Classroom Syllabus

MC 556

Management of Finance

3 Credit Hours

Effective: May 2009

Instructor:

Peter Folk, MBA

Adjunct MBA Faculty, Slovakia

Term: Spring 2009

Course Dates: May 23+24, 30+31, June 13+14

Class Times: 9AM to 2PM at CU in Bratislava

Required Resources

Brigham, E.F., & Ehrhardt, M.C. (2008). Financial management: Theory and practice (12th ed.). Mason, Ohio: Thomson, South-Western.

Research paper guide. (2004).Trenčín, Slovakia: City University. Available for purchase in the library or online at http://www.vsm.sk/files/sh/rpg2004.pdf

Access to a personal computer and the Internet is required. All written assignments must be word-processed.

Copyright 2007 - 2009 by City University of Seattle

All rights reserved

MC 556

Management of Finance

This document provides an overview of the course foundation elements, assignments, schedules and activities. For information about general City University policies, please see the City University catalog. If you have additional questions about the course, please contact your instructor.

Notification to Students with Disabilities

If you are a student with a disability and you require certain help, please contact the site administrator as soon as possible.

Course Description

The course covers further topics in corporate financial management, including analysis of financial statements, financial planning and forecasting, corporate valuation, strategic financing decisions (capital structure decisions, dividends and repurchases), tactical financing decisions (initial public offerings, financial restructuring, lease financing, hybrid financing), working capital management, derivatives and risk management, bankruptcy, reorganization, and liquidation, mergers and LBOs, and multinational financial management.

Learning Goals

Upon the successful completion of this course, you will be able to:

1. Assess a firm’s financial performance and condition and do financial statement forecasting;

2. Perform corporate valuation;

3. Review the determine the optimal capital structure and understand capital structure theory in more detail;

4. Understand distributions to shareholders, including dividends and repurchases;

5. Understand initial public offerings and financial restructuring

6. Understand other financing decisions including lease financing and hybrid financing (preferred stock, warrants, and convertibles);

7. Perform effective working capital management - including cash, accounts receivable, inventory, short-term investments and short-term financing;

8. Use derivatives to reduce risk;

9. Analyze financial distress and its consequences, reorganization and liquidation in bankruptcy;

10. Analyze the conditions for, process, and results of mergers, leveraged buyouts, and divestitures;

11. Compare and contrast multinational and domestic financial management.

Core Concepts

To achieve the goals of this course, you will need to master the following core concepts:

1. Financial ratio analysis; the Dupont equation; financial statement forecasting;

2. Corporate valuation model;

3. Optimal capital structure and capital structure theory in general;

4. Dividends and repurchases; stock splits and stock dividends;

5. Initial public offerings and financial restructuring;

6. Lease financing;

7. Hybrid financing, including preferred stock, warrants and convertibles;

8. Working capital management;

9. Derivatives and risk management;

10. Bankruptcy, reorganization, and liquidation;

11. Mergers, LBOs, and divestitures;

12. Multinational financial management.

Entry Competencies

A prerequisite for enrolling in this course is completion of MC 553 (Principles of Finance) or evidence of an equivalent knowledge of finance.

Recommended Supplementary Resources

As a City University of Seattle student, you have access to library resources regardless of where and how you are taking this class. To access the resources necessary to complete your coursework, visit the library menu in the My.CityU portal at https://my.cityu.edu, and the CU Slovakia library home page at http://library.cutn.sk/.

A good place to begin your research is through the management program resources page in the My.CityU library. It provides links to relevant journals, books, and Web sites. Search the online databases for journal, magazine, and newspaper articles. For additional help, visit the Slovakia library or submit your question in the Contact Us section of the Slovakia library’s web site.

Electronic Resources

The following Internet resources may be of use to you in this course. Many other useful Web addresses are provided in the textbook. Please be aware that Web addresses may change from time to time.

City University of Seattle

http://my.cityu.edu

Financial news:

http://finance.yahoo.com

http://www.thestreet.com

http://money.cnn.com

Journal of Finance

http://www.cob.ohio-state.edu/dept/fin/journal/jof.htm

The Wall Street Journal Online

http://www.wsj.com

United States Securities and Exchange Commission (includes EDGAR database of company annual reports)

http://www.sec.gov/index.html

Wall Street Research Net

http://www.wsrn.com

Overview of Course Activities and Grading

The grade you receive for the course will be derived using City University’s decimal grading system, based on the following:

Assignments

Case Study

30%

Financial News Analysis - Presentation

30%

Final Examination

40%

TOTAL

100%

Please see the current City University catalog or consult your instructor for guidance in determining your decimal grade.

