Syllabus – Spring Semester 2023, 3 credits
UWM, Lubar College of Business
Bus Am 351, Lec. 001 M&W 10 – 11:15 AM in Lubar Hall N126
Photo by Dick Marcus, taken in Anchorage Alaska, June 2018
INSTRUCTOR: Richard D. Marcus, Ph.D.is an Associate Professor of Finance and the Chair of the LSB Executive Committee. I prefer Dick to Richard. He/Him.
OFFICE: S430F in Lubar Hall. My mailbox is also on the fourth floor of Lubar Hall
OFFICE HOURS: Mondays and Wednesdays from 12:30 to 1:30 pm in Lubar Hall S430F and by appointment.
TELEPHONE: 414-510-7731 (best is my cell or text) or 414-251-6533 (office Microsoft Teams line which is less useful).
E-MAIL: marcus@uwm.edu/. When sending me an email about Finance 351, please write either “Business Scholars” or “Finance 351” in the subject line.
HOMEPAGE: https://sites.uwm.edu/marcus/
BUSINESS SCHOLARS: PRINCIPLES OF FINANCE 351: Fundamentals of financial management, analysis of financial statements, risk and return, debt/equity valuations, cost of capital, capital budgeting, capital structure, and dividend policies. Prerequistes: jr st; admis to Business Scholars Prog; Econ 103(P) & 104(P); Bus Adm 207(P) & 211(P).
TEXTBOOK and CONNECT FINANCE: The start date to get our electronic textbook and Connect assignments is Monday, January 9, 2023. Log onto Canvas and start the first assignment or SmartBook and you will be led to register for your electronic textbook FUNDAMENTALS OF CORPORATE FINANCE with SmartBook for just $85, which is quite a deal. There is a 3-minute video for understanding Canvas and McGraw-Hill Connect at: https://vimeo.com/showcase/5316669/video/281874940. The video talks of a “rental” and “purchase” price, but the $85 is the price. If after using the electronic version, you would like a loose-leaf paper version mailed to you, McGraw-Hill will do that for $60 more. The electronic version is printable as well. Or, if you go to e-Campus, you can buy the electronic AND loose-leaf for $170.78. They will give you a 16-digit code to access the electronic book, Connect and SmartBook as well as get a looseleaf paper copy that will be mailed to you in 2 days. If you want more help in signing up, see this one-page PDF called “Connect + Canvas Deep Integration” link or chat with Dick Marcus: Connect + Canvas Deep Integration Student Registration (6). NOTE: This is the same price as “Essentials of Corporate Finance,” used in Finance 350. Our book has 40% more pages (952 versus just 652), but we don’t read all of it. Whew.
REQUIRED MATERIAL FOR FINANCE 351: McGraw-Hill electronic textbook with SmartBook and Connect Assignments, Fundamentals of Corporate Finance by Ross, Westerfield, and Jordan. Also needed is a financial calculator or a cell phone version of one. See more on this below.
FINANCIAL CALCULATOR: You will need a financial calculator of your own choosing. My recommendation is Texas Instruments BAII Plus or the professional version. The textbook is designed for use of either HP-10B or TI BA II Plus Financial Calculators. Either the TI or HP is fine with me. Most APPS for smart phones include some financial calculator functions, but few of the free APPS have all that is needed for bond analysis, such as IRR and uneven cash flows. It is possible to purchase a BA II Plus App for $14.99 on iTunes. For even less, can use 10bii Financial Calculators for $5.99 from i-Tunes or Android, or Vicinno FinCalc Pro for $1.99 for i-Tunes and Android. If you plan on being a Finance or Accounting Major, I suggest that you get a physical (non-cell phone) calculator, as other classes will not permit use of a cell phone, but I do permit cell phones in my class. BYC means Bring Your Calculator!
EXAMINATION AND HOMEWORK WEIGHTS: There will be one midterm examination and one final. Each exam is worth 30% of the class. We will also have Connect Assignments and SmartBook Chapter Assignments that will constitute 40% of the points.
MIDTERM EXAM: The midterm for 351 is on Wednesday, March 1, 2023. This exam covers material from Chapter 1-11 and lecture material. The midterm has 100 points possible. The style of the exam is short essays completed in Blue Books, which I will provide.
