BGMT 340 - Weebly



BGMT 340

Business Finance

Spring 2013

Dr. Karen Hallows

Class time: TTh 11:00 – 12:15 (0301), 12:30 p.m. – 1:45 p.m. (0501), 3:30 – 4:45 (0701), and 5:00 – 6:15 (0601), all in VMH 1333

Office: VMH 4464

Office Hours: M. 12:00 noon – 3:00 pm, TTh.2:15 – 3:15 p.m. and by appointment

Telephone: 301 405-1058

E-mail: khallows@rhsmith.umd.edu

Mr. Benjamin Munyan

Class time: MW 5:00 - 6:15 (0401) (VMH 1412)

Office: VMH 3330M

Office Hours: MW 9 – 11 a.m., 3:30 – 4:45 p.m., Tuesday: 2 p.m. – 5 p.m. and by appointment

Telephone: 301 661-1682

E-mail: bmunyan@rhsmith.umd.edu

Dr. Susan White

Class times: MW 2-3:15 p.m. (BL1) VMH 1212 and MW 3:30-4:45 p.m. (BL2) VMH 1212

Office: VMH 4455

Office hours: MW 11 a.m. - noon, Tuesday: 10 a.m.-12, 2-4 p.m. and by appointment

Telephone: 301 405-8700

E-mail: suwhite@rhsmith.umd.edu

Course website: ng.elms.umd.edu

Textbook on-line study centre:

Textbook and Course Materials

• Textbook: McGraw-Hill/Irwin publishes 2 versions of Ross, Westerfield, and Jordan: Fundamentals of Corporate Finance, 9e: The Standard Edition and The Alternate Edition. For more specifics, see appendix at the end of this syllabus

Other Required Course Materials:

• Financial Calculator: You may use any calculator that will calculate net present value and internal rate of return. Go to the Financial Calculator link on elms for more details about financial calculator models.

• Recommended: It is recommended that you read business press like the Wall Street Journal, Business Week, Fortune, etc. regularly. As a business major, you’ll need to be fluent in the language of business. These publications are great ways to practice that fluency.

Course Objectives

The purpose of this course is to provide you with a basic foundation in corporate finance. You'll build on this foundation if you continue to take finance courses and courses in other business disciplines and as you work with finance concepts in your life after graduation. You'll also use these concepts if you choose to develop your own personal investment portfolio. The course includes a review of accounting principles as they apply to corporate finance, the financial environment of business, valuation of projects, companies, and investment securities, and how a business allocates financial resources in an uncertain environment to maximize shareholder wealth. After completing the course, you should have gained an intuitive comprehension of financial concepts and analysis, an understanding of current issues in financial management, and the knowledge that all areas of finance are firmly rooted in valuation.

Course Prerequisites

You should have basic accounting, including an understanding of accounting terms and financial statements from BMGT 220 and 221, statistics, including probability, regression analysis, calculating mean and standard deviation from BMGT 230 or 231, and algebra (high school algebra I provides the math basics you will use most in this class).

Grading and Exams

75% (25% each) Three exams, held in the evening for all sections

25% (Optional) Final exam

25% Project/Homework/Video quizzes, in class assignments, due

throughout the semester

Extra Credit Two homework assignments may be completed for extra

credit

The final exam is optional. If you have taken all three exams and are satisfied with your grades prior to the final, you may choose not to take the final. If you choose to take the final, then it will replace your mid-semester exam with the lowest grade. If you score lower on the final exam than on any of the three mid-semester exams, then the final exam will not count.

If you are absent from one of the three in-class exams, you must take the final exam, and the final will count for the missing exam. If you have missed one mid-semester exam, then the final will count 25%. If you've missed two mid-semester exams, the final will count 50%. If you've missed all three mid-semester exams, the final will count 75%. Note that if you take all three exams, the final exam will only replace one grade, your lowest grade – it will not replace more than one exam grade. Because all of the sections are taking the same exam on the same evening, there will be a make up exam day scheduled for each mid-semester exam date.

Exam grades will be curved, if needed. Exams with answers and grades with the curve included will also be posted on the web site.

