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Dixie State College – Udvar-Hazy School of Business FIN4150 – Managerial Finance II
Instructor Kyle S. Wells, PhD Phone: 652- Office: Udvar-Hazy 343 Email: kwells@dixie.edu Office hours: MTWRF 11:00-12:00 A.M. Class Schedule: TR, 7:30-8: Pre-Requisites: FIN 3150 (Managerial Finance I)
Required Materials
- Scott Besley and Eugene F. Brigham, 2008, Essentials of Managerial Finance , 14th^ edition.
- Case packet – we’ll discuss this in class.
- A financial calculator (see below).
Overview
The course is designed to expand upon those concepts gained in FIN 3150 (Managerial Finance I). This course is a hybrid of a lecture and case study course. The case study method is designed to apply a broad set of decision making tools to a potentially real situation. It was originally developed at the Harvard Business School and is used extensively in MBA and graduate business programs across the country.
This is a depth course aimed at delving deeper into the financial decision-making and financial management of public and private firms. The course is intended to stimulate the interest in the field of finance as an area of further study and as an area of practice for a life-long career. The ultimate goal is to develop critical thinking so as to evaluate dispassionately the merits and demerits of different policies and projects and of techniques of financial management. This analytical ability can be developed by solving and discussing problems.
I recommend that you regularly read the Wall Street Journal or similar publication to increase your understanding of business and finance. Please feel free to ask any questions you have related to this reading.
Course Objective
- Further understand the financial environment.
- Analyze and compare costs of capital.
- Create and evaluate pro forma statements of income and expenses.
- Analyze and compare alternative dividend policies.
- Expand knowledge of alternative valuation techniques.
- Expand knowledge of capital structure and its effects on value.
- Expand knowledge of alternative long-term financing sources (debt, equity, leasing, etc.).
- Learn tools to manage working capital.
Attendance
The success of this course depends on class participation. You are not required to attend every class; however, excessive absences may be detrimental to your final grade. You are responsible for all material presented in class, regardless if you were present or not. This includes instructions on assignment format and turn-in procedures. If you miss class, I will be glad to tell you what material you may have missed but I will not re-teach it.
Cases and Readings
Selected cases have been taken from Case Studies in Finance: Managing for Corporate Value Creation , Fifth edition, by Robert F. Bruner. In addition, some cases will be borrowed from cases written by Ron Lease. All cases used in this class are copyrighted. The Bruner cases may be purchased. I have permission to use selective material produced by Ron Lease which will be available on WebCT.
Cases are designed to enable a student to integrate financial theory into real world situations. These situations are often distinctly different from textbook examples. A primary difference is that in the case study method, information given may be incomplete and some of the specifics may not apply. It is the job of the student to differentiate, summarize, analyze and make assumptions where no information is given. The following outline is a good way to approach the case study method:
- Read the case in its entirety.
- Read it again noting details and developing your awareness of situational details.
- Define the problem.
- Prepare the quantitative analysis addressing the problem (typically in a spreadsheet format).
- Take a position prior to class discussion and defend that position.
Your case study grade will be largely determined from participation. Students from the class will be chosen randomly and “cold-called” during the case discussion. It is in your best interest to prepare each case prior to attending class. Participation credit is awarded to those students able to answer questions from the case.
Some cases require you to write-up your position supported by analysis. When a written deliverable is required, I will announce it in class and give you ample time to prepare.
Homework:
Select end-of-chapter homework will be assigned from the text to enhance your mastery of the materials. The problems will be collected and graded on a completion basis only. They are primarily for your benefit and help you prepare for class and exams. Solutions will be made available once you have had a chance to work the problems. We will also devote a portion of class time to a review of this material.
Approximate Schedule
Week Class Discussion DiscussionAssignment Write-upAssignment
1 IntroductionThe Case Method and Professional Writing
2 Chapter 10: Project Cash Flows and RiskIntegrative Problem 10-16 IP 10-
3 Star River CaseChapter 11: The Cost of Capital Star River
4 Integrative Problem 11-29The Cost of Capital and EVA IP 11-
5 Nike Inc. Case^ Nike Inc.
6 Coke vs. PepsiChapter 12: Capital Structure Coke vs.Pepsi
7 Capital Structure continuedAn Introduction to Debt and Value Intro to Debtand Value
8 Wm. WrigleyUnlevering Beta and Wrigley continued Wm. Wrigley
9 Mid-term Review and Exam
10 Spring Break
11 Chapter 2: Ratio Analysis (review)The Financial Detective The FinancialDetective
12 Chapter 17: Financial Planning & ControlIntegrative Problem Part 1 IP 17-16 P1&
13 Integrative Problem Part 2The Body Shop The BodyShop
14 Chapter 14: Working Capital ManagementIntegrative Problem IP 14-
15 Chapter 13: Dividend PolicyGainesboro Machine Case GainesboroMachine
16 Review for Final Exam
Americans with Disability Act.
Dixie State College and the Udvar-Hazy School of Business seek to provide equal access to its programs, services, and activities to people with disabilities. If you will need accommodations in this class, reasonable prior notice needs to be given to the instructor and to the Disability Resource Center (SSC, room 201, 652-7516) to make arrangements for accommodations. All written information in this course can be made available in an alternative format with prior notification to the Disability Resource Center.
The Northwestern Mutual Investment Challenge
As an ancillary to this course, you may participate in an online investment game. The rules of the game will be discussed in class and are presented on the website. You are not required to play, you will not be penalized for not participating and grade points are not awarded to those choosing to participate. At the end if the semester, those who accumulated the highest returns will be rewarded by Northwestern Mutual Insurance. The number of winners and the size of the reward are determined solely by the sponsors.
I have found that this game adds dimension to the course and exposes students to trading in financial markets; however, due to the element of luck, participation is not required. The following is the URL, game name and password required to enter the game. You will also be required to register with your own personal user email and password. I suggest using an email that you don’t mind being used and sold to third parties. Occasionally this may happen although privacy policies are included on the website.
http://vse.marketwatch.com/Game/Homepage.aspx GAME NAME: FIN_s PW: security
