Loyola University Maryland FI 320 Financial Management Sections 02;03;04;05, Fall, 2021Page1of7Course Syllabus FI 320 Sections 02;03;04;05, Financial Management Instructor and Course Information Instructor:Matthew Brach, DBA, CPA Email:Telephone:Office Location:Office Hours:[email protected]410.617.2755 SH - 406 Monday/Wednesday 12:45-2:45 Course Connections Course Format and Purpose This course will be a combination of lectures (synchronous and asynchronous) and problem solving.We will work and solve problems together in class, but it is expected that students will do the appropriate level of reading and homework outside of class for class time to be most productive.Homework and "Interactives" will be via the McGraw/Hill Connect system, as well as quizzes and exams. Our goal is to internalize basic financial formulas and concepts.This will aid you in future courses in finance, but also to assist in your lifelong career aspirations, even if finance is not your major or career goal. The role of finance within society is to achieve an efficient allocation of resources by managing the costs of capital within a free market system.Finance is applied economics, especially the concept of opportunity costs.The financial manager, be it within either a corporate or banking role, utilizes certain methods of analysis to assist in the capital allocation decision process.Capital is a term used loosely and liberally in the practical financial world and is not necessarily moored to textbook definitions.In this class capital and money may be used interchangeable but refer primarily to the stored value of wealth and a medium of exchange.Therefore, we describe "money" as the product that is purchased for an amount over time, wherein return is the cost (price) for the use of that capital.Therefore, cash flow is the fulcrum of analysis and time is the measurement. Return is the compensation, if you will, to providers of capital for the risk of investing. Therefore, we will cover topics such as capital budgeting, cost of capital, financial markets, financial statement analysis, risk and return, and stock and bond valuation. Although theory will be important, the class will be skewed towards practical application.
Loyola University Maryland FI 320 Financial Management Sections 02;03;04;05, Fall, 2021Page2of7Benefits of the Course The course will be a broad introduction of certain topics, but also provide a solid basis for certain concepts and analysis, including: •Explain the role of finance and the financial manager/management •Time value of money (TVM), which includes, but is not limited to: oCalculating the present and future values of single cash flows (CF) and multiple CF, including annuities and perpetuities; valuation of uneven streams of CF oUnderstand the concepts of compounding interest (return) and amortization oDescribe and value a bond, including yield to maturity (YTM) oDescribe and value preferred and common stocks (equity) oEstimated cash flows for capital budgeting projects •UtilizeNet Present Value (NPV)andInternal Rate of Return (IRR)decision tools when capital budgeting projects; understand capital rationing and sunk costs •Understand the link between capital budgeting the creation of firm value and its impact on bond and equity value. •Financial statement analysis, especially the Balance Sheet and Income Statement an interaction between both statements, their connection to the Statement of Cash Flows.Utilize this analysis to determine the financial health of a company. •Calculate historical and expected rates of return. Measure risk using standard deviation and beta.Estimate rates of return for stocks using theCapital Asset Pricing Model (CAPM) •Calculate the cost of the various components of capital (debt, preferred, common) and determine theWeighted Average Cost of Capital (WACC) In addition, we will examine the "agency costs" issues resulting from the conflicts, or misalignment of interests, between owners and managers.Commit the following formulas to memory: FV = PV*(1+r)n PV = FV/(1+r)n
Loyola University Maryland FI 320 Financial Management Sections 02;03;04;05, Fall, 2021Page3of7Required Resource and Material Purchases Required:Essentials of Corporate Finance, Ross, Westerfield, Jordan, 10th Edition. Hardbound copies are not required, but access to the McGraw Hill Connect eBook and product are necessary.ALL HOMEWORK, QUIZ, and EXAMs will be via the MH Connect product. Moodle: a significant amount of course materials, information, and assignments will be available through Moodle and Connect. Financial calculator: TI BAII Plus preferable. Other makes/models require learning specifics of that calculator.Although calculators are necessary, think of this class as an extension of algebra and statistics where performing some calculations by long-hand may assist in internalizing the formula. In addition, we will read and review: •Articles from major publications (The Wall Street Journal, The Economist, etc.), •Web resources, such as Stanford's "ecorner" website: ttps://ecorner.stanford.edu/,https://money.cnn.com/data/markets, https://www.bloomberg.com •Plus, Dr. Damodaran from NYU has an incredibly useful homepage: o Damodaran Online: Home Page for Aswath Damodaran (nyu.edu) Peer work: I always suggest you communicate and work with your peers as group learning is always better than individual effort.For that reason, this syllabus includes ALL SECTIONS taught by Dr. Brach. Attendance Policy/Tent Cards/Homework/Interactives: The policy is so nice, it is listed twice.Your homework and participation grade are based on straightforward calculation of HW and Interactives complete (not the grade, but completing), PLUS your attendance ratio. It is a ratio of complete to total for both. Attendance will be taken after the first two weeks by tent card.If you have your tent card with your name, you are present, if not, you are absent.Attendance exceptions for medical, interviews, attending a school event, participation in athletic teams, etc.