Hagerstown Community College OFFICIAL COURSE SYLLABUS DOCUMENT. COURSE: MGT 203 Finance SEMESTER/YEAR: Spring 2014

Transcription

1 Hagerstown Community College OFFICIAL COURSE SYLLABUS DOCUMENT COURSE: MGT 203 Finance SEMESTER/YEAR: Spring 2014 INSTRUCTOR: Lori Spessard CONTACT INFORMATION: Office: LRC 113 Phone: Office Hours: MTWR 10:15 11:30 AM COURSE DESRIPTION: This course encompasses the basics of managerial finance. Emphasis is placed on financial analysis and forecasting, budgeting, cash management, and short-term and long-term sources of funds. Recommended: successful completion of ACC 101. Semester offered: Spring. 3 credits. TEXTBOOK & MATERIALS: Brooks, R. (2012) Financial Management: Core Concepts (2nd ed.). New Jersey: Pearson. ISBN (textbook and MyFinanceLab code) ISBN (ebook and MyFinanceLab code) Access to MyFinanceLab is required for the course. The text is available in the HCC bookstore as a bundle with an access code to MyFinanceLab. Access to Microsoft Excel (or the Open Office version) is required for this course. Some students also like to use a financial calculator (the TI BA-II Plus is recommended). STUDENT LEARNING OUTCOMES: Students who successfully complete this course will be able to: 1. Use time value of money concepts to improve financial decision-making. 2. Describe different types of risk, measurements of risk, and the relationship between risk and return. 3. Demonstrate an understanding of the debt and equity financing, securities markets, and interest rates. 4. Use financial management concepts and tools to evaluate business investment decisions and performance. MGT 203 Finance SP14 Page 1 of 6

2 ASSESSMENT PROCEDURES: Your final grade will be based on the following: Homework 20% Quizzes 20% Exams 30% Assignments 30% Homework and quizzes are completed online using MyFinanceLab software. Exams are also in MyFinanceLab, but must be completed under proctored conditions. Assignments may include written cases, small projects, or discussions. Additional information will be provided in class and on MyFinanceLab. COURSE POLICIES: Total Hours of Coursework: This is a three-credit, college-level course. To earn one academic credit at HCC, students are required to complete a minimum of 37.5 clock hours (45 fifty-minute academic hours) of coursework per semester. Those hours of coursework may be completed through a combination of hours within the classroom and hours outside the classroom. Certain courses may require more than the 37.5 minimum hours of coursework per credit. For most classes, students should expect to do at least 2 hours of coursework outside of class for each hour of in-class coursework. You should expect to spend about six hours per week outside of class in order to succeed. Attendance Policy: Students are expected to actively participate in this course and adhere to the course schedule. In the case of absence due to emergency (illness, death in the family, accident), or participation in official College functions, it is the student s responsibility to confer with the instructor about the absence and missed course work. Further, it is the student s responsibility to withdraw officially from any class which he/she ceases to attend. Failure to do so will result in the recording of an F grade. The College s attendance policy can be found in the College Catalog. Late or missed assignments: Because all homework, writing assignments, and quizzes will be available for at least a week prior to the due date, there will be no due date extensions or make-ups for these assignments. You may miss one each of the homework, quizzes, and writing assignments with no penalty; your lowest score in each of these categories will be dropped. If you experience an emergency (as defined in Attendance Policy above), and miss an exam, contact your instructor. Under emergency circumstances only, you may be given a make-up exam at the discretion of the instructor. Academic Integrity: The HCC Student Code of Conduct is published in the College Guide: A Handbook Planner for Students and may be obtained in the Student Activities Office. The Code of Conduct includes principles, rights, and prohibited conduct related to academic integrity and due process. Academic dishonesty will be dealt with in accordance with the College s policies and procedures. Services for Students with Special Needs: Students who have special needs are encouraged to identify themselves to the Coordinator of Disability Services as early as possible. Reasonable accommodations MGT 203 Finance SP14 Page 2 of 6