Explanation of Assignments and Grading

Case Study

Your instructor will provide this graded case assignment. You should treat it as a problem presented to you by your company’s top management for analysis and decision recommendations. Hence, your paper should demonstrate the qualities of thorough and relevant research, logically sound analysis, and focused professional writing. For each question about the case, clearly indicate which question you are answering, and show all computations (where applicable) to support your conclusions. Where assumptions must be made, state and justify them clearly. Your instructor may also give you some guidance on the assumptions you should make.

Grading Criteria for Case Study

Demonstrated understanding of relevant course concepts

20%

Clarity of explanations

20%

Completeness and accuracy of calculations

20%

Logically supported conclusions

25%

Professional presentation (including language and format)

15%

TOTAL

100%

Financial News Analysis

This assignment is designed to (a) stimulate you to find out what is happening in the financial world today by reading current newspapers and magazines, (b) help you to learn the course material by seeing how it applies to real companies, events, and situations, and (c) challenge you to analyze and evaluate financial news so that you can form your own opinions.

Steps:

1. Go to your local library or visit the City University on-line library and review recent issues (published within the past 30 days) of the following periodicals: (a) The Wall Street Journal or (b) Business Week magazine. (Articles from these sources’ websites are permissible, but they may require subscription to access the articles on-line.). Look for news articles that (a) related to topics covered by the MC556 course and (b) raise interesting issues about company financial management. Try to find an article that will help you do well on the trading criteria for the assignment (listed below). Check with the instructor to make sure that an article you found is appropriate.

2. Prepare a brief summary of your findings and present it to the class. It should take you no more than 10-15 minutes to present your conclusions. Visual materials are required - Microsoft PowerPoint presentation is strongly recommended. You will be expected to turn your presentation in. The format is to be appropriate for a Board of Directors or a venture capitalist. Additional criteria will be provided by the instructor, but your presentation should primarily:

· Explain the news item (the event and why the newspaper or magazine thought it was newsworthy)

· Give some facts about the companies and people involved (you may have to do some further research beyond the news article itself)

· Explain the connection between the news article and the MC 556 course

· Identify key actions or decisions described in the news item and evaluate them, giving your own opinions and your reasons

3. You must have a photocopy of the original news items, showing the date of publication available at the time of presentation.

Grading Criteria for Financial News Presentation

Choice of news article (relevance, importance, interest)

20%

Clarity of explanation of the news item

15%

Explanation of the connection to the course material

10%

Analysis and evaluation of the issues relating to financial management

20%

Professional demeanor

15%

Capacity to handle questions and feedback

10%

Grammar, spelling, punctuation, and clarity of visual materials

10%

TOTAL

100%

Additional Requirements for Assignments

Homework Assignments

To achieve the learning objectives of this course, you will need to understand key concepts and also to be able to perform calculations to solve certain types of financial problems. It is very important to do homework outside of class, even though the assignments are not graded. An effective strategy would be:

1. For each week of the course, start by reading the assigned chapters of the textbook. Test your basic understanding of the concepts by reading each chapter summary.

2. Answer the practice questions and problems listed as homework in the recommended course schedule.

3. Use the online study guide and other learning resources on the textbook website to enhance and further test your understanding.

Solutions to the practice questions and problems for homework are provided. However, you will learn best if you first attempt to answer them on your own before checking the solutions. For additional practice, do more problems of the same type.

Professional Presentation of Written Work

All assignments submitted for this course should be of professional quality. The student should present each paper in a format that would be appropriate for submitting to upper management.

This course requires that you use the American Psychological Association (APA) style in preparing any written work where other sources are used. A recommended style guide is included in the “Required Text and Materials” section. Refer to this style guide for proper format, referencing methods, and bibliographic format. References should be cited for all facts, ideas, conclusions, and opinions not your own.

A proper title page should preface all written assignments, unless otherwise required. The title page should include: your name, the title of the paper, the name and number of the course, the date submitted, and the name of the instructor.

Your instructor may prefer you to submit your written assignments electronically. Hard copies of your work should be typed or word-processed on white 8½ by 11 inch paper and double spaced. Some assignments may require that your work be prepared on a computer spreadsheet.

When submitting hard copies, do not use binders or special covers. Staple your completed assignments in the upper-left hand corner. Your instructor may have different or additional requirements for the submission of written work.

Examinations

Examinations are closed book. You will be allowed to use one A4 page of notes in your own handwriting. Both sides of the page may be used. The page of notes must be turned in with your exam. You should have a financial calculator during exams.

