West Virginia University

College of Business and Economics

BCOR 340 Business Finance, Fall 2004

 

Class meetings: MWF, 8:30-9:20 a.m., 458 B&E

Instructor: Alex Kurov

Office: 219 B&E

Office phone: (304) 293-7892

E-mail: alkurov@mail.wvu.edu

Office hours: MWF 9:30-10:30 a.m., or by appointment.


Course Description: This course is an introduction to the field of finance with a particular focus on corporate finance. The main objective of the course is to provide you with a basic understanding of several practical tools used in financial management. In particular, we will discuss the analysis of financial statements, time value of money, risk and return, bond and stock valuation and capital budgeting. Mastering this material is essential for your success in subsequent business courses. This course is a prerequisite to upper level finance classes.

Individual study and preparation are extremely important in this course. Expect to spend at least two hours out of class for each hour in class. Knowledge of accounting and basic algebra is assumed.

Materials

Required text: Fundamentals of Corporate Finance, 2003, 6th edition by S. Ross, R. Westerfield and B. Jordan, ISBN: 007-2932449. If you purchase a new text, it will be packaged with the Student Problem Manual and a self-study CD. Internet resources and interactive quizzes for the book are available at http://www.mhhe.com/rwj/

You will need a financial calculator in this class. There are several different calculators available, and any one is fine. Personally, I recommend the Texas Instruments BAII Plus, and I will use this calculator in my lectures.

The Wall Street Journal or other financial newspapers are highly recommended. It is important that you keep up with current financial news. Articles can be assigned as required reading from time to time.

Grading: The following exams and assignments will constitute your grade for the course:

Exam 1, September 15

20%

Exam 2, October 15

20%

Exam 3, November 15

20%

Final Exam (cumulative), December 15

25%

Homework quizzes

15%

You are permitted to begin the three midterm exams 1/2 hour before the official start of class. No make-up exams will be given except in extraordinary circumstances (suitable documentation will be required). You must contact me in advance if you are unable to be in class when an exam is scheduled.

There will be about five unannounced bonus quizzes during the semester. Each of the quizzes is one point toward your total score.

Your final grade will be determined using the following scale: A: 90-100; B: 80-89; C: 70-79; D: 60-69; F: below 60. I may curve the grades at the end of the semester if I find it necessary. The above grading scale may be adjusted if a curve is used.

Homework: The homework assignments will be posted on WebCT and should be completed, but do not need to be turned in. In addition, for most chapters you will need to complete a multiple-choice quiz through WebCT within a defined window of opportunity. Your lowest quiz score will be dropped. Solving homework problems is the best way to prepare for exams.

Attendance: Regular attendance is important. Students who attend classes regularly tend to earn higher grades and have higher passing rates in courses. To enhance your understanding in class, you should read the relevant chapters before coming to class.

Academic Dishonesty: Academic dishonesty in any form will not be tolerated.

Teaching Assistant: The Teaching Assistant for this course is Ellis Heath. His office is 256 B&E. You can contact him at ebheath@mail.wvu.edu or at 293-7897. Ellis has scheduled office hours on Mondays and Wednesdays from 11:30 a.m. to 12:30 p.m.; other times are by appointment.

How to Improve Your Grade:

1. Read the entire chapter before lecture.

2. Practice, practice, practice.

3. Don’t wait until the day before the exam to learn what you did not understand. If you have made the effort but feel that you need help, don’t hesitate to talk to the teaching assistant or the professor. If you need private tutoring, you may contact Nicki Metts, program assistant of the Division of Business and Economics (293-7859, nicki.metts@mail.wvu.edu).

Course Outline (tentative)

Topic

Chapter

Exams

1. Overview of Corporate Finance

1

 

2. Time Value of Money (FV, PV, Compounding)

5

 

3. Discounted Cash Flow Valuation (FVA, PVA, EAR)

6

 

 

 

Exam 1

4. Interest Rates and Bond Valuation

7

 

5. Stock Valuation, Stock Markets

8

 

6. Capital Budgeting: NPV and Other Investment Criteria

9

 

 

 

Exam 2

7. Using Financial Statement Information

2, 3

 

8. Capital Budgeting (cont.): Making Capital Investment Decisions

10

 

9. Risk and Return: Historical returns

12

 

 

 

Exam 3

10. Risk and Return (cont.): Expected returns, Security Market Line

13

 

11. Cost of Capital

15

 

12. Financial Leverage and Capital Structure Policy

17

 

 

 

Final Exam

 

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