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Finance 332

FINC 332: Intermediate Business Finance

Prerequisites: FINC 331

Credit Hours: (3)

Applies the analytical tools acquired in FINC 331 Introduction to Business Finance to further explore the theory and practice of financial decision making to enhance firm value. Topics include advanced capital budgeting techniques, cost of capital, capital structure, dividend policy and mergers and acquisitions.


 Detailed Description of Course

1. Advanced Topics of Time Value of Money
2. Asset Valuation
    a. Bond Valuation
    b. Stock Valuation
    c. Capital Asset Pricing Model
    d. Free Cash Flow and Corporate Valuation Model

3. Project Analysis and Evaluation under Uncertainty
    a. Capital Budgeting
    b. Cash Flow Estimation and Risk Analysis
    c. Cost of Capital and Project Risk
    d. Real Options
4. Forecasting Financial Statements
5. Capital Structure
    a. Financial Leverage
    b. Capital Structure Theory
    c. Optimal Capital Structure and Decisions

6. Dividends and Dividend Policy

7. Lease Financing

8. Working Capital Management

9. Corporate Control and Corporate Restructuring
    a. Mergers and Acquisitions



Detailed Description of Conduct of Course

The class includes lectures on the above topics and application of theory to problem solving. Instruction is augmented by outside readings and a project on the securities market as deemed necessary by the instructor. Students will use electronic spreadsheets to facilitate analysis.


Goals and Objectives of the Course

Having successfully completed the course the student will be able to:

1. Apply different financial asset valuation techniques;
2. Analyze projects and project risk;
3. Understand methods used to raise funds in the capital markets;
4. Understand how the cost of capital is estimated for individual firms and projects;
5. Understand the concept and impact of capital structure on corporate value;
6. Understand working capital management; and
7. Understand rationale and evaluation of mergers and acquisitions.


Assessment Measures

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


Other Course Information

None


Review and Approval
DATE ACTION APPROVED BY
February 2010 Reviewed Dr. Dan Davidson, Chair

03/2011