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Finance 331

FINC 331: Introduction to Business Finance

Prerequisites: ACTG 212; STAT 200

Credit Hours: (3)

Introduces financial concepts and techniques of financial management and emphasizes an understanding of how the principles of finance can be used to enhance the value of the firm. Topics include the mathematics of interest and the time value of money, financial statement analysis and forecasting, valuation techniques, the measurement and relationship between risk and expected return, capital investment decisions, and working capital management.

 

Detailed Description of Content of Course
Overview of Corporate Finance
a. Introduction to Corporate Finance
b. Financial Statements and Taxes
Financial Statements and Cash Flow Analysis
a. Working with Financial Statements
b. Operating Cash Flow and Free Cash Flow
Time Value of Money
a. Present Value and Future Value
b. Annuities and Unequal Periodic Cash Flows
c. Compounding Interest Rates
d. Loan Amortization

Risk and Return
a. Calculating Returns
b. Stand Alone Risk and Portfolio Risk
c. Diversification
d. Capital Asset Pricing Model

Interest Rates and Bond Valuation
a. Interest Rates and Term Structures of Interest Rates
b. Legal Aspects of Bonds
c. Bond Yields
d. Bond Valuations

Stocks and their Valuation
a. Legal Aspects of Stocks
b. Common Stock versus Preferred Stock
c. Issuing Common Stock
d. Common Stock Valuation

Capital Budgeting
a. Net Present Value and Other Investment Criteria
b. Making Capital Investment Decisions
The Cost of Capital
Principles of Working Capital Management

Detailed Description of Conduct of Course
Primarily a course lecture/discussion where instruction includes demonstrations, in-class exercises, problem assignments, and periodic exams. Instruction is augmented by outside readings and projects that deal with financial statement analysis as deemed necessary by the instructor.

 

Goals and Objectives of the Course
Having successfully completed the course, the student will be able to:
•    explain why financial management is important
•    understand the financial system, interest rates, and taxes
•    analyze financial statements
•    analyze cash flows
•    understand and use the formula for the time value of money
•    use bond and stock valuation techniques
•    use capital budgeting techniques
•    explain the relationship between risk and return
•    calculate the weighted average cost of capital (WACC)

 

Assessment Measures
Graded assignments may include in-class tests, a final examination, online homework, pop quizzes, the assignment and presentation of problem exercises, projects, and class preparation and participation.

Other Course Information
None


Review and Approval

DATE ACTION APPROVED BY
February 2010 Reviewed Dr. Dan Davidson, Chair
July, 2010