Finance 221
Course Syllabus
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If you engage in an act of academic dishonesty, you become liable to severe disciplinary action. Such acts include cheating; falsification or invention of information or citation in an academic endeavor; helping or attempting to help others commit academic infractions; plagiarism; offering bribes, favors, or threats; academic interference; computer related infractions; and failure to comply with research regulations.
Rule 33 of the Code of Policies and Regulations Applying to all Students gives complete details of the rules governing academic integrity for all students. You are responsible for knowing and abiding by these rules.
Introduction to Finance 221
The course title for Finance 221 is Corporate Finance. While the focus of the course is on the corporation and its financial decision-making, many basic concepts and tools in Finance are introduced. These basic concepts and tools are useful in many areas of business or personal life. They include the notion of present value, the relationship between risk and expected return, a familiarity with financial analysis, the impact of financial leverage, and the characteristics of and determining the value of securities.
My point is that the material covered in this course is useful to all, regardless of major and career choice. Much of what you can learn in this course can make you a more savvy and effective consumer whether it be learning how to calculate loan payments and rates or the fundamentals of security valuation. Therefore, it is my hope that you will view Finance 221 more as an opportunity to learn something useful and exciting, rather than merely a hurdle to be cleared.
The textbook and supporting materials are excellent. I have reviewed about all of the major textbooks on the market, and I feel that the material selected from the Brigham & Houston Fundamentals of Financial Management textbook are outstanding. Also, I strongly recommend that you sign up for the Wall Street Journal. Discounted 15-week subscription to the paper and internet versions of the Wall Street Journal are available, and you will be able to subscribe in class. I encourage you to keep up with financial and business news and try to find stories that relate to the course, and I will point out and integrate relevant Wall Street Journal articles in class as we go through the semester.
The elements of this Syllabus are designed to aid you as you undertake the study of Finance in this course. Use the contents of this syllabus (1) to know precisely what will be asked of you as a student in Finance 221, (2) to know the exact schedule of classes, assignments, and exams, and (3) to supplement and expand on the material presented in the textbook.
I encourage your active participation in both lecture and discussion section. An active approach to learning with your mind engaged will enhance the payoff for you from this course. Be sure to relate the material of this course to the financial activity you see and read about in the world around you. When you raise issues and ask questions, you aid the learning process for all and emphasize the relevance of the material to everyday life.
I wish you both success and
fun in learning!
Michael A. Dyer
Assistant Professor of Finance
Lecture and Discussion Times
Finance 221
Corporate Finance
Spring 2007
Lectures:
Discussion Section: TH/FRI
Course Website: http://www.business.uiuc.edu/~mdyer/fin221.htm
Office Hours and Teaching Assistants
Office:
328J DKH
Office Hours:
Office Phone: 244-7807
E-mail:
dyer1@uiuc.edu
Teaching
Assistants’ Office Hours Office Location 104 Survey
Mail Box: 340 Wohlers Hall, Department of Finance
Course Overview and Objectives
Finance 221 provides an introduction to corporate financial management. Finance is centered on the idea of valuing things. What is the value of a bond, a stock, a firm, or even a college education?
This course is meant to teach you how to compute value. Since this is an introductory course, we will focus on the basics of computing value without focusing too much on the enormous number of complicating factors that exist in the real world when we actually try to calculate value.
Course
Objectives:
To make the study of corporate financial
management an exciting and stimulating learning experience.
To understand the goal of the corporation.
To understand and apply the time value of money
in order to value financial and real asset investments.
To involve you in measuring and analyzing the
financial performance of a firm's management.
To show you how measure cash flow for an
individual asset and firm.
To illustrate the scientific framework
underlying financial decision making and how it is coupled with sound judgment
by management.
Course Prerequisites
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:
1. Accountancy 201
2. Accountancy 202 (or concurrent registration)
3. Economics 202 or 172
4. Computer Science 105
From your Accountancy class(es) you should be familiar with the structure of basic financial statements and the meaning of the items listed in these statements.
From Statistics (Economics 172 or 202) you should be familiar with various measurements of distributions, such as the mean, variance, and standard deviation.
In the Computer Science area you should be
comfortable working on microcomputers and spreadsheet software like Excel or
Lotus
Course Textbook |
|
Custom version of Brigham & Houston, Fundamentals
of Financial Management, Concise 5th ed. Southwest-Thomson with Aplia
A financial calculator: Texas Instruments BAII
Plus (student edition). This calculator
will do everything necessary for this course or any other finance course you
may take (about $30).
I-clicker.
You must register one and bring it to every lecture since they will be
used for your class participation grade.
(Optional) Finance 221 Course Syllabus
Book: which also includes extra class
material, old exams, and solutions to all suggested textbook problems.
Class Procedures
The structure of this class makes your individual study and preparation outside class extremely important. The lectures will focus on the major points introduced in the text. If you read and have at least some familiarity with the assigned chapter before the lecture, this will greatly assist you in understanding the lecture. The lecture will focus on the more difficult aspects of each chapter, and on problems which deal with the material. If you have not read the chapter, and don't understand the definitions of words and simple concepts, you will not be able to understand the more complex topics covered in class, upon which the exams will be based. After the class, you should study your notes, and in the process work relevant problems from the end-of-chapter questions and problems.
Assigned
Problems and Their Answers:
End of chapter textbook questions and problems are assigned
in the Class Schedule along with the reading assignments. To get the most out of the class you should
read the assignments and try to do the problems before coming to class.
Suggested problems will not be collected and graded, unless your Teaching
Assistant announces a different policy.