SMARTBOOK ON CONNECT: There are 21 chapters we cover, with 21 SmartBook assignments worth 6 points each for 126 points. This will get you grounded in the textbook material. There are some additional points for two “field trips.” There is 4 points for doing an assignment in the Nicholas Finance lab on Wednesday, February 15 and there are 3 more points for awarded for attending the Harley Davidison field trip on Monday, March 6th. In all, 133 points, which makes up 40% of the maximum total of 333 points.
FINAL EXAM: The final for 351 on Monday, May 15, 2023 at 10am to noon. This exam covers primarily Chapters 12-21 and classroom material. The final has 100 points possible. The exam is also short essays written in Blue Books that I will provide.
GRADE DISTRIBUTION: Grades will be based on the total points earned on the midterm, final, SmartBook assignments, and attendance at two special events. There are no “extra credit” points available. Typically, students who amass points at (or above) the median score will be considered for earning an A or A-. Those who are in the lower half will be considered for B+ and B, however, it is possible to earn much lower grades for those who do not demonstrate an understanding of the key objectives of corporate finance. Both total points and percentage scores appear on Canvas when you click GRADES.
CLASSROOM POLICIES: UWM has long-standing policies on academic misconduct, sexual harassment, discrimination, adding, dropping, withdrawal, repeating classes, and changes of grade. These policies are available at: https://sites.uwm.edu/marcus/policies/.
SPECIAL NEEDS: If anyone has a need for note-taking or testing assistance, please feel free to discuss this with me early in the semester. Slide presentations are available weekly in class and will also be available on Canvas.
SUPPLEMENTAL INSTRUCTION: Panther Academic Support Services (PASS) offers Supplemental Instruction (SI) review sessions for Principles of Finance. We have an excellent SI Leader, Andrew (“Drew”) Skyberg to offer guidance 4 hours per week on the second floor of Lubar Hall. Drew Skyberg skyberg@uwm.edu will have hours listed per week on Canvas. His focus is on the larger sections of Finance 350, but many of the same topics also are found in Finance 351 for Business Scholars. We are fortunate to have Drew’s assistance, if you wish to ask a fellow student who did very well in my class before.
SOCIAL CONNECTIVITY: Financial announcements of stock splits, leverage buyouts, and dividend changes occur daily. Some will be highlighted for special attention. These can appear on our class’ Facebook page, and if important, will be noted in class. Students will be invited to like a fan page that will be used for both 350 students and 351 students called UWMFinance350. The link to UWMFinance350 is given in Canvas. You do not have to join Facebook to look at our page. I also have a LinkedIn site with over 100 articles on finance, economics, and business that I write (usually tightly fixed to three paragraphs only). The QR for my LinkedIn page is:
OUR OBJECTIVE: To understand the everyday financial activities of collecting from customers and paying suppliers, finding long-term financing to pay for investments, and deciding which investments offer the greatest promise. These are issues sometimes called Financial Management, but are part of the duties of a financial manager. Financial managers who do these tasks well reduce the risk of financial distress and increase the opportunities for growth and profits.
WEEK 1: Do SmartBook Chapters 1 and 2.
Lecture #1 on Monday, January 23: Chapter 1- Introduction to Corporate Finance
Lecture #2 is on Wednesday, January 25: Chapter 2 – Financial Statements, Taxes, and Cash Flows.
WEEK 2: Do SmartBook Chapters 3 and 4.
Lecture #3 on Monday, January 30: Chapter 3 – Working with Financial Statements (with an emphasis on Ratio Analysis).
Lecture #4 on Wednesday, February 2: Chapter 4 – Long-Term Financial Planning and Growth.
WEEK 3: Do SmartBook Chapters 5 and 6.
Lecture #5 on Monday, February 6: Chapter 5 – Introduction to Valuation
Lecture #6 on Wednesday, February 7: d Chapter 6 – Discounted Cash Flow Valuation.
WEEK 4: Do SmartBook Chapter 8. Yeah, it is on stocks!
Lecture #7 on Monday, February 13: Chapter 8 – Stock Valuation (with an emphasis on the dividend discount model).
