 1:00 – 5:00 pm
Fridays: 11:00 – 12:00 noon Virtual Office Hours
Saturdays: 11:30 – 1:00 pm on 1/22, 2/12, 3/4, 4/2, 4/30
By appointment for other days or times.
I am on campus much more than the office hours listed above and you are encouraged to stop
by my office any time you are on campus. Apart from office hours, the best way to reach me
is email with Fin 301 in the subject line. I generally respond within a day, especially during
virtual office hours, when I often respond immediately.
The website with online information for this hybrid course is: http://blackboard.tarleton.edu.
Students should check the site continuously throughout the semester for Announcements,
Assignments, Exams, Templates for Spreadsheet/Excel Assignments, Solutions, and other
helpful information posted on Blackboard, especially since this course has both on-site
and online components.
UNILERT is an emergency notification service that gives Texas A&M University-Central Texas the
ability to communicate health and safety emergency information quickly via email and text message.
By enrolling in UNILERT, university officials can quickly pass on safety-related information,
regardless of your location. Please enroll today at TAMUCT.org/UNILERT.
Important Dates this Semester:
January 24 is the deadline to apply for Spring Graduation.
March 14-18 is Spring Break.
1.0 Course Description:
2.0 Course Objectives:
2.1 Student Learning Objectives:
Upon completion of this course students should understand:
The basics of corporate decision-making aimed at maximizing a firm's stock price.
The importance of using basic accounting statements in financial analysis.
The importance of financial forecasting in overall financial planning.
The basics of a firm's financial environment as it pertains to interest rates.
The basics of risk and return as they relate to stocks in isolation and in a portfolio.
The various stock valuation models.
Time value of money methods for bond and stock valuation.
The importance of a firm's bond ratings.
The basics of capital budgeting, including techniques of cash flow estimation.
Risk analysis in capital budgeting decisions.
How leverage and capital structure are related to risk and expected return.
The basic meanings of a firm's dividend policy.
Various working capital management strategies.
2.2 Competency Goals Statement:
Upon completion of this course the student should be able to:
Understand the agency relationship, recognize agency violations and unethical corporate behavior.
Read real-world financial statements and draw accurate conclusions about the firm's financial health.
Construct and interpret important financial ratios.
Make informed short- and long-run financing decisions based upon expected movements in interest rates.
Apply risk/ return concepts in assessing the required rate of return for suppliers of debt and equity capital.
Apply time value of money methods to corporate decision-making.
Undertake fundamental valuation of the firm's debt and equity securities using prescribed models.
Compute and utilize the firm's cost of capital in financial decision-making.
Make investment decisions using established capital budgeting techniques.
Understand the different types of risk associated with various forms of leverage.
Understand the implications of a sub-optimal capital structure.
Recognize the real-world factors that impact the capital structure decision.
Understand dividends and share repurchases as they impact firm valuation.
Understand working capital management policies.
Understand and be able to use the internet as an important source of financial data and information.
Be literate with a financial calculator.
3.0 Required Reading, Materials, and Textbooks:
(1) Text: Essentials of Corporate Finance, 7th edition, by Ross, Westerfield and Jordan.
(2) The text has a companion Study Guide/Student Problem Manual that is recommended by the instructor
and former students.
(3) Financial Calculator: Different models require different keystrokes, which can lead to different answers
and the wrong financial decision; hence, YOU must know how to use the calculator you decide to use
for this course. Only a limited amount of classroom time will be spent confirming proper use of
calculators and the most popular on campus is the TI BA II Plus.
4.0 Course Requirements:
Course Prerequisites: ACC 2033, ACC 2043 and ECO 2013. You need to be able to use the basic tools
of accounting - balance sheets and income statements - and you need to be comfortable with basic
algebra. Without skills in basic accounting and algebra, you will have a very difficult time in this course.
