Finance 3504 Syllabus Fall 2014

Topics: Capital structure, Corporate finance, Discounted cash flow Pages: 7 (1772 words) Published: November 18, 2014


Course: Finance 3504 - Intermediate Corporate Finance

Instructor: Steven Casper (
Office Hours:TTh11:00 – 12:15; T 2:00 – 4:00
Office and Phone: A435; 609-273-3347 (cell)

Teaching Assistant: Jacky Akpan (
Office: 434
Office Hours:MW 2:00 - 4:00

Course Description: This course has three objectives:
Teach critical thinking and problem analysis skills
Ensure understanding of the course material
Provide hands-on experience with Excel

It will cover three broad areas of study:
Financial statements analysis and forecasting, and free cash flow valuation of the firm Capital budgeting
Cost of capital, leverage and capital structure policy

You will demonstrate your proficiency in each area via three exams and three case analyses (using Excel). This course provides an intensive introduction to corporate financial decision-making and will prepare you for subsequent courses in the finance major. By the end of the course you should be able to: 1. Understand the information provided by financial statements and know how to compute and interpret important financial ratios 2. Forecast financial statements, estimate free cash flows, determine enterprise value and the value of stocks based on free cash flow 3. Compute net present value and understand why it is the best decision criterion 4. Understand how to determine the relevant cash flows for various types of capital investments 5. Understand how to determine the firm’s overall cost of capital 6. Understand capital structure theories as well as real world factors that affect capital structure decisions 7. Compute the value of the unlevered and levered firm, and understand the effects of leverage on the value created by a project Textbook: Fundamentals of Corporate Finance 10th edition, Ross, Westerfield and Jordan; McGraw-Hill Irwin.

Connect: The 9 homework assignments will be completed using the online tool, Connect. Register via the url: More detailed instructions are under the Connect tab in Blackboard

Prerequisites:The prerequisites for this course are Finance 3101, 3502 or 3901. It is assumed that you have a basic understanding of the following: The structure and interpretation of income statements, balance sheets, and statements of cash flow Time value of money

Valuation of stocks and bonds
The capital asset pricing model - CAPM
Net present value and internal rate of return
Weighted average cost of capital

Course Grade: Your performance in the course is based on the following: 1. Case Studies - 20%. There will be three Excel based case studies, with each covering a broad area of the course. You must work in teams of three students. The Alliance Concrete and Target Corporation cases are each 5% of your grade. Pacific Grove Spice is 10% of your grade. 2. Homework Assignments– 15%. 9 homework assignments are posted on Connect. Each set of assignments will be due before the corresponding exam and the due dates are posted on your Connect homepage. You will have unlimited attempts on each problem, prior to the assignment due date. The Connect portion of your homework grade will be based on an average of the 9 Connect assignments. Mini-cases/written assignments All mini-case assignments are to be completed using Excel and are to be handed in at the beginning of class. Late submissions will not be accepted since we will be discussing the mini-cases/solutions during class. Each student works individually on the mini-cases. 3. Midterm Exams – 35% (Exam #1 = 15%; Exam #2 = 20%) The two midterm exams will be closed book, closed notes. You will only be permitted a calculator and a one page, handwritten, formula sheet. Each exam will consist of multiple choice questions, problems, and critical thinking questions. Make-up exams...
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