ANTALYA INTERNATIONAL UNIVERSITY
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ANTALYA INTERNATIONAL UNIVERSITY
Fall 2014 ANTALYA INTERNATIONAL UNIVERSITY INTRODUCTION TO CORPORATE FINANCE (BUS 221) T-F 3:30– 4:50 p.m. (AG- 08 – Finance Lab) CONTACT INFORMATION Hilmi Songur, Ph.D. Department of Business Antalya International University Office: A2-71 hilmi.songur@antalya.edu.tr Office Hours: T-F 1.30-2.30.p.m. at room A2-71. You can reach me via e-mail. I will reply to your e-mail in 24 hours unless I am at a location where I do not have internet access. OBJECTIVES This course introduces corporate finance to students. The primary objective is to provide the student with the tools to understand and solve the basic financial problems confronting business today. The topics covered include the time value of money, valuation of assets, capital budgeting techniques, capital structure theory, and dividend policy. The application of the topics to international markets will be made whenever possible. After successfully completing this course, students should at a minimum: o understand and apply basic time value methodology to general valuation and integrated cash flow applications; o understand and apply the conceptual relationship between the expected return and the relevant risk of individual assets and portfolios of assets; o understand and apply the traditional evaluation techniques of capital budgeting analysis in business and personal capital investments; o understand the concept of cost of capital and financial leverage and apply those concepts in the determination of the optimal capital structure; and, o understand the current financial environment in which business decisions are made. COURSE MATERIALS : Required Text: Corporate Finance: Core Principles & Applications, 3rd Edition, by Ross, Westerfield, Jaffe and Jordan. ISBN-13 9780073530680 Course Notes will be posted on the Blackboard for download Financial Calculator: You must have a financial or business calculator to get through the course. Many of the exam problems involve complex arithmetic and financial calculations—and a financial calculator is necessary to solve them. Your calculator should be able to compute the net present value (NPV) and the internal rate of return (IRR). I recommend Texas Instruments BA II Plus. You may use HP-10BII if you prefer. It works fine, too. I will use Texas Instruments BA II 1 Fall 2014 Plus in class and explain how to work various problems with it, so you can follow lectures most easily if you use the same one. However, everything in this class can be done with either one. As you will soon see, the ability to use a financial calculator is critical to success in the class. You are responsible for learning how to operate your financial calculator—and it is crucial that you are familiar with your calculator. Make sure that you bring your calculator to every class. Students may not share calculators on exams. Please be sure to check your batteries before exams. Financial Blogs and web sites to visit: finance.yahoo.com, moneycentral.msn.com Suggested further readings: Brealey, R., S. Myers and F. Allen. Principles of Corporate Finance. 11e. 2014 ISBN: 0078034760 Copeland, T., J. Weston and K. Shastri. Financial Theory and Corporate Policy. 4e. ISBN13: 978-0321127211 BEING AN ACTIVE, INTENTIONAL P ARTICIPANT I want you to come to class with as an intentional student who is aware of why he/she is studying this topic. Make sure that you put every effort to understand how you learn best, the value of what you learned, and how that can be applied in settings other than the class activities. An intentional, self-directed learner makes connections between knowledge and skills learned in this class and the workplace. Intentional learners thrive in a changing world, because they know how to learn and bring together different sources of information and their experiences to make effective decisions. ONLINE RESOURCES : The use of Blackboard will help you learn to use instructional technology in your learning. This is important, because it is very likely that you will take other online courses in the future, if you have not already done so. Blackboard contains an email tool you can use to send the instructor emails about the course, or email each other. The Discussion Board is a tool to: o Help you communicate outside of class with your classmates; Post a question to the rest of the class; Discuss class related issues ; Complete online course work; But…it’s not for frivolous exchanges, stick to class-related issues. You can go to Twitter or Facebook for the other stuff. P ROFESSIONAL CONDUCT During this course, deal with the material and your colleagues as a professional. Consider class a regular meeting with your team of professionals and a great opportunity to exchange new ideas. Attending team meetings on time, being well prepared and participating in the team discussions are key parts of professional behavior. Make a commitment to your team members: Come to the meeting prepared by having completed your assignments prior to class. Meet your deadlines. Participate fully in all class activities and collaborate closely with your teammates. Be actively present in class: stay focused on the learning activities. Inform your teammates when you cannot attend a meeting, or you run into difficulties completing your tasks. They will help you, if you are genuine and honest. Be courteous and honest in communicating with others that shows respect and sensitivity to cultural, religious, sexual, and other individual differences among all class members. 