Course Calendar: Attached to the end of this syllabus is the Course Calendar - a schedule of course topics
and assignments required for completion of this course; however, depending on class dynamics, we may
move more quickly or more slowly to enhance the learning environment. Any changes made at the
discretion of the instructor will be announced in class and posted on Blackboard.
The Course Calendar shows the Assignment(s) due for that class and learning outcomes targeted by that
particular assignment. The format of this course requires you to work on your own a great deal. To facilitate
your learning, solutions to problems/cases may be posted on Blackboard and can total many pages; hence,
be fiscally prudent with any printing.
5.0 Complete Course Calendar:
The complete course calendar is attached to this syllabus and any changes made at the discretion of the
instructor will be posted on Blackboard.
6.0 Grading Criteria and Rubrics:
The total grade will come from Five in-class Assignments, Six Exams, and Class Participation.
A maximum of 1000 points will be awarded as follows:
Each of the five in-class assignments will be worth a maximum of 40 points. If you miss a class,
then the assignment(s) must be emailed to the professor within 48 hours of the missed class to earn
any points. If you attend class, it is expected that you will complete the assignment during class to
earn full credit for each assignment.
Each of the six exams will be worth a maximum of 125 points, consisting of questions that are
multiple choice, true or false, and/or short essays that cover both concepts and calculations. The dates
of each exam will be as scheduled on the attached Course Calendar, with changes subject to the
discretion of the professor and posted on Blackboard. A missed exam will count as a zero unless prior
arrangements have been made with the professor, who reserves the right to allow a missed exam to be
made up by applying its weight to another exam or assignment. Any written assignments will be
graded for application of APA style, as well as proper spelling, grammar, writing skills, and content.
Class Participation will be worth a maximum of 50 points awarded by the professor at the end of the
semester and based on each student’s contribution to the learning environment.
Incomplete Policy: A grade of “Incomplete” can be given only under extenuating circumstances,
such as serious illness or other necessary absences. Summer semester grades of “Incomplete” must
be completed in accordance with university policy. If this does not happen, then the “Incomplete”
will be changed to an “F.” If you are not earning at least a “C” in the course, and have not completed
most of the course, then an “Incomplete” grade may not be appropriate.
Grading Scale will be as described below.
A = 92 -100% or 920 - 1000 points
B = 83 - 91% or 830 - 919 points
C = 74 - 82% or 740 - 829 points
D = 65 - 73% or 650 - 739 points
F = below 65 or below 650 points
7.0 Drop and Withdrawal Policy:
If you discover that you need to drop this class, you must go to the Records Office and ask for
necessary paperwork. Professors cannot drop students; this is always the responsibility of the student. The
record’s office will give a deadline for which the form must be returned, completed, and signed. Once you
return the signed form to the records office and wait 24 hours, you must go into Duck Trax and confirm
that you are no longer enrolled. If you are still enrolled, FOLLOW-UP with the records office immediately.
You are to attend class until the procedure is complete to avoid penalty for absence. Should you miss the
deadline or fail to follow the procedure, you will receive an F in the course.
8.0 Academic Integrity:
Texas A&M University - Central Texas expects all students to maintain high standards of personal and
scholarly conduct. Students guilty of academic dishonestly are subject to disciplinary action. Academic
dishonesty includes, but is not limited to, cheating on an examination or other academic work, plagiarism,
collusion, and the abuse of resource materials. The faculty member is responsible for initiating action for
each case of academic dishonestly. More information can be found at www.tamuct.org/studentconduct.
9.0 Disability Support Services:
If you have or believe you have a disability, may wish to self-identify. You can do so by providing
documentation to the Academic Support Programs Coordinator. Students are encouraged to seek
information about accommodations to help assure success in this class. Please contact Ryan Thompson
at 254-519-5796 or Main Building Room 114. Additional information at www.TAMUCT.org/StudentAffairs.
