GBUS 643: Managerial Finance Master Syllabus
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Course Website: Canvas
Course Description
The objective of this course is to teach students how to apply modern financial theory to the investment and financing decisions of a corporation by providing them with the fundamental analytical tools of corporate finance. We will start with the foundational concept of time value of money and build up to a full-fledged company valuation by the end of the course. Along the way, we will cover topics like capital budgeting, portfolio theory, asset pricing, risk-return tradeoff and capital structure throughout the course. Although numbers and formulas will be an important part of the course, the main goal is establishing a solid grounding in some of the basic concepts in finance and developing skills to apply those concepts in financial management and decision-making.
Class meetings will be a combination of lecture, discussion, activities, and guest speakers. Each class member is expected to be well prepared for each session and to actively participate in discussions through which I hope that we can learn as much as possible in the weeks we will spend together.
Learning Goal
Upon successful completion of this course students will be able to demonstrate the ability to analyze uncertain complex management situations using appropriate tools, techniques and information systems for decision-making.
Textbook
Corporate Finance, 13th edition, Ross, Westerfield and Jaffe (RWJ), McGraw-Hill Irwin, New York, NY, 2022. (BKM). You may purchase an electronic copy of the textbook, or rent/buy a physical copy via the George Mason University bookstore or anywhere else.
Although RWJ is the required textbook, I also recommend Principle of Corporate Finance, Brealey and Myers as a reference textbook. Additionally, I strongly encourage you to consider a subscription to the Wall Street Journal and to read other business or finance-oriented periodicals on a regular basis, such as The Economist, Bloomberg BusinessWeek, Fortune, Forbes, Barron’s, etc.
Students may also wish to keep up with financial news on websites such as: http://www.bloomberg.com; http://www.cnbc.com; http://finance.yahoo.com; http://www.google.com/finance.
Articles and online resources to emphasize key concepts and applications will be posted on Canvas.
Other Resources: You will need a calculator with financial functions (eg. PV, FV, PMT, P/Y, I/Y, etc.). Look for a financial calculator such as a ‘Hewlett-Packard 10bII Plus’ or ‘Texas Instruments BA II Plus’. Check for financial functions. The calculator should be brought to class on a regular basis.
Exams
There will be an in-class midterm exam and a take-home final exam. Exams will be a combination of multiple-choice questions and problems.
- The midterm exam (Week 4) will be closed book, but you will be allowed to bring one single-sided formula sheet and to use a non-programmable calculator. I will ask you to turn in your formula sheet with your exam. There will be no make-up exam. In the event that a student is unable to attend the midterm, it is his/her responsibility to notify me prior to the exam and with reasonable notice. Only in extraordinary circumstances the student may be authorized to take the exam on a different date.
- The final exam will be a take-home open-book exam and comprehensive in scope. More details will be provided closer to the exam date. The final exam will be made available on Blackboard at 12:00pm on Thursday, May 12. Completed exams must be submitted on Blackboard no later than 12:00pm on Saturday, May 14 (48 hours later). There will be no make-up exam.
Practice Problems
In addition to assigned text readings, there will be ungraded practice problems from the text that are assigned to reinforce key concepts and to provide opportunities to practice quantitative methods. Completion of these problems is entirely voluntary. They will not be in included in the course grade.
Quizzes
There will be two scheduled quizzes (with the lowest quiz grade dropped). Quizzes will be a combination of multiple-choice questions and short problems. They will be based on text readings.
Problem Sets
There will be two problem set assignments to be completed individually. For all assignments, an electronic copy of your work must be submitted via Blackboard prior to 7:00pm on the day of class. Late submissions will not be accepted. Additionally, a hard copy must be submitted at the beginning of class that week.
Case Assignment
MERCURY ATHLETIC: VALUING THE OPPORTUNITY
https://hbsp.harvard.edu/catalog/course/913789
Learning Objectives:
- (1) Enables students to develop and combine a set of cash flow projections, an estimate of the weighted average cost of capital, and a determination of the terminal value into a complete estimate of firm value.
