Principles of Finance I
Required Text
Brigham, E. F. (2017). Financial management: Theory and practice. (15 ed.). Cengage.
ISBN: 9781305632295
Course Description
This intermediate course examines the role of the financial manager in the overall management and control of a firm. Stress is placed on the use of analytical models for improving the decisionmaking process. Both the short-term management of working capital and the long-term planning of capital structure and investment strategy are covered. Topics include financial ratio analysis, the time value of money, valuation of stocks and bonds, free cash flows, capital budgeting and the cost of capital.
Course Objectives
Identify the key activities of the financial manager
Evaluate the key characteristics of bonds
Discuss the relationship between debt and financial leverage, and discuss the ratios used to analyze a firms debt
Evaluate a companys cost of capital for various projects
Evaluate the firms statement of cash flows, operating cash flow, and free cash flow
Explain the capital structure of an organization and its importance to the organization
Discuss the options for public and private financing
Discuss the general approach to analyzing capital structure
Credit Hours: 3 Prerequisites: GU299 and MA215
Testing
This is a proctored course. Distance Education Accrediting Commission (DEAC) requires validation that the student who takes an assessment is the same person who enrolled in the program and that the examination results will reflect the students own knowledge and competence in accordance with stated learning outcomes. (Retrieved February 23, 2021 from The DEAC Accreditation Handbook, page 92). Grantham University utilizes the services of ProctorU to meet this requirement.
Proctored Exam Information:
This course includes a proctored exam. You must register to take your exam using this link. You may register for and schedule your exam at any time after the course start date. To take the proctored exam you must:
Have a webcam
Provide valid picture ID to the proctor before the exam starts
Use a computer that will allow a live proctor from ProctorU (a third party) to temporarily take control of your computer
Test must be scheduled at least 72 hours prior to the time you plan on completing the exam or there will be a fee paid directly to ProctorU (credit card or debit card only)
Take the exam in a room with no other people, distractions, or interferences
Review these three links: ProctorU Getting Started, ProctorU How it Works, Exam Rules
*If you do not attempt the Proctored Exam, you will be unable to access assignments and exams for all weeks following the Proctored Exam, essentially resulting in a failing grade for the course. In order to unlock assignments and exams in future weeks, schedule and complete your Proctored Exam in a timely manner.*
NOTE: The Proctored Exam for this course is in Week 5.
Tentative Course Schedule
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Course Week |
Weekly Content |
|
Week 1 |
READ Chapter 1: An Overview of Financial Management and the Financial Environment Chapter 2: Financial Statements: Cash Flow and Taxes Chapter 3: Analysis of Financial Statements REVIEW The Foundations of Financial Management After You Have Read the Assigned Chapters Self Check COMPLETE |
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Course Week |
Weekly Content |
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Discussion Question #1: Goal of the Firm Discussion Question #2: Managerial Finance relates to Economics and Accounting Assignment: Mini-case on page 55-56 of textbook |
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Week 2 |
READ Chapter 4: Time Value of Money Chapter 5: Bonds, Bond Valuation, and Interest Rates REVIEW The Financial Market Environment After You Have Read the Assigned Chapters Self Check COMPLETE Discussion Question #1: Financial institutions and financial markets Discussion Question #2: The 2008 financial crisis Assignment: Questions 1-5 in Chapter 4; also Questions 1-5 in Chapter 5 |
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Week 3 |
READ Chapter 6: Risk and Return Chapter 7: Corporate Valuation and Stock Valuation Chapter 8: Financial Options and Applications in Corporate Finance REVIEW Risk Analysis and Financial Strength After You Have Read the Assigned Chapters Self Check COMPLETE Discussion Question #1: Debt and Financial Leverage Discussion Question #2: Ratio Analysis Assignment: Definitions from Chapter 6 |
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Week 4 |
READ Chapter 9: The Cost of Capital Chapter 10: The Basics of Capital Budgeting: Evaluating Cash Flows Chapter 11: Cash Flow Estimation and Risk Analysis REVIEW Cash Flow and Cash Planning Self Check COMPLETE Discussion Question #1: Pro Forma Statements (explain judgmental approach) |
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Course Week |
Weekly Content |
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Discussion Question #2: Pro Forma Statements (evaluate simplied approach) Assignment:Chapter 9 Mini-case (page 411) Complete questions A, B, C, D. |
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Week 5 |
READ Chapter 12: Corporate Valuation and Financial Planning Chapter 13: Corporate Governance REVIEW Time Value of Money Self Check COMPLETE Discussion Question #1: Time Value of Money and Patterns of Cash FLow Discussion Question #2: Self Supporting Growth Rate and AFN equation Assignment: Fraud Cases that involve Agency Conflicts Proctored Exam |
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Week 6 |
READ Chapter 14: Distributions to Shareholders: Dividends and Repurchases Chapter 15: Capital Structure Decisions REVIEW Three theories Explain Yield Curve Interest Rates and Required Returns Self Check COMPLETE Discussion Question #1: Interest Rate Risk Discussion Question #2: Share Price Maximization Goals Assignment:Chapter 14, questions 3, 4, 5 on page 600; and Chapter 15, questions 1-5 on page 647. |
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Week 7 |
READ Chapter 18: Public and Private Financing: Initial Offerings, Seasoned Offerings, and Investment Banks Chapter 20: Hybrid Financing: Preferred Stock, Warrants,a nd Convertibles REVIEW Debt and equity capital Share Price |
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Course Week |
Weekly Content |
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Self Check COMPLETE Discussion Question #1: Debt and equity Discussion Question #2: Issuing Common Stock Assignment: Chaper 18 Mini-case on page 788. Complete questions A, B, C, and D. |
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Week 8 |
READ Chapter 21: Dynamic Capital Structures and Corporate Valuation COMPLETE Discussion Question #1: Market Efficiency and Stock Valuation Discussion Question #2: Financial Decisions, Return, Risk, and Firm's Value Assignment: Chapter 21, questions 1 and 2 on page 868; Complete the Mini-case on page 871, parts A through E |
Grading Policy
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Grading Category |
Grade Weight |
|
Discussions |
30% |
|
Assignments |
40% |
|
Final |
20% |
|
Proctored Exam |
10% |
Estimated Student Workload
The following table outlines the academic effort required by students to become successful in this course. While the times in the table are hourly approximations, it is presented to help students with their time management. Please note, depending on the students background knowledge and experience of the course subject, and an individual students academic capabilities, these times will vary.
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Course Week |
Activity and Time Required |
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Week 1 |
Reading/Watching: 2.3 Discussion: 4.0 Homework: 13.0 Total Time Estimated: 19.3 |
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Week 2 |
Reading/Watching: 1.6 Discussion: 4.0 Homework: 10.0 Total Time Estimated: 15.6 |
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Course Week |
Activity and Time Required |
|
Week 3 |
Reading/Watching: 2.3 Discussion: 4.0 Homework: 5.0 Total Time Estimated: 11.3 |
|
Week 4 |
Reading/Watching: 2.3 Discussion: 4.0 Homework: 13.0 Total Time Estimated: 19.3 |
|
Week 5 |
Reading/Watching: 1.5 Discussion: 4.0 Homework: 18.0 Total Time Estimated: 23.5 |
|
Week 6 |
Reading/Watching: 1.6 Discussion: 4.0 Homework: 10.0 Total Time Estimated: 15.6 |
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Week 7 |
Reading/Watching: 1.6 Discussion: 4.0 Homework: 13.0 Total Time Estimated: 18.6 |
|
Week 8 |
Reading/Watching: 0.7 Discussion: 4.0 Homework: 14.0 Total Time Estimated: 18.7 |