You can bring one 8 1/2 x 11 sheet of paper to each exam, one side only, with anything written on it that you like. The sheet can be handwritten or typed. You must turn this in with your exam. It will be returned to you after the exam is graded. You can bring all three sheets with you to the final exam.

You may review your exam for two weeks after taking the exam. Please email your assigned TA to set up an appointment to review your exam. After two weeks, exams/projects/assignments will not be reviewed. Exams will be returned on request.

If the University is officially closed on the date an examination is scheduled, the exam will be held on the next class meeting date.

Time period allowed to complete Exams 1, 2 and 3 = 1 hour and 15 minutes

Time period allowed to complete Final Exam = 2 hours

All students’ exams will be picked up by the professors and TAs when the exam time has expired. If you do not turn in your exam when this last call is made, you will receive a zero on the exam.

Grades will be posted throughout the semester. Please note that there are 500 students in this course, and unfortunately mistakes can happen when grades are entered. Email your professor immediately if there is a problem with your posted grade, but no later than 2 weeks after a grade due date. Note also that if there is a curve on an exam, the curved grade (raw score with points added) is the grade that is posted.

The Smith School of Business offers rigorous, academically-challenging courses and provides meaningful feedback on student performance to facilitate learning. Transparency and consistency in grading are important elements that ensure the integrity of the curriculum.

The Smith School expects a grade point average of approximately 3.10 for 300-level BMGT core courses.

Your final grade will be an average based on 100%, with 89.5 as the cutoff for an A-, 79.5 for a B-, 69.5 for a C-, 59.5 for a D. Grades will include pluses and minuses as per the official university grading policy. Please see the plus/minus grading policy on testudo.

Project/Homework Assignments/Extra Credit

• Project Assignments: You will be working on short finance project assignments throughout the semester. You are responsible for keeping up with due dates. Details are posted on elms and detailed guidelines are at the end of this syllabus. All projects must be submitted through elms, showing all work including formulas. A hard-coded answer will NOT be counted as correct. Using excel is the best way to create your assignments.

• Homework Assignments: There will be regular homework assignments for each chapter covered in the course. Homework assignments are due as indicated in the assignment schedule posted on elms under the Homework/Practice Problem Tab Folder. Your homework and practice problems are taken online through an online program called CONNECT. The list of the homework and the practice problems for this course are located in the Homework/Practice Problem tab on elms. You will need to register with Connect and take the Homework/Practice Problems directly at the CONNECT website.

online registration instructions for CONNECT

Go to the following Web address

and click the "register now" button:



This is a unique address for BMGT340

Please see the information in that Homework/Practice Problem tab to learn about how to complete the homework assignments in this course. For each textbook chapter, on CONNECT you will be provided with practice problems and homework assignments from the end of each chapter. The homework assignments will have different numbers than the end-of-chapter problems but they are essentially the same problems. You will submit only the homework assignments for a grade. The practice problems are ungraded and you can work these as many times as you wish and receive immediate feedback so you can learn how to do the problems. You will have three chances to compute the correct answer for each homework assignment and there are 6 problems per assignment. There will be twelve total homework assignments throughout the semester. We will keep your best 10 homework assignments for grading purposes for a total of 120 maximum points, or 12% of your grade. The final two homework assignments are for extra credit for a maximum total extra credit from homework assignments of 24 points or 2.4% of your total grade.

Helpful Tips:

• Work the practice problems before attempting the homework – your chances of success are much higher. These practice problems give you the correct answer and an explanation of how to work the problem as soon as you submit your practice problem set.

• If you work the book problem for homework prior to completing the homework online, you will reduce the number of times you have to complete homework and obtain the highest possible score.

Please don’t wait until the last minute to complete your homework or study for an exam. The professors or your TAs may not be available to respond to homework questions or exam questions at the last minute.

• Extra Credit: You can complete the two additional homework assignments, as posted on elms, for a total of 24 points (2.4%) of extra credit. You can also receive an additional 0.6% (6 points) added to your grade in extra credit by completing BOTH a pre and post-assessment for the course. This is to assess how much you have learned throughout the course. The pre and post-assessments are on Connect and more will be discussed about this in class. Total maximum possible extra credit points: 30 points or 3% of the grade.