This is an Online Tutoring platform that enables TAMU-CT students to log-in and receive FREE online
tutoring and writing support. This tool provides tutoring in Mathematics, Writing, General and Organic
Chemistry, Physics, Biology, Introduction to Human Anatomy and Physiology, Accounting, Economics,
Introductory Finance, Spanish, and Statistics.
Access: Students will have access after 5:00pm on the 4th class day. A student may gain access by going to
www.smarthinking.com and entering his/her University Student ID as the username and his/her Birthday
(mmddyyyy) as the password. Once you log-in, you have the option to change your log-in information. If
you have difficulties contact Student Affairs at 254-519-572110.
11.0 Library Services:
INFORMATION LITERACY focuses on research skills which prepare individuals to live and work in an
information-centered society. Librarians will work with students in the development of critical reasoning,
ethical use of information, and the appropriate use of secondary research techniques. Help may include,
yet is not limited to: exploration of information resources such as library collections and services,
identification of subject databases and scholarly journals, and execution of effective search strategies.
Library Resources are outlined and accessed at http://www.tarleton.edu/centraltexas/departments/library/.
12. Additional Information:
An important component of a learner-centered syllabus is a section directed to you, as a student, that
explains the instructor’s teaching philosophy for this course. Here it is:
I hold a special interest in your professional development – as a scholar and as a productive citizen.
Please don’t hesitate to discuss the course or related matters with me and remember: the best way to
reach me is email: firstname.lastname@example.org.
My expectations for you are to develop reasonable proficiency with financial theories and their
applications to myriad decisions at the corporate level, as well as the consumer level.
Week # Dates Chapters Topics, Learning Objectives, Assignments, Due Dates
1 Jan 18, 20 Introduction Discuss Syllabus, Text, Careers, Video on Careers
Ch 1 An Overview of Financial Management and the Financial Environment
2 Jan 25, 27 Ch 2 Financial Statements, Calculation of Cash Flow, and Taxes
In-class Assignment TBD
3 Feb 1, 3 Exam 1
Ch 3 Analysis of Financial Statements
Discuss Productivity Ratios (not in text)
In-class Assignment: TBD
4 Feb 8, 10 Ch 3 Continued
5 Feb 15, 17 Ch 4 Time Value of Money Applications for topics in this course::
(1) Lumps Sums (chap 4)
(2) Multiple or Uneven Cash Flows (chap 5)
(3) Annuities (chap 5)
(4) Bonds (chap 6)
(5) Stocks (chap 7 and chaps 10, 11on risk/return metrics)
(6) Capital Budgeting Decisions (chap 8 - mainly NPV, IRR,
and Payback Period)
(7) Capital Structure Decisions (chap 12 - calculating wacc;
chap 13 - effects of capital structure on firm value)
In-class Assignment: TBD
6 Feb 22, NO CLASS Professor out of town attending a Conference
Feb 24 Class Meets Continue Ch 4: TVM for Lump Sums
7 March 1, 3 Ch 5 TVM for Multiple Cash Flows and Annuities
8 March 8, 10 Exam 3 Tues - Professor may be out of town attending a Conference
Career Services in the Classroom
Th – Exam 3
9 March 15, 17 NO CLASSES SPRING BREAK
10 March 22, 24 Ch 4, 5 Review TVM for Lump Sums, Multiple Cash Flows, Annuities
Ch 6 Bond Valuation and Bond Market Dynamics
In-class Assignment TBD
11 March 29, 31 Ch 7 Stock Valuation
12 April 5, 7 Ch 10 Stock Valuation for risk and return measurements
In-class Assignment TBD
13 April 12, 14 Ch 8 Capital Budgeting Analysis and Decision Making
14 April 19, 21 Ch 12 Capital Structure Analysis and Decision Making
Ch 14 Dividend Policy
15 April 26, 28 Ch 17 Short-term or Working Capital Analysis and Decision Making
16 May 3, 5 Review for Final
Exam 6 Cumulative Final Exam