Financial Management Characteristic Line

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					University of N. Carolina at Wilmington
Cameron School of Business
Fin 336 – Intermediate Corporate Finance (Spring 2008)

Instructor: Dr. Cetin Ciner
220-E Cameron Hall
Office (Phone): 910-962 7497
Office (Fax): 910-962 7464
E-mail: (Preferred form of communication)

Goal: To provide an understanding of the methods and principles of the finance
discipline to enable effective financial decision making in a corporation.

Course Overview: This course is designed for a thorough review of corporation financial
management. The course builds on initial studies of financial management and reflects on
the view of the modern finance theory, which suggests that managers should aim to
maximize shareholder wealth.       The discussions will cover issues faced by finance
officers such as decisions on capital budgeting projects, use of debt and its impact on
value, optimal capital structure and repayments to shareholders in the form of dividends
and share repurchases. Throughout the course, we will demonstrate the superiority of the
NPV as a decision-making rule and will also highlight its implementation under several

Text: Intermediate Financial Management, Brigham & Daves, 9th Edition, 2006,
Thomson South-Western

Office Hours:         Monday                 12.00- 5.00
                      Wednesday:             12.00- 5.00

Web Presence: The class web page contains the syllabus and powerpoint slides for
lectures, as well as readers and announcements about class activities and events related to
corporation finance. Find the link to this course at

Reading: You are encouraged to regularly read the Wall Street Journal and/or the
Financial Times. Other assigned readers will be placed either on reserve in the library or
on the web page.

Grading: The following scale will be used to determine the end-of-term grades:

                              B+     88-89           C+     78-79          D+      68-69
A      92+                    B      82-87           C      72-77          D       62-67
A-     90-91                  B-     80-81           C-     70-71          D-      60-61
F      Below 60
Graded Materials              Mid-term examination I                       30 points
                              Mid-term examination II                      30 points
                              Final examination                            40 points
                              Total                                        100 points

Examinations: All examinations will be closed-note, closed book and will consist of
multiple choice questions. However, you can use a single 3x5 note card that contains only
formula. You must turn in the card with your exam, if you choose to use one.

Additional Points:

Integrity: Full compliance with the University rules and regulations on academic
integrity and honesty is expected. The Academic Honor Code can be found in the UNCW
Student Handbook and Code of Student Life.

Disabilities: Appropriate academic support is available for any student with a
documented disability. Please notify me and/or contact the Office of Disability Services
(3746) for further information.

Calculator: A financial calculator, and the ability to use it, is required for this course.
The BA II+ is recommended and should be brought to class every day. Time Value of
Money exercises, including a list explaining BA II+ keys, are available online.
Syllabus (Tentative)

1/10               Introduction

         Pass out syllabus, take attendance, other “house-keeping” activities
         Goal of the firm, financial decisions and agency relationships

1/15               Risk and Return I                                                2

         Expected return and risk
         Portfolio risk, beta
         Characteristic Line and SML

1/17               cont’d

1/22               Risk and Return II                                               3

         Portfolio Diversification
         The CML and SML, the efficient frontier
         Systematic and Unsystematic Risk, CAPM

1/24      Bond Valuation & Time Value of Money                                      4

         Basic TVM skills
         Key characteristics of bonds
         Bond valuation, ratings and yield spreads
         Term Structure of Interest Rates

1/29      cont’d

1/31      Stock Valuation                                                           5

      -   Shareholder rights
      -   Stock valuation models
         Market Efficiency

2/5       cont’d

2/7       Review

2/12      Midterm Examination I
2/14             Accounting for Financial Management   7

      -   Financial Statements
      -   Balance Sheet and Income Statement
      -   Net Cash Flow

2/19             cont’d

2/21             Financial Statement Analysis          8

      -   Accounting for financial management
      -   Cash flow analysis
      -   A review of financial ratios

2/26             Business Week- No Class

2/28             cont’d                                8

3/4              Spring Vacation- No Class

3/6              Spring Vacation- No Class

3/11             Financial Planning and Forecasting    9

      -   Sales forecast
      -   The percent of sales method
      -   The AFN formula

3/13             Determining the Cost of Capital       10

      -   Weighted Average Cost of Capital
      -   Estimating Component Costs
      -   Adjusting for Risk

3/18             cont’d

3/20             State Holiday- No Class

3/25             Review for Midterm II

3/27             Midterm Examination II
4/1              Corporate Value and Value-Based Management   11

      -   The corporate valuation model
      -   Value-based management
      -   Corporate governance

4/3              cont’d

4/8              Capital Budgeting: Decision Criteria         12

      -   Decision rules and the NPV
      -   Project classifications
      -   Business practices

4/10             cont’d

4/15             Capital Budgeting: Estimating Cash Flows     13

      -   Approaches to estimating cash flows
      -   Comparing unequal lived projects
      -   Inflation adjustments

4/17             cont’d

4/22             Multinational Financial Management           27

      -   Multinational vs. domestic financial management
      -   Spot and forward exchange rates
      -   Interest rate and purchasing power parities

4/24             Review for Final Examination

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