Lecture/class trip to the Nicholas Lab #8 on Wednesday, February 15 is a Field Trip to the Nicholas Finance Lab in Lubar Hall to use FactSet.
WEEK 5: Do SmartBook Chapters 7 and 9.
Lecture #9 on Monday, February 20: Chapter 7 – Interest Rates and Bond Valuation
Lecture #10 on Wednesday, February 22: Chapter 9 – Net Present Value and Other Investment Criteria
WEEK 6: Do SmartBook Chapter 10 and Midterm on Wednesday, March 2.
Lecture #11 on Monday, February 27: Chapter 10 – Making Capital Investment Decisions and also a review for Midterm 1. A list of some key formulas will be handed out and will be attached to the midterm given on March 1.
MIDTERM on WEDNESDAY, MARCH 1 is our Blue Book Short Essay Midterm, which covers Chapters 1 – 10 and lecture material.
WEEK 7: Harley Trip and Discussion with Alice Wycklendt
Class trip to the Harley-Davidson Museum. MONDAY, March 6, UWM buses will take us the Harley-Davison Museum, departing at about 9:20AM. We will leave the Museum at 11:30 to 11:45 AM and be back on campus by noon. The University will provide transportation to the event and back at the end of the meeting to our Lubar Hall central driveway.
Lecture #14 on Wednesday, March 8: Alice Wycklendt, an investment analyst at RW Baird, will discuss her analysis of HOG and other recreational vehicle stocks and what goes into being an investment analyst.
WEEK 8: Do SmartBook Chapters 12 and 13
Lecture #15, Monday, March 13: Chapter 12 – Some Lessons from Capital Market History.
Lecture #16 on Wednesday, March 15: Chapter 13 – Return, Risk, and the Security Market Line.
SPRING BREAK! — March 19 – 26
WEEK 9: Do SmartBook Chapter 11 and Chapter 14
Lecture #17 on Monday, March 27: Chapter 11 – Project Analysis and Evaluation
Lecture #18 on Wednesday, March 29: Chapter 14 – The Cost of Capital.
WEEK 10: Do SmartBook Chapters 15 and 16
Lecture #19 on Monday, April 3: Chapter 15 – Raising Capital.
Lecture #20 on Wednesday, April 5: Chapter 16 – Financial Leverage and Capital Structure Policy.
WEEK 11: Do SmartBook Chapters 17 and 18
Lecture #21 on Monday, April 10: Chapter 17 – Dividends and Dividend Policy.
Lecture #22 on Wednesday, April 12: Chapter 18 – Short-Term Finance and Planning. Homework #8 is due today, April 11.
WEEK 12: Do SmartBook Chapters 19 and 20
Lecture #23 on Monday, April 17: Chapter 19 – Cash and Liquidity Management (skip Appendix 20A on credit policy).
Lecture #24 on Wednesday, April 19: Chapter 20 – Credit and Inventory Management.
WEEK 13: Do SmartBook Chapter 21
Lecture #25 on Monday, April 24: Chapter 21: International Corporate Finance. Start Homework #10.
Lecture #26 on Wednesday, April 26: Time Diversification and the Declining Value of International Diversification in a Global Economy
WEEK 14: No chapter assignments as this material is base on lectures
Lecture #27 on Monday, May 1: Basics of Event Studies in Finance.
Lecture #28 on Wednesday, May 3: Management Buyouts (MBOs), Corporate Governance, and Business Ethics.
WEEK 15: No chapter assignments, just lecture notes
Lecture #29 on Monday, May 8: Leveraged Buyouts (LBOs) and Merger Waves
Lecture #30 on Wednesday, May 10: Review for the final. Primarily Chapters 11-21 and classroom material. A list of key formulas will be distributed and will be attached to the final. The final is short essays completed in a Blue Book.
Friday, May 12: This is the University Study Day – No classes.
Finals Week is May 13, and May 15-20.
Final Exam on MONDAY, May 15, 2023 at 10am – noon. Yup, it is our regular class time so it will be easy to remember. It will be in our classroom. Scores and grade distributions will be posted on Canvas.