- (2) Examines the valuation of synergies and acquisition premiums.
For the case assignment, Student groups (2-4 students per group) will submit a project report via Canvas and make a team presentation in Week 7. [Note: You will not be allowed to work alone, so please plan accordingly]. Details about the project will be handed out in class. Projects will be evaluated on written work and the in-class presentation. Students are encouraged to work with Ted May (theomay@gmail.com) on their final presentations. Ted is a great resource for help on presentations/public speaking. He is on retainer with George Mason University Costello College of Business.
Peer evaluation forms will be distributed to allow students to rate relative contributions of each group member. These ratings will be utilized when determining overall grades for the case assignment.
Grading
| Weighting | ||
| 55% | Exams | |
| Midterm Exam (April 13) | 20% | |
| Final Exam (Take-home due May 14) | 35% | |
| 10% | Problem Set Assignments | 10% |
| 5% | Quizzes | 5% |
| 10% | In Class Participation | 10% |
| 20% | Case Assignment | |
| Project Report | 10% | |
| Project Presentation | 10% | |
| 100% | Total | 100% |
Grade Scale
| Letter Grade | Percentage | Quality Points | Assessment |
| A | >90.0% | 4.00 | Satisfactory/Passing |
| A- | >86.6% | 3.67 | Satisfactory/Passing |
| B+ | >83.3% | 3.33 | Satisfactory/Passing |
| B | >80.0% | 3.00 | Satisfactory/Passing |
| B- | >76.3% | 2.67 | Satisfactory/Passing |
| C | >70.0% | 2.00 | Unsatisfactory/Passing |
| F | below 64% | 0.00 | Unsatisfactory/Failing |
Please note: grades/percentages will not be ‘rounded up’.
You can access Patriot Web for final grades approximately 48 hours after the due date of the takehome final exam. Once posted, they are final. I do not negotiate final grades.
Course Outline
GBUS 643: MANAGERIAL FINANCE (SAMPLE)
| Class No. | Date | Segment | Topics | Required Readings/Assignments |
| Week 1 | Time Value of Money | Introduction / Course Objectives Introduction to Corporate Finance Discounted Cash Flow Valuation |
Reading: RWJ: Chapter 1 & 4 | |
| Week 2 | Capital Investment Decisions Capital Budgeting |
Net Present Value (NPV) and Internal Rate of Return (IRR) Capital Budgeting Capital Investment Decisions and Capital Budgeting Working Capital Management |
Reading: RWJ: Chapter 5 & 6 Quiz #1 |
|
| Week 3 | Bond and Stock Valuation MIDTERM REVIEW |
Interest Rates and Bond Valuation Stock Valuation Midterm Exam Review |
Reading: RWJ: Chapter 8 & 9 | |
| Week 4 | MIDTERM EXAM Risk and Return |
Lessons from Market History / Financial Crisis of 2008 | Problem Set 1 is due Reading: RWJ: Chapter 10 |
|
| Week 5 | CAPM Efficient Market Hypothesis |
Risk, Return and Capital Asset Pricing Model (CAPM) Market Efficiency Behavioral Biases |
Reading: RWJ: Chapter 11 & 14 | |
| Week 6 | Cost of Capital Capital Structure |
Cost of Capital Weighted Cost of Capital (WACC) and Valuation Capital Structure: Basic Concepts |
Reading: RWJ: Chapter 13 & 16 Quiz #2 |
|
| Week 7 | Capital Structure Case Discussion |
Capital Structure: Limits to the Use of Debt Case Presentations and Discussion |
Reading: RWJ: Chapter 17 Problem Set 2 is due Case Analysis / Report is due |
|
| Week 8 | FINAL REVIEW | Final Exam Review | ||
| FINAL EXAM | Take Home Exam (available May 12 - due May 14) | Note: Final Exam will be Open Book | ||
Note: RFJ = Ross, Westerfield and Jaffe, "Corporate Finance", 13th Edition
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