Course Materials and TAs

Course materials including power point lecture notes, helpful web sites, and other course information are posted on elms. Please check this web site regularly for updates. To get the most out of class, you must come to class having read the chapter. You will be even more prepared for class if you work some of the suggested end of chapter problems. The TAs are valuable resources for the course. They will hold regular office hours and will be available to review exams, help with project and homework assignments and answer questions about the course material. While you will be assigned a TA based on your last name, feel free to go to any TA’s office hours, even if the TA is not your assigned TA, and email for help. The TA assignments are primarily for grading purposes.

Course Policies

Honor Code and Academic Integrity

The University’s Code of Academic Integrity is designed to ensure that the principles of academic honesty and integrity are upheld. All students are expected to adhere to this code. The Smith School does not tolerate academic dishonesty. All acts of academic dishonesty will be dealt with in accordance with the provisions of this code. Please visit the following web site for more information on the University’s Code of Academic Integrity: . On each assignment you will be asked to write out and sign the following pledge: “I pledge on my honor that I have not given or received any authorized assistance on this exam/assignment.”

Classroom Policies

Please be considerate of the other students in the room. This means not talking, rustling papers, etc. during class. I understand emergency needs, but please refrain from leaving early and arriving late if possible. The slamming door is very distracting. However, the professors prefer that you arrive late or leave early rather than not attend.

Special Needs

Any student with special needs or special accommodations needs because of disabilities should bring this to your professor’s attention as soon as possible, but no later than the second week of class. You should also inform your professor in advance of any intended absences for religious observances or absences due to athletics or university activities.

Inclement Weather Policy

In case of inclement weather, check the University of Maryland homepage or call 301 405-SNOW to check on cancellation status. If classes are cancelled, schedules will be adjusted accordingly. It is very unlikely that exam dates will be changed from the dates stated in the syllabus. It is possible that the material covered on the exam might be adjusted. Missed classes will most likely be made up through recorded lectures.

Absence Policies

The university has a new policy for absences, approved in May 2011. The complete policy can be found at: . For a single absence, The University will accept as an excused absence a self-signed note from a student who has missed a single lecture, recitation, or laboratory, attesting to the date of the illness. The note must also contain an acknowledgement by the student that the information is true and correct and that providing false information is prohibited under Code of Student Conduct. The student is also obligated to make a reasonable attempt to inform the instructor of his/her illness in advance. Students who miss more than a single class, whether consecutive or non-consecutive misses or experience an illness during a Major Scheduled Grading Event, shall be required to provide written documentation of the illness from the Health Center or from an outside health care provider. Major grading events are the three mid semester exams, the final exam and the four project parts. In cases where written verification is provided, the Health Center or outside health care provider shall verify dates of treatment and indicate the time frame that the student was unable to meet academic responsibilities. The student is also obligated to make a reasonable attempt to inform the instructor of his/her illness in advance.

Course Challenges

What is “rigor”? Sometimes individuals define it as the amount of homework associated with a course; other times it might be construed as the level of difficulty or complexity of a particular assignment. While both of these statements are correct, I define this as the process of developing students’ critical thinking skills. This class will challenge you to think about the data, synthesize it, blend it with your past and make new connections concerning the material.

In the 21st Century, the ability to engage in careful, reflective thought has been viewed in various ways—as a fundamental characteristic of an educated person, as a requirement for responsible citizenship, and more recently as an employability skill for an increasingly wide range of jobs. Thinking skills are necessary tools in a society characterized by rapid change, ambiguous work environments, alternative courses of action, and numerous individual or collective choices and decisions.  You will be measured (graded) to a large degree, upon your demonstrated ability to apply, analyze, synthesize and evaluate key concepts presented as part of the curriculum. I would like you to equate the term “rigor” with the process of thinking more critically.

It is important to realize at the outset that BMGT 340 is not a typical introductory course. It requires a commitment to:

□ attend classes;

□ take responsibility for your own learning by reading the text and contributing actively in class;

□ learn course material well enough that you can apply it (not merely reproduce it for examination purposes); and,

□ be willing to learn through trial and error.

