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Corporate Finance |
| FIN 254 Corporate Finance Summer I 2001 9-12 MTuWTh 24 Wohlers Hall |
Professor James A. Gentry Office: 419 Wohlers Hall Phone: 333-7995 Office Hours: 1-2 MTuW Or By Appointment email: j-gentry@uiuc.edu |
Finance 254 provides an introduction to corporate financial management. Financial management along with marketing and production are the three major decision making functions within a firm. Although financial decision making may be centered in a separate area, financial decisions are closely related to decisions made throughout the firm. In its simplest form, financial decisions are involved in managing the cash inflows and outflows of a firm. Because the objective of financial management is to maximize the long-run value of a firm's common stock, the primary decision areas are focused on operations, working capital, investment, and financing.
To make the study of corporate financial management an exciting and stimulating learning experience.
To develop an appreciation of the financial management decision making process within the total firm.
To introduce the basic theories and concepts in financial management.
To involve you in measuring and analyzing the financial performance of a firm's management.
To show you how financial management is practiced in formulating strategic and operating plans for the firm.
To illustrate the scientific framework underlying financial decision making and how it is coupled with sound judgment by management.
This course presumes some background on your part in the areas of accounting, statistics, and knowledge of computer electronic spreadsheet software. The material in this section describes the knowledge and skill background you should have at the beginning of the course and the requirements that will need to be completed during the semester.
It is assumed that all students taking this course will already have completed at least the following courses or their equivalents:
Accountancy 201
Accountancy 202 (or concurrent registration)
Economics 172 (or concurrent registration)
Computer Science 105
Brigham, Eugene F. and Houston, Joel F., Fundamentals of Financial Management: The Concise Second Edition, The Dryden Press, 1998.
Brigham, Eugene F., Houston, Joel F., and Aberwald Clark, Dana, Study Guide to Fundamentals of Financial Management: The Concise Second Edition, The Dryden Press, 1998.
A financial calculator: Texas Instruments BAII Plus. This calculator will do everything necessary for this course or any other finance course you may take (about $30, cheapest off-campus).
SG = Study Guide OV = Study Guide Overview OUT = Study Guide Outline
T = Textbook DQ = Study Guide Definition Questions
CQ = Study Guide Conceptual Questions PROB = Textbook Problems
May 14 Chapter 1 - An Overview of Financial Management
SG: Preface; Ch. 1 OV and OUT; T: Ch. 1; SG: DQ and CQ
Chapter 4 - Financial Markets, Institutions, and Interest Rates (LN)
SG: Ch. 4 OV and OUT; T: Ch. 4; SG: DQ and CQ;
Integrated Case PROB: 4-15; PROB: 4-1, 4-2, 4-4, 4-10,
PROB: 4-12, 4-13
May 15 Chapter 6 - Time Value of Money (Bring Financial Calculator to class)
SG: Ch. 6 OV and OUT ; T: Ch. 6; SG: DQ and CQ;
PROB: 6-1 through 6-7, 6-32 through 6-36, 6-31
PROB: 6-8
through 6-30, 6-37 through 6-42, 6-44, 6-45
May 16 Chapter 5 - Risk and Rates of Return
SG: Ch. 5 OV and OUT; T: Ch. 5
SG: DQ and CQ;
PROB: 5-1 through 5-12, 5-14
May 17
10:30-12:00
Exam 1 over Chapters 1, 4, 5,
& 6
May 21 Chapter 2 - Financial Statements, Cash Flow, and Taxes
SG: Ch. 2 OV and OUT; T: Ch. 2; SG: DQ and CQ;
PROB: 2-1 through 2-11, 2-13, 2-18; WEB: Cash Flow Story,
Cash Flow Problem, WEB Exhibit 4 and WEB Exhibit
1 Cash Flow Statement.
May 22 Chapter 3 - Analysis of Financial Statements
SG: Ch. 3 OV and OUT; T: Ch. 3; SG: DQ and CQ;
PROB: 3-1 through 3-13,
3-15, 3-17
May 23 Appendix 15A – Cash Conversion Cycle
PROB: 15A-1-15A-3
Chapter 14 - Financial Forecasting (LN)
SG: Ch. 14 OV and OUT; T: Ch. 14; SG: DQ and CQ;
PROB 14-1, through 14-9; WEB Exhibit 2.
May 24 Chapter 7 - Bonds and Their Valuation
Bring to class a Wall Street Journal or a financial page with bond quotes.
SG: Ch. 7 OV and OUT; T: Ch. 7; SG: DQ and CQ;
PROB: 7-1 through 7-13, 7-16 through 7-18
10:30-12:00
Exam 2 over Chapters 2, 3, 14, & Appendix 15A
May 29 Chapter 8 - Stocks and Their Valuation
SG: Ch. 8 OV and OUT; T: Ch. 8; SG: DQ and CQ;
PROB: 8-1 through 8-14, 8-18 through 8-21
May 30 Chapter 9 - The Cost of Capital (Part I of Anheuser-Busch or GM case)
SG: Ch. 9 OV and OUT; T: Ch. 9; SG: DQ and CQ;
PROB: 9-1 through 9-19
May 31
10:30-12:00
Exam 3 over Chapters 7, 8
and 9
June 4 Chapter 10 - The Basics of Capital Budgeting (LN)
SG: Ch. 10 OV and OUT; T: Ch. 10; SG: DQ and CQ;
Integrated Case PROB: 10-23; PROB: 10-1, through 10-22;
WEB: Exhibit 3—Inspector Finance
June 5 Chapter 11 - Risk and Other Topics in Capital Budgeting (LN)
SG: Ch. 11 OV and OUT; T: Ch. 11; SG: DQ and CQ;
PROB: 11-1 through 11-8, 11-10 through 11-13
June 6 Chapter 13 - Dividend Policy
SG: Ch. 13 OV and OUT; T: Ch. 13; SG: DQ and CQ;
PROB: 13-1 through 13-3, 13-9
June 7
10:00-12:00 Exam 4 over Chapters 9, 10, 11, and 13
75% of your grade is
based on examination performance, as follows:
Best 2 out of the first 3 exams: 200 points (100 pts. each)
Exam 4
100 points
Total Exam Points
300 points
25% of your grade is
based on participation in class disussion:
Discussion Performance 100 points
Total Points 400 points
The quality of your participation will be graded each day on a scale of 0 to 3.