The exam is three hours. You should be prepared to answer or solve multiple choice questions (conceptual and computational), short answer questions and longer essay questions, and problems. Your instructor will provide additional information about exam format and grading criteria. Grading criteria will be based on the learning objectives of the course.

When writing the exams, you should present all computations and label them clearly. For both problems and computational multiple-choice questions, partial credit may be earned based on well-labeled computations, even if the final answer is not correct. All work must be done on the exam pages provided unless your instructor requires that you write your answers on separate answer sheets. Test questions and answer sheets must be submitted to the proctor.

Scholastic Honesty

City University of Seattle expects each student to do his/her own work. The University has "zero tolerance" for cheating, plagiarism, unauthorized collaboration on assignments and papers, using "notes" during exams, submitting someone else's work as one's own, submitting work previously submitted for another course, or facilitating acts of academic dishonesty by others. The penalties are severe! A first offense can result in a zero grade for the course and suspension for one quarter; a second offense can result in a zero grade for the course and suspension for two or more quarters; a third offense can result in expulsion from the University. The Policy and Procedures may be found at http://www.vsm.sk/en/students/scholastic-honesty/policies-and-procedures/.

In addition to providing your work to the instructor for grading, you must also submit an electronic copy for the CU archives (unless the work is specifically exempted by the instructor). You will not receive a grade for particular work until and unless you submit this electronic copy. The procedure for submitting work to the archives is to upload it via the website http://www.vsm.sk/en/students/on-line-center/uploader/uploader.html. Files should include the cover page of the work with the student name, instructor name, course name and number, and date. File names should indicate the type of assignment, such as “researchpaper.doc”, “casestudy.doc” or “thesis.doc” (student name should not be a part of the file name because the system adds it). All files received into the archives are submitted to www.TurnItIn.com for plagiarism checking.

Recommended Course Schedule

The schedule of course activities and assignments is given below. If you find you are unable to complete the assignments as scheduled, contact your instructor. Your instructor may elect to adjust the outline to meet the unique needs of the class.

Homework abbreviations: Q = Questions; ST = Self-Test Problems; P = Problems

SessionTopics and Assignments

READINGS & HOMEWORK

1

May 23rd

Course Introduction

Financial Planning and Forecasting Financial Statements

Corporate Valuation, Value-Based Management, and Corporate Governance

Chapter 14

Q 14-1; P 14-5; P 14-9

Chapter 15

Q 15-1; P 15-1; P 15-2; P 15-4 ; P 15-6 ; P 15-7

2

May 24th

Capital Structure Decisions: The Basics

Capital Structure Decisions: Extensions

Distribution to Shareholders: Dividends and Repurchases

Chapter 16

Q 16-1; ST-1; P 16-2; P 16-4; P 16-5; P 16-7; P 16-10

Chapter 17

Q 17-1; ST-1; P 17-4 ; P 17-5; P 17-6; P 17-7 ; P 17-10

Chapter 18

Q 18-1; Q 18-2; P 18-1; P 18-5 ; P 18-6 ; P 18-10

3

May 30th

Initial Public Offerings, Investment Banking and Financial Restructuring

Lease financing

Hybrid Financing: Preferred Stock, Warrants, and Convertibles

Chapter 19

Q 19-1; P 19-1; P 19-2; P 19-3 ; P 19-4

Chapter 20

Q 20-1; Q 20-5 ; P 20-1; P 20-2; P 20-4

Chapter 21

Q 21-1; Q 21-2; Q 21-4; P 21-1; P 21-2; P 21-3 ; P 21-4 ; P 21-5

SessionTopics and Assignments

READINGS & HOMEWORK

4

May 31st

Working Capital Management

Derivatives and Risk Management

Bankruptcy, Reorganization, and Liquidation

Chapter 22

Q 22-1; P 22-1; P 22-6; P 22-8; P 22-11; P 22-13; P 22-14; P 22-16; P 22-17

Chapter 23

Q 23-1; ST-1; P 23-3; P 23-4; P 23-5

Chapter 24

Q 24-1; Q 24-2; P 24-1 ; P 24-2

5

Jun 13th

Mergers, LBOs, Divestitures, and Holding Companies

Multinational Financial Management

Chapter 25

Q 25-1; P 25-1; P 25-2; P 25-3; P 25-4; P 25-5

Chapter 26

Q 26-1; P 26-2; P 26-3; P 26-9; P 26-11 ; P 26-13 ; P 26-14

6

Jun 14th

Catch-up and Integration

Oral Presentations – Financial News Analysis

Friday,

Jun 19th

Final Examination (Chapters 14- 26)

Due: Case Study

MC 556 SYL Page 11 Eff: 05/09

_75164856.bin