Participation in the course: Students who participate positively learn more and do better in the course. Class participation is still part of the learning process and includes the following:

1. Preparation – reading and preparing before class.

2. Relevant participation – including creativity, insights, an understanding of material, and linkages to theory discussed.

3. Verbal and non-verbal support – including respect and courtesy, attentiveness, and on-time arrival.

4. Use of your computer at inappropriate times is unacceptable.

5. Please do not use the class listserv for personal messages at all.

Class Schedule

Please note that this class schedule is tentative. The most up to date calendar will be kept on the web site. Consult this calendar frequently!! It will tell you what we're doing in class that day, what assignments are due, etc. The exam dates will stay as scheduled here, but the material on each exam may be different from what is listed in the syllabus, depending on what we have covered by each exam date.

|M/W classes |T/Th classes |Chapter/Assignment |Subject |

| | | | |

|Wed., 1/23 |Thurs., 1/24 |Introduction | |

|Mon., 1/28 |Tues., 1/29 |Ch. 1 |Introduction to Corporate Finance |

|Wed., 1/30 |Thurs., 1/31 |Ch. 2 |Financial Statements, Taxes and Cash Flow |

|Mon., 2/4 |Tues. 2/5 |Ch. 2 |Financial Statements, Taxes and Cash Flow |

|Wed., 2/6 |Thurs., 2/7 |Ch. 3 |Working with Financial Statements |

|Mon., 2/11 |Tues., 2/12 |Ch. 3 |Working with Financial Statements |

|Wed., 2/13 |Thurs., 2/14 |Ch. 5 |Introduction to Valuation: The Time Value of |

| | | |Money |

|Mon., 2/18 |Tues., 2/19 |Ch. 5/6 |Discounted Cash Flow Valuation |

|Wed., 2/20 |Thurs., 2/21 |Ch. 6 |Discounted Cash Flow Valuation |

|Mon., 2/25 |Tues., 2/26 |Ch. 6 |Discounted Cash Flow Valuation |

|Wed., 2/27 | |Exam 1, Ch. 1,2,3,5,6 |No class for M/W classes; Evening exam |

|Thurs., 2/28 | |Make up exam 1 |No class for T/TH classes, Evening exam |

|Mon., 3/4 |Tues., 3/5 |Ch. 7 |Interest Rates and Bond Valuation |

|Wed., 3/6 |Thurs., 3/7 |Ch. 7 |Interest Rates and Bond Valuation |

|Mon., 3/11 |Tues., 3/12 |Ch. 8 |Stock Valuation |

|Wed., 3/13 |Thurs., 3/14 |Ch. 8/12 |Stock Valuation/Some Lessons from Capital Market|

| | | |Efficiency |

|3/17-3/24 | |Happy Spring Break! | |

|Mon., 3/25 |Tues., 3/26 |Ch. 12 |Some Lessons from Capital Market Efficiency |

|Wed., 3/27 |Thurs., 3/28 |Ch. 13 |Return, Risk and the Security Market Line |

|Mon., 4/1 |Tues., 4/2 |Ch. 13 |Return, Risk and the Security Market Line |

|Wed., 4/3 |Thurs., 4/4 |Ch. 13 |Return, Risk and the Security Market Line |

|Mon., 4/8 | |Exam 2, Ch. 7.8.12.13 |Evening exam. No class for M/W students |

|Tues., 4/9 | |Make up exam 2 |Evening exam. No class for T/TH students |

|Wed., 4/10 |Thurs., 4/11 |Ch. 9 |Net Present Value and other Investment Criteria |

|Mon., 4/15 |Tues., 4/16 |Ch. 9/10 |Net Present Value and other Investment Criteria |

|Wed., 4/17 |Thurs., 4/18 |Ch. 10 |Making Capital Investment Decisions |

|Mon., 4/22 |Tues., 4/23 |Ch. 10 |Making Capital Investment Decisions |

|Wed., 4/24 |Thurs., 4/25 |Ch. 10/14 |Making Capital Investment Decisions/Cost of |

