SCHOOL OF BUSINESS ADMINISTRATION AND ECONOMICS



California State University, Northridge

College of Business and Economics

Department of Finance, Real Estate and Insurance

SYLLABUS

Finance 635 – Financial Theory and Policy

Summer 2012

Professor: John Zhou Day: T & R 6:45 PM - 9:55 PM

Office: JH 4113 (818) 677-4543 Time: July 12 - August 21, 2012

E-mail: zhong-guo.zhou@csun.edu Room: JH 1206

Office Hours: TR 5:30 - 6:30 PM or by appointment Website: csun.edu/~zz1802

COURSE DESCRPITION

This course focuses on financial policy and its application to financial management of business enterprise. The primary objective is to provide students with a good understanding of the principles in corporate finance. Students will learn the topics that are important to a firm, including cash flow and financial statement analysis, time value of money, valuation models, long-term financing and investment decisions, dividend policy, and capital structure. Students will also have the opportunity to apply the knowledge and techniques learned in the class by analyzing mini cases.

TEXT

Required: Financial Management, Theory and Practice by Brigham and Ehrhardt, 13th edition, 2011 South-Western Publisher (ISBN-13: 978-1-4390-7809-9, Textbook only).

In conjunction with the CSU’s Affordable Learning Solutions initiative, the Matador Bookstore now has an extensive offering of both Rental and Digital textbooks. These options can save students up to 60% off the new book price.

Required: A financial calculator (Taxes Instrument BAII plus/professional is recommended)

Lecture Notes: posted on my website at: csun.edu/~zz1802

PREREQUISITES

GBUS 502

ASSIGNMENTS

Problem sets and cases will be assigned throughout the session. Those assignments are designed to provide students with problem-solving experience. Some of the problems will be reviewed in class.

EXAMS

There will be two exams, a midterm and a final. The exams are closed book and in class. Students who are absent from any exam without prior permission will receive a score of zero for that exam. No exceptions.

GRADING

Midterm examination 40%

Final examination 40%

Group mini cases (2 cases and 10% each) 20%

The final grade will be based on the overall score a student earns in the class:

90 or above (A); 87-89 (A-); 84-86 (B+); 80-83 (B); 77-79 (B-); 74-76 (C+); 70-73 (C); 67-69 (C-); 64-66 (D+); 60-63 (D); Below 60 (F)

TENTATIVE SCHEDULE

DATE TOPICS TO COVER READINGS

7/12 Overview of Financial Management Chapter 1

Financial Statements, Taxes, and Cash Flow Chapter 2

7/17 Financial Statement Analysis Chapter 3

Mini Case #1 from Chapter 3

7/19 Time Value of Money Chapter 4

7/24 Fixed Income Securities and Interest Rates Chapter 5

Mini Case #1 from Chapter 3 due

7/26 Risk, Return, and the CAPM Chapter 6

Review for Midterm

7/31 Midterm (It covers Chapters 1-6.)

8/2 Stock Valuation Chapter 7

8/7 Cost of Capital Chapter 9

8/9 Capital Budgeting I Chapter 10

Capital Budgeting II Chapter 11

Mini Case #2 from Chapter 11

8/14 Dividend Policy Chapter 14

8/16 Capital Structure Chapter 15

Mini Case #2 from Chapter 11 due

Review for Final

8/21 Final Exam (It covers Chapters 7, 9-11, and 14-15.)

WITHDRAWAL AND ACADEMIC DISHONESTY POLICIES

I will follow the withdrawal policy and academic dishonesty policy set by the California State University at Northridge.

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