FIN 3104 CORPORATE FINANCE Course Description and Outline for

					                                            FIN 3104
                                       CORPORATE FINANCE

                            Course Description and Outline for Spring 2003

Class Meetings:

       6:00 – 8:50 p.m.          Tuesday        McBryde 100

Instructor:

       Professor Keown
       Phone: 231-8647 (O)
       951-8676 (H) – Phone hours 8:00 a.m. – 9:00 p.m.
       Office hours: 12:15 – 1:30 p.m., Tuesday
       Office: Pamplin 2114

Required Materials:

       •      Financial Management (FM), 9th Edition, by Keown et. al., (Prentice-Hall, 2002).

       •      Course Pack for FIN 3104 (CP) (available at A-1 Copies in the University Mall) - Includes
              homework solutions, write up on core investments, and koofers.

       •      Ability to access internet. Specifically, you will be asked to access Current Events Articles
              on the myPhlip Companion Website (myPHLIP) at:

                                    http://www.prenhall.com/myphlip

              Once you get there register, then select the book, select the chapter, then select current events
              to take you to the appropriate reading, read the lead story and talking it over and thinking it
              through section. Check out the study guide, internet exercises, and the rest of the site.

       •      Ability to access the Personal Finance Navigator (PFN) on the internet. You will be asked to
              do several assignments from this web site. It is located at:

                                 http://www.cob.vt.edu/finance/Faculty/ajk/pfm/seconded

Recommended and Required Materials:

       You should be reading either the Wall Street Journal, Fortune, Barron’s or Business Week (you
       can sign up in class).

       You are required to purchase a financial calculator. It is something you will find useful your
       entire life. I recommend the Texas Instruments BAII-Plus.
Class Policies:

       1.         Incomplete grades are only given if requested by Dean Spencer or the Dean of the college
                  in which you are enrolled.

       2.         Each student is responsible for class attendance and preparation for class. Homework
                  will be randomly collected and given full credit if an effort has been made. If you have
                  to miss class for a school related reason, please notify me beforehand. If you are ill and
                  can’t make class, drop the assignment by Pamplin 1016 before class. If not, you will not
                  receive credit if there is an attendance quiz or homework collection. A note from Student
                  Health Services is also required. No exceptions (really - no exceptions).

       3.         The timing of the collection of homework and the material to be covered may be changed
                  at any time with notice during the class prior to the collection of the homework. Toward
                  the end of the term this often happens.

       4.         There will also be attendance quizzes randomly given. As such, you are responsible for
                  attending all classes.

Grading:

       Danforth and Donnally (in course pack)                                         2 points
       Homework, Attendance Quizzes, & Ethics Cases (randomly collected)              8 points
       Exam I                                                                         30 points
       Exam II                                                                        30 points
       Final Exam                                                                     30 points
        Total                                                                        100 points

My goal is to see you learn. Grades are a carrot that encourage learning. While I will not hesitate to
give a poor grade when your performance indicates that you have not learned the material, I want to see
everyone do well. Thus, I will do my best to help you understand the topics and to do well on the
exams. I realize that you have a busy schedule and often face difficulty in getting in enough time to
study. This makes it all the more important to come to class. This course covers a lot of material, so if
you don't keep up, you may be overwhelmed at test time. In the past I have found that students in my
courses experience unpleasant surprises on tests because they mistake my easy-going personality for an
easy-going tester. I don't want this to happen to you, so for your sake put in the time that you need to
really know the material. More than anything, this means coming to class and doing the homework
problems.
Class     Topic of Lecture                 Required                  Homework
Meeting                                    Reading                   Due

1/14       Course Introduction and         FM-1                      ---
           The Finance Function

          myPHLIP Current Events Reading (Chapter 1) (simply read the Lead Story & Digging
          Deeper): Efficiency Deficiency, Is Greed Good?, Executive Cash Machine: How a
          Pliable System Inflates Pay Levels, and The Drawbacks of Stock Option Fever, New
          Dot-Com Mantra: ‘Just Pay Me in Cash, Please’

1/21       Legal Form and Taxes            FM-1, FM-2                2-3A, 4A
                                           pages 36-38               (i.e., Chap. 2 prob. 3A,
                                                                     Chap. 2 prob. 4A, etc.)

           Financial Markets and           “Core Investments”        6-1A, 6-2A
           Interest Rates                  (from the coursepack)
                                           FM-6, pages 169-173
                                           FM-14

          myPHLIP Current Events Reading (Chapter 2) (simply read the Lead Story & Digging
          Deeper): It Sure Looks Like Insider Trading, The U.S. Stock Market Goes Decimal,
          Goodbye Fractions, Hello Pennies: The Fade of the Bid-ask Spread, and Bond Trades
          Head Online in New Plan

1/28       Financial Markets and Interest Rates (continued)

           Financial Statements            FM-2, pages 27-36 3-5A, 6A (part a only)
           & Ratios                        FM-3

           ROI                                                       John Manville
                                                                     Case, page 24-26 of FM

          myPHLIP Current Events Reading Chapter 3 (simply read the Lead Story & Digging
          Deeper): 10 Ways Earnings Lie, and A Good Resolution Would Be to Cut Debt

2/4        Time Value of Money-I           FM-5                      5-1A, 2A, 3A, 4A

           Time Value of Money-II                                    5-5A, 6A, 8A, 13A,
                                                                     15A, 21A, 22A, 23A,
                                                                     26A, 38A, 39A, 41A