| | | |Capital |

|Mon., 4/29 |Tues., 4/30 |Ch. 14 |Cost of Capital |

|Wed., 5/1 |Thurs., 5/2 |Ch. 16 |Financial Leverage and Capital Structure |

|Mon., 5/6 |Tues., 5/7 |Ch. 16 |Financial Leverage and Capital Structure |

|Wed., 5/8 | |Exam 3, Ch. 9.10.14.16 |Evening exam, No class for MW students |

|Thurs., 5/9 | |Make up exam 3 |Evening exam, No class for T/TH students |

Final Exam Schedule

|Class Time |Section |Final Exam time |

|T TH 11-12:15 pm Hallows |0301 |Sat., May 11, 8-10 am |

|M W 5-6:15 pm Munyan |0401 |Wed., May 15, 4-6 pm |

|T TH 12:30-1:45 pm Hallows |0501 |Thurs., May 16, 1:30-3:30 pm |

|T TH 5-6:15 pm Hallows |0601 |Thurs., May 16, 4-6 pm |

|T TH 3:30-4:45 pm Hallows |0701 |Fri., May 17, 10:30-12:30 pm |

|MW 2-3:15 pm White |BL1 |Wed., May 15, 1:30-3:30 |

|MW 3:30-4:45 pm White |BL2 |Tues., May 14, 1:30-3:30 |

General Rules for Project and Extra Credit Assignment Submissions

Submitting Homework Assignments

• Always check to see that an assignment was submitted properly. Your homework grades will show up in CONNECT. They will be manually posted to ELMS from CONNECT periodically. Homework assignments are due according to the schedule on ELMS and CONNECT. There are no extensions given for homework assignments.

Submitting Project Assignments

• Your project assignments will be posted directly on ELMS. More on this will be provided later.

• A project assignment may be submitted up to 48 hours late for a maximum of 50% of the points of the assignment. Note that if you do not submit properly, and discover this after the deadline but before 48 hours after the deadline, you may email your TA the assignment for up to a maximum of half credit. If you discover this after the 48 hours, you will not receive credit. IT IS UP TO YOU TO VERIFY THAT ASSIGNMENTS ARE SUBMITTED CORRECTLY BEFORE THE DEADLINE.

• If you have a documented, university-excused reason for not submitting on time, you can email your professor before the assignment deadline, and depending on the circumstances your assignment may be accepted for full or for partial credit. You must, however, email your professor about your excuse before the assignment deadline (only extraordinary exceptions to this rule, for example, you are (God forbid) in an automobile accident and in a coma for 48 hours and cannot use a cell phone.) Note that job interviews, work hours, oversleeping are not acceptable excuses.

Grading Your Assignment

• For any excel assignments, the cells in which there are calculations must include formulas, not hard-coded numbers. In other words, don’t calculate numbers with your calculator and then enter the numbers into the excel sheet – you must do the calculations in excel. Note that if you copy and paste, often you will lose the formatting and will have to re-do the cell calculations. If your numbers cannot be checked you will receive only partial credit, depending on the assignment. It is possible that with hard-coded numbers you could receive a zero on the assignment. ALWAYS CHECK YOUR ASSIGNMENT BEFORE SUBMITTING – CLICK ON A COUPLE OF CELLS AND MAKE SURE THE CELLS WITH CALCULATIONS CONTAIN FORMULAS AND NOT NUMBERS!

Grade Concerns

• If you question a grade, you must do so, in writing, within 3 weeks of the assignment deadline. This includes: disagree with the grade given, no grade given. Your request for a review should include why you believe points were incorrectly taken off and why they should be restored. Grades for project or extra credit assignments will NOT BE REVIEWED under any circumstances past the three-week deadline. .IT IS YOUR RESPONSIBILITY TO MAKE SURE THAT YOUR SCORES ARE CORRECTLY POSTED TO ELMS.

Textbook Options

• Textbook: McGraw-Hill/Irwin publishes 2 versions of Ross, Westerfield, and Jordan: Fundamentals of Corporate Finance, 9e: The Standard Edition and The Alternate Edition. Note that these two versions are the same except that the Alternate Edition includes 7 additional chapters (covering more advanced topics).Either version of the book includes the content needed for BMGT 340. If you plan to also take BMGT 440, the Alternate Edition may be a better reference tool.