2 Fall 2014 Provide constructive feedback that helps your teammates, class members, and the instructor improve their performance, and appreciate it when they provide you with the same. Do not fester over little things, let go and move on, you have important goals to achieve. CIVIL DISCUSSIONS AND LEARNING Respectful discussions are at the center of learning. Good discussions provide answers and raise questions that make us want to find out more. The team discussions in class are about the exchange of ideas. To understand your teammates’ ideas and reasoning you will have to listen carefully. That means only one person should speak at one time. If you disagree, state that you disagree with the idea, tell the person your reasons and provide evidence to support your point of view. A vigorous give-and-take discussion that focuses on ideas will help you learn much from each other. A focus on ideas does not attack the person; it is about exchanging and challenging thoughts and opinions. It is important that you become comfortable with such discussions, because of their learning potential. If you encounter a lack of civility and disrespect in discussions and you do not feel comfortable addressing the person, do not hesitate to see me. We will find a way to address it and improve the situation. USE OF STUDY GUIDES The Study Guides for each Chapter are on Blackboard under “Course Content.” They help you concentrate on key concepts in each chapter and focus your study efforts through a set of questions, so you do not spend your time on material that is not critical. Concepts are explained slightly differently from the textbook and may help you understand the material better. Use them alongside the textbook. THE TYPE OF THINKING YOU NEED TO STRIVE FOR During your studies at AIU you should work hard to develop the capability to think relativistically. In other words, when you are asked for your opinion, make sure you have done your research and understand the evidence and support for various other opinions before you develop a position or a point of view on issues. In this class you will be asked to present evidence for your positions and conclusions on a regular basis. Types of Thinking Dualism Multiplism Relativism Description A person believes that information is correct or incorrect, right or wrong, and that there are fixed ways of looking at the world. S/he relies on authorities to determine how and what to think. Has difficulty thinking independently, generating alternative perspectives, and being able to analyze information A person has the ability to see that uncertainties, unknowns, and doubts exist and that these naturally lead to different points of view. S/he has difficulty developing reasons why some opinions are better than others. Leads to considering alternative points of view, but without an ability to formulate and employ criteria for deciding consistently among them. A person recognizes that points of view differ in quality and that good ones are supported by evidence and other criteria. S/he uses discipline-related, legal, moral, religious, and other criteria to determine which opinions can be accepted, rejected, or need additional analysis. This approach leads to independent thinking, analyzing information, and using appropriate criteria to draw conclusions. 3 Fall 2014 HOW DO YOU EARN YOUR GRADE? Exams (3) 25% each 2.5% each Quizzes (10) Total 75% 25% 100% Three exams will be given for the class, two mid-term exams and one final exam. No make-up exams are given. The exams will cover material over a specified number of chapters (see course schedule for details). Quizzes will be given online. You can take the quiz two times. Quizzes will be available on the day the chapter is presented in class and stay available approximately 1 week (7 days). Details will be posted on the class BlackBoard site. Quizzes will be given for chapters: 2, 4, 5, 6, 8, 10,11, 12, 14, and 15. COURSE GRADE DETERMINATION 93% and above 88% - 92% 84 - 87% 80% - 83% 76% - 79% 71% - 75% 67% - 70% 63% - 67% 59% - 63% 56% - 59% < 56% A AB+ B BC+ C CD+ D F COURSE POLICIES AND RULES Attendance is important, given the course’s condensed format. If at all possible, please inform me ahead of time if you are going to miss a class or miss more than one hour of a class meeting. Cell Phones are OFF! The Antalya International University prides itself on its standards of academic excellence. In all matters of intellectual pursuit, AIU faculty and students must strive to achieve based on the quality of the worked produced by the individual. In the classroom and in all other academic activities, students are expected to uphold the highest standards of academic integrity. Any form of scholastic dishonesty is an affront to the pursuit of knowledge and jeopardizes the quality of the degree awarded to all graduates of AIU. Any student who commits an act of scholastic dishonesty is subject to discipline. Scholastic dishonesty includes, but is not limited to, cheating, plagiarism, collusion, the submission for credit of any work or materials that are attributable in whole or in part to another person, any act designed to give unfair advantage to a student or the attempt to commit such acts. Proven violations of the detailed regulations may result in sanctions ranging from disciplinary probation, to failing grades on the work in question, to failing grades in the course, to suspension or dismissal, among others. INSTRUCTOR`S BIO Dr. Hilmi Songur is an Assistant Professor of Finance and has joined the faculty at AIU in August 2014. His B.S. in Economics is from the Kadir Has University, MBA is from the Ball State University and Ph.D. is from the University of Texas at El Paso. Dr. Songur has taught courses in Corporate Finance, Financial Analysis, Investments, and Principles of Economics. He has presented his research at many prestigious conferences including FMA, EFA, and SFA Annual Meetings. 4 Fall 2014 COURSE SCHEDULE* Chapter Course Content Dates 1 Introduction to Corporate Finance Sept. 16-19 2 Financial Statements and Cash Flow Sept. 23-26 3 Financial Statements Analysis and Financial Models 4 Discounted Cash Flow Valuation Oct 10-14 5 Interest Rates and Bond Valuation Oct 21-24 Midterm 1 – Chapters 1-5 Sept. 30 – Oct 03 Oct. 28 6 Stock Valuation 7 Net Present Value and Other Investment Rules 8 Making Capital Investment Decisions 9 Risk Analysis, Real Options, and Capital Budgeting Nov 18-25 Midterm 2 - Chapters 6-9 Nov. 28 Oct 31-Nov 4 Nov 7-11 Nov 14 10 Risk and Return Lessons from Market History 11 Return and Risk: The Capital Asset Pricing Model (CAPM) 12 Risk, Cost of Capital, and Valuation 14 Capital Structure: Basic Concepts Dec 19 15 Capital Structure: Limits to the Use of Debt DEC 23 16 Dividends and Other Payouts DEC 26 Final Exam - Chapters 10-16 *The Syllabus is tentative and subject to change at any time during the semester. 5 Dec 2 Dec 5-9 Dec 12-16 TBA