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                                                       Economics/Finance Department

REQUIRED TEXT:
Essentials of Managerial Finance, Eleventh edition, by J.F. Weston, S. Besley,
and E.F. Brigham, The Dryden Press, 1993.

The Wall Street Journal (subscription is suggested)

DESCRIPTION OF COURSE:
This course is designed to provide to Business students the basic concepts and Principles of
Financial Management. It serves as the foundation course for financial principles used in both
Financial Management and Investment courses. Topics include Introduction to Managerial
Finance, Time Value of Money, Risk and Return, Capital Budgeting, Cost of Capital, Capital
Structure and Dividend Policy, and finally, Strategic Long-term Financing Decisions.

OBJECTIVES:
The major objectives of the course are:

1. To familiarize students with the basic principles, concepts and terminology of Managerial Finance.

2. To learn the mathematics and the valuation of the main instruments used in Finance.

3. To build a theoretical and empirical background by using computers ( Excel, Eviews, TSP, and A-Pack) data, and references useful for their future studies and work.

TOPICS COVERED:

Topics Classroom Hours

Introduction to Managerial Finance 5

1. An Overview of Managerial Finance

2. The Financial Environment: Markets,

Institutions, Interest Rates, and Taxes

3. Analysis of Financial Statements

Essential Concepts in Managerial Finance 7

5. Risk and Rates of Return

6. Time Value of Money

7. Bond and Stock Valuation

Strategic Long-Term Investment Decisions: Capital Budgeting 4

13. Capital Budgeting Techniques

14. Project Cash Flows and Risk

The Cost of Capital, Leverage, and Dividend Policy 8

15. The Cost of Capital

16. Capital Structure and Leverage

17. Dividend Policy

Strategic Long-Term Financing Decisions 10

18. Common Stock and the Investment Banking Process

19. Long-Term Debt

20. Hybrid Financing: Preferred Stock, Leasing, and Option

Securities

Mergers, Divestitures, Holding Companies, and LBOs
 

CLASS MEETING:

The class meets for 28 sessions of 1 hour and 15 minutes duration, plus a final examination.
 

TEACHING METHODS AND ASSIGNED READINGS:

The teaching method will be lectures and classroom discussions. Homework assignments will
be given during the course plus a small project of estimating the rate of return of a few stocks
by using CAPM, computers (TSP or EViews) and actual market data. Another daily reading
assignment will be The Wall Street Journal and its information will be used for the project.
Also, there will be three exams, the first on March 3rd, and the second on April 14th, and the
final exam. Each exam and your assignments together with your attendance, class participation
and performance will count for 25% of the course.

The Grading scale is the following:
0 - 59: F 76 - 79: C+-
60 - 63: D 80 - 83: B-
64 - 67: D+ 84 - 87: B
68 - 71: C- 88 - 91: B+-
72 - 75: C 92 - 95 A-
96 - 100 A

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