Syllabus Fall 2014

BUAD 306: Business FinanceSyllabus–Fall 2014This course is co-taught by Professors Ahern and Frydman. Prof. Frydman teaches thefirst half of the course and Prof. Ahernteaches the second half of the course. During thefirst half of the course, Prof. Frydman handles all student interactions. During the secondhalf, Prof. Ahern handles all student interactions. There are two teaching assistants thatwill be available during the entire semester.Professor: Kenneth AhernOffice:HOH 718Office Hours: Tuesday & Thursday2:30 pmʹ4:00 pmOffice ail:kenneth.ahern@marshall.usc.eduCary FrydmanHOH 705Tues. & Thurs. frydman@marshall.usc.eduTA:Ben RosengartOffice Hours: Wednesday 12:00 pmʹ2:00 pmLocation:Hoffman Hall Lower LevelEmail:buad306@marshall.usc.eduJeremy ShenTuesday 12:00 pmʹ2:00 pmHoffman HallLower Levelbuad306@marshall.usc.eduLocation and Meeting TTh14790TThTimes8:00 amʹ 9:50 am10:00 amʹ11:50 am2:00 pmʹ 3:50 pm10:00 amʹ11:50 am12:00 pmʹ 1:50 pm4:00 pmʹ 5:50 pmLocationHOH 1HOH 1HOH 1HOH 2HOH 2HOH 2Course DescriptionBUAD 306is a fundamentals course businessinfinance. Finance is a way of thinkingabout economicproblems that involveuncertainty over time. This course is designed toprovide an introductory framework for understanding how financiers think, how theybreak down components of a financial problem, and how they make decisions asinvestors andcorporations in the financial market. By the end of the semester, youshould be familiar with financial vocabulary, understand aspects of financial theory,develop skills in financial computation, and appreciate the underlying financial mindset aswell asincentives involved when solving problems of finance. You will learn how todetermine risk, how to make decisions, and how to value an investment as a potentialfinancial opportunity.1

Course Learning ObjectivesThrough lecture, case analysis, worked samples, and by learning to apply appropriatemathematical and financial formulas and functions, you will be able to:1. Understand basic types, goals, and implications of financial management and therole of the financial decision-maker.2. Interpret financial statements and how they influence long-term planning andgrowth.3. Understand the meaning oftime value of moneyand how to evaluate the tradeoff between dollars today and dollars sometime in the future.4. Understand how firms decide to commit capital andits impact on cash flow(discounted cash flow).5. Understand interest rates and bonds and realize how interest rates impact bonds.6. Understand the different criteria used to evaluate proposed investments (e.g., netpresent value (NPV), profitability index,aybackpperiod).7. Determine the cost of capital, and understand and apply the concepts of theweighted cost of capital(WACC).8. Recognize and understand the elements of optimal capital structure, the effects offinancial leverage, bankruptcy, and the roletaxes.of9. Understand the dynamics of behavioral finance and its influence on individual andcorporate financial decision-making (e.g., the impact of heuristics).10. Understand derivatives, oroptions, in the context of corporate finance.These course level objectives align with selected Marshall Program Learning Goals.Please see table in Appendix for specifics.Required Materialsx Fundamentals of Corporate Finance, Tenth (Alternate) Editionby Ross, Westerfieldand Jordan.x Calculator with financialfunctions. We will teach from the Texas Instruments BA IIPlus Professional. Other calculators are similar, such as the BA II Plus, the HewlettPackard 17bII , andHewlett Packard 10bII. Many graphical calculators, such asthe TI-83, have built-in financial functions.,ŽǁĞǀĞƌ͕ ŝƚ ŝƐ ƚŚĞ ƐƚƵĚĞresponsibility to learn the functions of their particularcalculators. You shouldbring your calculator to all classes and exams.You will be extremelydisadvantaged if you do not have your calculator duringxams.e During exams youwill not be allowed to use cellphone calculators, computers, or any other devicethat can communicate to other devices, so learning how to use the financialcalculator is essential for success in the class.Prerequisites: ACCT410, BUAD 250a, BUAD 280 or BUAD 305.Course Notes:Copies of lecture slides and other class information are available throughyour Blackboard account.2

Grading Summary:AssignmentsExam1Exam2Exam3Exam 4% of Grade23%23%23%23%Homework(1% for each of 8 homework assignments)TOTAL8%100%Final grades represent how you perform in the class relative to other students. Yourgrade will not be based on a mandated target, but on your performance.Historically,theaverage grade for this classis about a(B). Three items are considered whenassigningfinal grades:1. Your average weighted score as a percentage of the available points for allassignments (the points you receive divided by the number of points possible).2. The overall average percentage score within the class.3. Yourranking among all students in the class.Assignments and Grading DetailYour grade is made up of the following categories:1. Exams. All examsare closed book, closed notes. Financial calculators are allowedand recommended, but-devicesE(cell phones,PDAs,-Phones,IBlackberries, othertexting devices, laptops,-pods,ietc.) are not allowed.You will be provided withany relevant equations (and some irrelevant ones). All exams will use theScantron multiple choice format. Students must provide theirown pencils.Students must take the exam in the lecture section in which they are registered.All four exams are 80 minute-timed exams held during regular class meetingtimes and in the regular class location. Therefore, there are no conflicts of examtimes with any other course at USC.Exam Absence PolicyStudents are required to be present for all four exams. If you are note toabltakethe exams on the dates and times specified in the detailed schedule, you shouldnot take this class.There will be no make-up exams. However, there are legitimate reasons formissing an exam. If you provide documentation of serious medicalroblemsp orcrime incidents for missing a midterm exam, the other exam scores will-be reweighted to accommodate the missing score. However, if you miss more than oneexam, we will be unable to assign a complete grade to you.3