• CONNECT Access is also required for this course and it is a one-time use code bundled with your textbook. DO NOT BUY a USED Access Card as it will not work. McGraw-Hill’s Connect is a web-based assignment and assessment solution required for this course. Connect is designed to assist you with your coursework based on your needs.

• CONNECT REGISTRATION: Go directly to Connect to register:

Access codes are packaged with a new textbook in the bookstore. You can also purchase Connect access online at the BMGT 340 Connect web address. We will go over this process on the first day of class.

If you purchase Connect online, you will have the option of purchasing Connect or ConnectPlus, which includes an interactive eBook to supplement the required textbook for this course. NOTE: You can register in Connect and have access without a code for a limited time period (typically three weeks). More information is provided below under “Textbook and Connect Options”.

Support & Tips: If you have any issues while registering or using Connect, please contact McGraw-Hill’s CARE team at 1-800-331-5094 (Mon to Thursday – 9AM to 11:30PM / Friday -9AM to 6PM / Sunday- 6PM to 11:30PM) or through

To avoid problems related to unexpected technical issues, you are advised not to wait until the last moment to complete assignments.

Textbook and Connect Options

If you choose to buy an unbundled textbook, the access code can be purchased separately in two ways & in two forms:

CONNECT PLUS (assignment & study tools with complete ebook).

CONNECT (assignment & study tools (without the ebook))

CONNECT and CONNECT PLUS can be purchased through e-commerce directly from your instructor’s course web site, closer to the class start date.

The e-commerce costs:

Connect - $49.99

Connect Plus – with ebook $95.75

Connect Code Card ISBNS as separate (unbundled) items are:

0077326865 CONNECT CARD FUND CORP FIN

0077326881 CONNECT PLUS CARD FUND CORP FIN

UMD Bundle ISBN: 0077579755 or 9780077579753

Title: BMGT340: Fundamentals of Corporate Finance Alternate Edition, 9e with ConnectPlus (University of Maryland College Park) © 2011

This is a discounted custom version of the Ross, Westerfield, and Jordan: Fundamentals of Corporate Finance, Alternate 9e textbook, in binder-ready loose-leaf format with a Connect Plus access code. It will be available in early August, only through the UMD -CP bookstores ($114.00 NEW - Retail cost at UBC store) and shop.mcgraw-.

Traditional Hardbound Textbook ISBNs:

1. Fundamentals of Corporate Finance Standard Edition [Hardcover] Stephen Ross, Randolph Westerfield, Bradford Jordan

∙ ISBN-10: 0073382396 or ∙ ISBN-13: 978-0073382395

This ISBN includes the Standard edition textbook - You will need an access code in addition to this ISBN.

2. Fundamentals of Corporate Finance with Connect Plus Access Card [Hardcover] Stephen Ross, Randolph Westerfield, Bradford Jordan

∙ ISBN-10: 0077388186 or ∙ ISBN-13: 978-0077388188

This ISBN is OK, it includes the Standard Edition textbook & the Access Code you will need for assignments.

3. Fundamentals of Corporate Finance Alternate Edition [Hardcover] Stephen Ross, Randolph Westerfield, Bradford Jordan

∙ ISBN-10: 0077246128 or ∙ ISBN-13: 978-0077246129

This ISBN is the textbook only. You will need an access code in addition to this ISBN.

4. Fundamentals of Corporate Finance Alternate Edition with Connect Plus Access Card [Hardcover] Stephen Ross, Randolph Westerfield, Bradford Jordan

∙ ISBN-10: 9780077388195 or ∙ ISBN-13: 978-0077388195

This ISBN is OK – it includes the textbook & access code you will need for assignments.

Here is the direct to student ecommerce web link for purchase of the

printed Loose-Leaf textbook with Connect Plus:

BMGT340: Fundamentals of Corporate Finance, Alternate Edition

w/ConnectPlus PPK (Univ of Maryland College Park - COLH) 0077579755

$90.00

Go to: shop.mcgraw- and search with ISBN: 0077579755 or go directly to the purchase page at:



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