BAF104: Advance Finance
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This is an advanced course in financial management that covers more complex aspects of financial decisions such as medium to long term investments, capital budgeting, debt versus equity financing, cost of capital, valuation, among others. These concepts are applied to both financial and non-financial enterprises.
MIRIAM COLLEGE
College of Business, Entrepreneurship and Accountancy
Business Administration Department
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COURSE OUTLINE
1st Semester, SY 2009-2010
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Instructor: L.B. Araneta
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Course Code: BAF-104
Course Title: Advanced Finance
Course Description: This is an advanced course in financial management that covers more complex aspects of financial decisions such as medium to long term investments, capital budgeting, debt versus equity financing, cost of capital, valuation, among others. These concepts are applied to both financial and non-financial enterprises.
Credit: 3.00
Prerequisite: Financial Management
Required Textbook: Any Financial Management/Finance Textbooks
Other Resource: Lecture Notes
References: Finance Journals.
Course Objectives: At the end of the course, the students are expected to have a thorough background on the topics, acquire knowledge on and understand how very important financial management decisions are critical to the operations and sustainability of these enterprises.
REQUIREMENTS: Project Paper (Approved topic in Finance)
Long Tests
Graded Recitation
Attendance
Final Exam
Course Content:
Wk
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No. of Hrs
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Topic
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Strategy/
Methodology
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Skills
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Values
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Student Output
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1
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0.5
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Discussion of the Course Requirements
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Open discussion
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Listening
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Discipline; respect
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Feedback
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1-2
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5.5
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Basic Financial Concepts
Refresher on Time Value of Money
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Lecture; recitation
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Listening; synthesis; critical thinking
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Discipline; respect; responsibility
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Feedback; recitation; critique
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3-5
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6
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Risk and Return
Ø Risk of a Single Asset
Ø Risk of Portfolio
Ø Correlation and Diversification
Ø CAPM
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Lecture; recitation
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Listening; synthesis; critical thinking
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Discipline; respect; responsibility
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Feedback; recitation; critique
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6-8
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8.5
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Valuation
Ø Bond
Ø Stock
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Lecture; recitation
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Listening; synthesis; critical thinking
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Discipline; respect; responsibility
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Feedback; recitation; critique
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9-10
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6
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Cost of Capital
Ø Overview
Ø Cost of Long-Term Debt
Ø Cost of Preferred Stock
Ø Cost of Common Stock
Ø Weighted Average Cost of Capital
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Lecture; recitation
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Listening; synthesis; critical thinking
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Discipline; respect; responsibility
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Feedback; recitation; critique
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11-13
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9
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Capital Budgeting
Ø The Capital Budgeting Decision Process
Ø Terminology
Ø NPV
Ø IRR
Ø Introduction to Risk in Capital Budgeting
Ø Behavioral Approaches to Risk
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Lecture; recitation
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Listening; synthesis; critical thinking
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Discipline; respect; responsibility
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Feedback; recitation; critique
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14-15
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6
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Leverage and Capital Structure
Ø The Firm’s Capital Structure
Ø EBIT-EPS Approach to Capital Structure
Ø Choosing the Optimal Capital Structure
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Lecture; recitation
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Listening; synthesis; critical thinking
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Discipline; respect; responsibility
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Feedback; recitation; critique
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16-17
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6
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Dividend Policy
Ø Dividend Fundamentals
Ø The Relevance of Dividend Policy
Ø Factors Affecting Dividend Policy
Ø Types of Dividend Policies
Ø Other Forms of Dividends
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Lecture; recitation
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Listening; synthesis; critical thinking
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Discipline; respect; responsibility
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Feedback; recitation; critique
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18
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2
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Final Exam
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Exam
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Acquired Learnings
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Academic honesty
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Final Exam
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EXPECTATIONS FROM STUDENT:
The student’s responsibility is to come to each class prepared. She is also expected to take all examinations on the dates schedule. She should read the assigned problems prior to class. She is expected to attend each class and participate actively in the discussions.
ACADEMIC DISHONESTY
All students are expected to be academically honest. Cheating, lying and other forms of unethical behavior will not be tolerated. Any student found guilty of cheating in examinations or plagiarism in submitted course requirements will receive an F or failure either in the course requirement or in the course. Plagiarism refers to the use of books, notes or other intellectual property without giving proper attribution to its author, or representing the work of another person as one’s own; Cheating refers to securing help in a test; copying tests, assignments, reports or term papers; collaborating with other students during an examination or in preparing academic work; signing another student’s name on an attendance sheet; or otherwise practicing scholastic dishonesty
GRADING: Class Participation 10%
Attendance 5%
Long Tests 30%
Project Paper 25%
Final Exam 30% *Passing Mark is 65%
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100%
CONSULTATION HOURS: Sat, 11:00 – 11:30 a.m., CAR 209