At times the solution to one or more of the problems will be covered in
lecture or discussion section. Having
already worked the problem will enhance your learning in the class. Also, since the exams will heavily stress
problem solving, it will be extremely important that you keep up to speed on
the assigned problems. In addition to
the assigned problems you should try to answer the self-test problems at the
end of each chapter. Failure to keep up with homework will show up on your
performance on the exams. I STRONGLY RECOMMEND COMPLETING ALL
SUGGESTED END OF CHAPTER PROBLEMS BY THE TIME OF THE DISCUSSION MEETING
COVERING THAT CHAPTER in addition to completing the required (Personal Trainer)
problems by their due date.
Additional review material and problems are available through the textbook website.
The solutions to suggested textbook problems are included at the end of the syllabus booklet and on the Fin 221 UIUC Compass website.
Exams
Finance 221 will have four exams given from
The locations of these exams will be announced in
class. No make-up exams will be given. If
you miss an exam, it can only be made up by taking the optional final exam (see
below). If you know that you will be
unable to take an exam at the times or dates given below, see/contact me at
least a week in advance of the exam and we can make arrangements for you to
take the exam ahead of the regularly scheduled time.
Exam 1: Monday,
Feb. 12
Exam 2: Monday,
Mar. 5
Exam 3: Monday,
Apr. 2
Exam 4: Monday,
Apr. 30
The exams will
be a multiple-choice format consisting of conceptual questions and
problems. Each exam will be worth 100
points with 25 questions worth 4 points each.
The exams will be roughly half conceptual questions and half
problems. Exam questions are drawn from the
textbook and lecture material which means you are responsible for all assigned
textbook material and any additional material covered in lecture that is not in
the textbook. The questions on the exams
will parallel the questions and problems that are assigned with each class and
those on the assignments.
Also, last semester’s exams are included in the
syllabus book for more practice and a feel for how the exams are structured.
An optional final exam will be given on
Saturday, May 5 (
1.
To make up for
an exam you missed during the semester; or
2.
To replace a
grade that is unsatisfactory (to you) on an exam. If the optional final exam is taken for this
purpose, your four highest exam grades among the 4 semester exams and the final
exam will be used in determining your final grade.
Grade Determination
Your course grade will be determined by your performance in
the following areas according to the following weighting
|
4 Exams, 100 pts each |
400 pts |
|
Aplia and other assignments |
85 pts |
|
Iclicker Class Participation |
15 pts |
|
Total |
500 pts |
Letter grades will be initially be based on a minimum of 90% or the total for an A, 80% for a B, 70% for a C, and 60% for a D. However, these percentages may and always are scaled downward somewhat after the fourth exam depending on the overall class performance and distribution. The final grading scale will have at least the top 20% of the class in the A range with the B cutoff being no higher than the class average in total points. Minus/plus grades will be given at the end of the semester. These minus/plus ranges will be 1% of the total or 5 points below the letter grade cutoff. For example, if the A cutoff is 450 points, then the A- minus range will be 445-449 and the B+ range will be 440-444. D+’s will be given, but D- grades will not be given. Also, A+’s will be given to the top 1% of the class.
Online Altira assignments will be given for each chapter. Also, one or two projects will be assigned. Please check the Assignments, Projects, & Class Participation page of the course website for more details.
Recommended Course of Study and Hints for Superior Performance
Recommended
Course of Study and Hints for
For students wishing to maximize both their learning and grade in this course, experience shows that several elements in the approach to the class and its requirements prove to be important.
For the assigned material…
1. Read the pages in the text ;
2. Work the self-test questions and problems within the chapter.
3. Work the self-test problems and questions at the end of each textbook chapter and check answers;
4. Work through Aplia online pre-test for the chapter
5. Work the suggested problems (PROB) in the text
6. Check the answers to the suggested problems in the text;
To review for the exams, one chapter at a time…
1. Read over the Key Chapter Concepts and the beginning of each chapter and the summary at the end of each chapter.
2. Review lecture notes for the chapter. Make sure you focus on your lecture notes
since I consider this material to be important.
3. Read over sections in the text for concepts and problems that gave you difficulty.
4. After your satisfaction of understanding concepts and problems for current chapter, repeat the above steps for the next chapter;
Other Hints:
Assignments. Most of the exam problems are similar to the problems and questions assigned at the end of each chapter and on the graded class assignments. Therefore, it is important for you to become familiar with these questions and problems and to be able to solve them by yourself.
For the end of the chapter problems and questions, do not just look at the solutions provided and convince yourself that you understand how they are solved from looking at the solution. Could you learn to play golf just by observing others playing golf? No! We all learn by doing! You should never encounter on an exam a problem that is of a type that you have never solved before. During the exam is not the proper time to be trying to learn how to solve a particular type of problem for the first time. Also, as you work through a problem, ask yourself the following questions: what concepts does this problem illustrate?, what does my answer mean?, what are the inputs in words to the problem?, why do I need these inputs to solve the problem?, and what would be the effect of changing the inputs on the answer? Answering these questions will not only help you with the problems, but will also help you prepare for conceptual exam questions.
Ask questions when you are not certain about something. Although it may be difficult to ask questions during lecture, you may do so or ask me right after lecture. Accumulate your questions and ask them during your discussion section meetings. Please feel free to come see me during my office hours (or make an appointment with me if my office hours are inconvenient) to ask questions about things you do not understand or just to chat. Also, feel free to e-mail me with any questions you may have. I will try to reply within two business days of your message submission. Also, use your teaching assistant’s office hours to do the same.
At times, students say they do not know what to ask. Usually, this results from too little effort to understand the material or little or no effort to solve a problem. If you have studied the material and tried to work the problems, and have not been successful, then you will have specific questions to ask.
Start early. It will take some time to do the assignments and the end of chapter problems. Recognize this and get started well before the due dates. The last minute crush often leads to the kind of shortcuts that may keep you from understanding the material.