2. Assignments.The homework rgade will be assessed over8 assignments, each dueat 11:59pm on the date listed in the schedule below.Assignments must besubmitted electronically via Blackboard.Assignmentswill be given a grade of͞ĐƌĞĚŝƚ͟ Žƌ ͞ŶŽ ĐƌĞĚŝƚ͘͟ ,ŽŵĞǁŽƌŬ ǁŝůů ďĞ ĂƐƐĂ ͞Đredit͟ ŝĨ ĂŶĚ ŽŶůLJ ŝĨ assignment is reasonably complete and correct.Working in groups is encouraged,but each group member must turn in his or her own separate write-up. Identicalor nearly identicalĂŶƐǁĞƌƐ ǁŝůů ƌĞƐƵůƚ ŝŶ ͞ŶŽ ĐƌĞĚŝƚ͟arties. Solutions setswill be posted on the class Blackboard site.Assignment Submission PolicyAssignments must be turned in on the due date/time electronically viaBlackboard. Any assignment turned in late, even if by only a few minutes, willreceiveno credit.Homework will not be returned.Please keep a copy of your homework forreference. Homework assignments are kept in electronic storage in case they areneeded for re-grades or grade disputes. Answers to the homework will be postedonline for students to evaluate their performance.Technology PolicyPersonal computers and wireless Interneƚ ĂƌĞ Ă ŬĞLJ ƉĂƌƚ ŽĨ ƚŽĚĂLJ͛Ɛ but they also can distract you from the class discussion and dampen participation. Youmay bring your laptops/iPads etc. to class for note-taking, but please refrain frombrowsing the internet, updatingoury Facebook profile, playing games, instant messaging,shopping, etc. Although you may think you are being discreet, 90% of th time studentsengaging in such behavior give themselves away (through inappropriate facialexpressions, lack of eye contact,out of sync typing, etc.). Use of computer in theclassroom is a privilege. If you abuse this privilege, laptops may be banned from theclassroom.Teaching AssistantsThe teaching assistants are listed at the top of the syllabus. The sTAwill hold regularoffice hours and can answers questions on the material during office hours or via email.TutoringTutoring is offered through the Marshall Office of Undergraduate Advising as asupplement to classroom instruction. Tutors are able tosistasstudents in understandingdifficult concepts, but tutoring sessions are only effective if students regularly attend classand actively engage in the process of thinking critically about the course content. Formore information on tutoring, visit the Marshall Office of Undergraduate Advising in-BRI104 (213-740-0690),or g/.MARSHALLGUIDELINES4

Add/Drop ProcessThis class will remainopen enrollment (R-clearance) for the first three weeks of thesemester. If there is an openseat, students will be freely able to add a class using WebRegistration throughout the first three weeks of the term. If the class is full, students willneed to continue checking Web Registration to see if a seat becomes available. There areno wait lists and the professor cannot add students. See USC guidelines private/pdf/2012 2013/academic policies 12.pdfx Waitlist. There are no centralized wait lists for Marshall undergraduate courses.Although there are no wait lists, the Undergraduate Advising eOfficprovides asystem by which students can indicate their interest in enrolling in classes that arecurrently full in order to track demand and manage classroom space effectively.x Dropping Students. The professor may drop any student who, without priorconsent, does not attend the first two class sessions. The instructor is notrequired to notify the student that s/he is being dropped.Statement for Students with DisabilitiesAny student requesting academic accommodations based on a disabilityrequiredis toregister with Disability Services and Programs (DSP) each semester. A letter of verificationfor approved accommodations can be obtained from DSP. Pleaserebethesuletter isdelivered to Prof. Frydmanby Thursday September 11. DSP is locatedin STU 301 and isopen 8:30 a.m.ʹ5:00 p.m., Monday through Friday. The phone number for DSP is (213)740-0776. For more information visitwww.usc.edu/disability.Statement on Academic IntegrityUSC seeks tomaintain an optimal learning environment. General principles of academichonesty include the concept of respect for the intellectual property of others, theexpectation that individual work will be submitted unless otherwise allowed by aninstructor, andƚŚĞ ŽďůŝŐĂƚŝŽŶƐ ďŽƚŚ ƚŽ ƉƌŽƚĞĐƚ ŽŶĞ͛Ɛ ŽƚŚĞƌƐ ĂƐ ǁĞůů ĂƐ ƚŽ ĂǀŽŝĚ ƵƐŝŶŐ ĂŶŽƚŚĞƌ͛Ɛ ǁunderstand and abide by these principles. SCampus, the Student Guidebook, contains theStudent Conduct Code in Section 11.00, while the recommended sanctions are located inAppendix /Students will be referred to the Office of Student Judicial Affairs and CommunityStandards for further review, should there be any suspicion of academic dishonesty. TheReview process can be found e toadhere to the academic conduct standards set forth by these guidelines and ourprograms will not be tolerated by the USC Marshall community and can lead to dismissal.Emergency Preparedness/CourseContinuityIn case of emergency, and travel to campus is difficult, USC executive leadership willannounce an electronic way for instructors to teach students in their residence halls orhomes using a combination of Blackboard, teleconferencing, and othertechnologies.Instructors should be prepared to assign students a "Plan B" project that can becompleted at a distance. For additional information about maintaining your classes in an5