          Personal Finance Navigator: Chapter 3, Chapter Interactive Exercise 3.4: Financial
          Calculators, Pick one financial calculator that you find to be the most useful, write it’s
          name and address on a piece of paper (this is what I will collect if I collect this
          homework).
Class          Topic of Lecture               Required                 Homework
Meeting                                       Reading                  Due

2/4 (Cont’d)   myPHLIP Current Events Reading Chapter 5 (simply read the Lead Story & Digging
               Deeper): Zen Banking: Some Interest Rates in Japan Drop Below Zero, Quick Riches:
               How Major Players Turn Lottery Jackpots Into a Guaranteed Bet, No Excuse for Not
               Retiring Rich, That Nest Egg May Have Hidden Cracks, and Checking the Concepts of
               Time Value of Money

2/11            Catch-Up and Review

2/18            Exam I (Exam grades will be posted by 2/20/03 on my office door. The last day to
                drop without penalty is Friday, 2/21/03.)

2/25            Return Exam

                Introduction to Risk          FM-6
                and Return

               myPHLIP Current Events Reading Chapter 6 (simply read the Lead Story & Digging
               Deeper): Jungle Fever: The Bre-X Saga Is The Greatest Gold Scam Ever, Diversifying
               the Green Party’s Green, or How Ralph Nader Could Get Richer, and It’s a Bird, It’s a
               Plane, It’s an Index, It’s a Stock, Sizing Up the Historical Equity Risk Premium,
               International Diversification: Harder than it Sounds, A Board of Directors says NO

               Personal Finance Navigator: Chapter 11, Chapter Interactive Exercise 11.1: Determine
               Your Risk Tolerance. (Print out your results).

3/4             No Class – Spring Break

3/11            More Risk and Return                                   6-6A, 7A, 8A, 9A, 13A

                Valuation                     FM-7, & FM-8             7-1A, 2A, 7A, 8-1A,
                                                                       3A, 8A, 11A, 14A

               Personal Finance Navigator: Chapter 11, Chapter Interactive Exercise 11.5: Developing
               Realistic Expectations

               Personal Finance Navigator: Chapter 12, Chapter Interactive Exercise 12.5 Stock Data
               for NYSE stocks, Exercise 12.6: Analysts Recommendations, & Exercise 12.7: Using
               Motley Fool. (print out results)

               Personal Finance Navigator: Chapter 14 Exercise 14.6: Determine How a Rate Changes
               Will Affect Your Bond's Current Value? (print out results)

               myPHLIP Current Events Reading Chapter 7 (simply read the Lead Story & Digging
               Deeper): Bowie Bonds Purchased By Prudential Insurance, Cash Flow? We Don’t Need
               No Stinkin Cash Flow, and Bonds-R-Us?
Class        Topic of Lecture                Required                Homework
Meeting                                      Reading                 Due

3/11 (Cont’d) myPHLIP Current Events Reading Chapter 8 (simply read the Lead Story & Digging
              Deeper): Net Stock Rules, What Bull Market?, and Value Judgment: Getting a Handle on
              Stocks’ Worth, Stock Plunges on Internet Hoax

3/18           Capital Budgeting             FM-9                    9-1A, 2A, 4A, 6A

             myPHLIP Current Events Reading Chapter 9 (simply read the Lead Story & Digging
             Deeper): On-line Auctions and the …, Michael Crichton: A Capital Budgeting Decision?

               Catch-Up and Review

3/25           Exam II

4/1            Return Exam

               Cash Flows and Capital        FM-10, pages            10-3A, 4A, 5A, 6A
               Budgeting                     310-324                 Ford Pinto Case,
                                                                     pages 306-307 of
                                                                     FM

             myPHLIP Current Events Reading Chapter 10 (simply read the Lead Story & Digging
             Deeper): Amazon.com: The Wild World of E-commerce, GM Hopes to Rev Up Sales
             With a New Cadillac

4/8            Danforth & Donnally                                   Case: Danforth & Donnally,
                                                                     located in your course pack
                                                                     around page 34 or so (answer
                                                                     1 through 5 at the end of the
                                                                     case)

               Project Ranking and           FM-10, pages            10-10A, 11A, 12A (parts a-d
               Capital Budgeting             324-333                 & only the replacement chain
                                                                     on part e)

4/15           Capital Budgeting Under       FM-11                   11-1A, 3A, 5A
               Uncertainty

             myPHLIP Current Events Reading Chapter 11 (simply read the Lead Story & Digging
             Deeper): Exploiting Uncertainty: The “Real-Options” Revolution in Decision-Making,
             Saving a Company by Bankrupting it?

               Cost of Capital I             FM-12                   Dumping Case from
                                                                     378-379 of FM

             myPHLIP Current Events Reading Chapter 12 (simply read the Lead Story & Digging
             Deeper): Soaring Rates: Do They Threaten Growth? A Less Exuberant Wall Street Isn’t
             All That Bad
Class         Topic of Lecture                Required                Homework
Meeting                                       Reading                 Due

4/22           Cost of Capital II             FM-13, 412-416, 421     12-1A, 2A, 3A, 4A, 7A, 8A
                                                                      Integrative Problem (page
                                                                      406

               Leverage and Optimal           FM-13                   15-5A, 11A, 20A
               Capital Structure

4/29           Catch Up Review and Questions

               Go Over Koofers

   Class Final: 7:00 p.m.- 9:00 p.m., Saturday, May 3, 2003

Final – You MUST Bring a Picture I.D. to the Final. Cover material since second exam in addition to
the 11 ratios and time value of money.

				
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