3 based on current documentation are provided to qualified students. For more information, contact the coordinator of disability services at (TTY ). Once approved by the coordinator, it is your responsibility to communicate directly with the instructor about the accommodations you require. The instructor reserves the right to modify the course content, schedule, and/or assessment procedures as deemed necessary. TOPICAL OUTLINE: Topic Financial Management Ch. 1 Financial Statements Ch. 2 Time Value of Money Ch. 3 Time Value of Money (cont.) Ch. 4 EXAM 1 Interest Rates Ch. 5 Bonds & Bond Valuation Ch. 6 Stocks & Stock Valuation Ch. 7 Risk & Return Ch. 8 EXAM 2 Capital Budgeting Ch. 9 Cash Flow Estimation Ch. 10 The Cost of Capital Ch. 11 Forecasting & Short-Term Planning Ch. 12 EXAM 3 COURSE CONTENT OBJECTIVES: Chapter 1 Describe the four main areas of finance and the three main categories of financial management. Explain the main objective of a financial manager and how it may be achieved. Differentiate between the legal forms of business. Describe the principal-agent problem and agency theory. Chapter 2 Describe the balance sheet and income statement. Describe the components of cash flow. Begin using financial statements to analyze a business. Explain how to find and use financial statement information online. Chapter 3 Calculate future values and understand compounding. MGT 203 Finance SP14 Page 3 of 6

4 Calculate present values and understand discounting. Calculate the interest rate or time periods implied in a TVM problem. Explain the Rule of 72. Chapter 4 Calculate the future value of multiple cash flows. Calculate the future value of an annuity. Calculate the present value of an annuity. Adjust the annuity formula for present value and future value for an annuity due, and understand the concept of a perpetuity. Distinguish between the different types of loan repayments: discount loans, interest-only loans, and amortized loans. Calculate waiting time and interest rates for an annuity. Chapter 5 Discuss how interest rates are quoted, and compute the effective annual rate (EAR) on a loan or investment. Apply the TVM equations by accounting for the compounding periods per year. Explain the real rate of interest and the effect of inflation on nominal interest rates. Summarize the two major premiums that differentiate interest rates: the default premium and the maturity premium. Chapter 6 Understand basic bond terminology and apply the time value of money equation in pricing bonds. Understand the difference between annual and semiannual bonds and note the key features of zero-coupon bonds. Explain the relationship between the coupon rate and the yield to maturity. Describe bond ratings and why ratings affect bond prices. Chapter 7 Explain the basic characteristics of common stock. Define the primary market and the secondary market. Calculate the value of a stock given a history of dividend payments. Explain the shortcomings of the dividend pricing models. Describe the concept of efficient markets. Chapter 8 Calculate profits and returns on an investment and convert holding period returns to annual returns. Define risk and explain how uncertainty relates to risk. Describe the historical returns of various investment choices. Interpret the trade-off between risk and return. Understand when and why diversification works to minimize risk, and understand the difference between systematic and unsystematic risk. MGT 203 Finance SP14 Page 4 of 6

5 Explain beta as a measure of risk in a well-diversified portfolio. Illustrate how the security market line and the capital asset pricing model represent the twoparameter world of risk and return. Chapter 9 Explain capital budgeting and differentiate between short-term and long-term budgeting decisions. Explain the payback model and its two significant weaknesses. Understand the net present value (NPV) decision model and appreciate why it is the preferred criterion for evaluating proposed investments. Calculate the most popular capital budgeting alternative to the NPV, the internal rate of return (IRR). Understand the profitability index (PI) as a modification of the NPV model. Compare and contrast the strengths and weaknesses of each decision model in a holistic way. Chapter 10 Understand the importance of cash flow and the distinction between cash flow and profits. Identify incremental cash flow. Calculate depreciation and cost recovery. Understand the cash flow associated with the disposal of depreciable assets. Estimate incremental cash flow for capital budgeting decisions. Chapter 11 Understand the different kinds of financing available to a company: debt financing, equity financing, and hybrid equity financing. Understand the debt and equity components of the weighted average cost of capital (WACC) and explain the tax implications on debt financing and the adjustment to the WACC. Calculate the weights of the components using book values or market values. Explain how the WACC is used in capital budgeting models and determine the beta of a project and its implications in capital budgeting problems. Select optimal project combinations for a company s portfolio of acceptable potential projects. Chapter 12 Understand the sources and uses of cash that are used in building a cash budget. Explain how sales forecasts are used to predict cash inflow. Understand how production costs vary in terms of cash flow timing. Explain possible ways to cover cash deficits and invest cash surplus. Prepare a pro forma income statement and a pro forma balance sheet. MGT 203 Finance SP14 Page 5 of 6

6 ACCOUNTING FOR CREDIT HOUR REQUIREMENT: Assignment/Assessment Clock Hours Explanation In-class instruction 37.5 Time spent in class Assigned readings 34 Reading, note-taking, etc. Homework 17 Study time plus time to complete homework Quizzes 25 Study time plus time to complete quizzes Exams 9 Study time plus time to complete exams Case assignments 12 Research, writing, creating spreadsheets, etc. Total hours MGT 203 Finance SP14 Page 6 of 6