University of Wisconsin – Milwaukee
Our upward climb in financial knowledge.
INSTRUCTOR: Richard D. Marcus, Ph.D.is an Associate Professor of Finance and Managerial Economics and the Chair of the Lubar Executive Committee. I typically prefer Dick to Richard, but of course Hey-Prof, or Hey-You works too. (Pronouns he/his/him)
OFFICE: S430F in Lubar Hall. My mailbox is also on the fourth floor of Lubar Hall. I come most days, but best it to see me on Tuesdays and Thursdays.
MY TELEPHONE and OFFICE HOURS: 414-510-7731 (my cell for calls or text messages, but if you text, say FINANCE 350 in the message please). I also have a hard-to-use Teams phone number of 414-251-6533, but I seldom find it useful. My regular office hours are Thursdays 11:30am – 12:30pm in Office S430F and other times by appointment.
TEACHING ASSISTANTS: Our TA’s are experienced in finance. Both are graduate students in business: They are Sayeda Shefa at ssshefa@uwm.edu (414-739-8426) and Md Samiul Islam mdsamiul@uwm.edu (414-712-3710). They are both upbeat, friendly, and natural teachers.
- Samiul will lead discussions 601-605 in S231 on Fridays. His office hours are THURSDAYS at 11:30am-1:30pm in S445. They share S445 in Lubar Hall.
- Sayeda will lead discussions 606-610 in S233. Her office hours are TUESDAYS at 1:30-3:30pm in S445.
- Samiul and Sayeda share S445 in Lubar Hall.
LOCATION OF DISCUSSION SECTIONS: Discussion Sections:
- Discussion Sections 601 – 605 with Samiul will meet in Lubar Hall S231.
- Discussion Sections 606 – 610 with Sayedu will meet in Lubar Hall S233.
MY EMAIL: marcus@uwm.edu. When sending me an email about Finance 350, please write “Finance 350 Lecture 401 or 402 or 10:30 AM or 12:30PM” in the subject line, which will help me locate you.
MY HOMEPAGE: https://sites.uwm.edu/marcus
PRINCIPLES OF FINANCE 350: Examines the fundamentals of financial management, asset/liability valuations, risk and return, investment analysis, sources and uses of funds, cost of capital, and cash management. Prerequisites are soph st; Econ 103(P) & 104(P); Bus Adm 201(P) or 207(P); Bus Adm 210(P) or 211(P).
REQUIRED MATERIAL FOR FINANCE 350: McGraw-Hill electronic textbook with SmartBook and Connect Assignments, 11th Edition, Essentials of Corporate Finance (copywrite 2023) by Ross, Westerfield, and Jordan. Also needed is a financial calculator. See more on this below.
TEXTBOOK and CONNECT FINANCE: The start date to get our electronic textbook and Connect assignments is Friday, August 19. To register for your electronic textbook Essentials of Corporate Finance with SmartBook and Assignments for just $85, which is fifteen dollars lower than last year. The best way to get registered is to go to our Canvas site and click one of the two assignments for Chapter 1 (SmartBook or Assignment #1). This will let you to register for our electronic book, SmartBook, and Assignments.
REGISTERING FOR CONNECT: There is a 3-minute video for understanding Canvas and McGraw-Hill Connect at: https://vimeo.com/showcase/5316669/video/281874940 and also a link to it in Canvas. 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 $39 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 or your TAs: Connect + Canvas Deep Integration Student Registration (6) . Or you could also read McGraw-Hill’s one page: Syllabus Language for Bus Adm 350
FINANCE CONNECT ASSIGNMENTS: There are two types of assignments. SmartBook has you work through a chapter in 20 minutes. There are 14 SmartBook chapters and 140 points possible. The second type are multiple choice style quizzes, called Assignments. There are 14 graded assignments Each of the assignments is worth 5 points each for 14 assignments, for a total of 70 points. The questions are algorithmic so that each student gets different numbers for most problems. The assignments have unlimited number of attempts to retake up to the due dates listed in the “Daily Schedule of Lectures, Discussion Sections, and Connect Assignments” appearing below. There is no penalty for retaking the assignment. I permit (and encourage you) to print assignments for exam practice problems, but you must enter your answers on the website.
SUPPORT AND TIPS FOR CONNECT: If you have any issues while registering or using Connect, please contact the Care Team for McGraw-Hill through http://www.mhhe.com/support. They have a good team for a chat session, or you may call them at 1-800-331-5094. Our course examines Chapters 1-14. To avoid problems related to unexpected technical issues, you are advised not to wait until the last moment to complete assignments.
FINANCIAL CALCULATOR OPTIONS AND PERMISSION TO USE CELL PHONE VERSIONS FOR OUR CLASS: 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. Accounting classes tend to like the TI BA II Plus. There are some free apps that work with ads: Android has BA Calc (https://play.google.com/store/apps/details?id=com.cfa.calculator&hl=en_US ). Apple has one that charges $1.99 BA Plus Calculator ( https://apps.apple.com/us/app/ba-plus-calculator/id1510190657). Be aware that while many 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 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!
ROSS, WESTERFIELD, and JORDAN’s FINANCE BLOG: What does the recent corporate tax rate do to leverage of firms? What does it do to stock prices? What are “Black Rhino” Bond? Our authors have a semi-active blog: http://essentialsofcorporatefinance.blogspot.com/
470 POINTS FOR MIDTERMS, FINALS, HOMEWORK ASSIGNMENTS, and SMARTBOOK: There will be two midterm examinations and one final. Each midterm exam (of 40 questions) is worth 80 points each. The Final is worth 100 points (50 questions, but we have 2 hours). We will also have 14 homework multiple choice assignments of 5 points each that will constitute 70 points that are completed on Connect Finance from McGraw-Hill. There is a SmartBook for each chapter on Connect Finance is worth 10 points each or 140 points. The total possible points are 470 = 80+80+100+70+140. Scores will be posted on Canvas.
MIDTERM EXAM DATES: The midterms for 350 are during our assigned time class periods HELD ON CAMPUS. If you need a different time, this can be arranged in advance. Contact Prof Marcus via my email. The first midterm is on Tuesday, October 4 in our classroom N146 at our assigned class times for Chapters 1-5 for 40 questions (80 points). The second midterm is on Thursday, November 10 in our classroom at your assigned times, which covers Chapters 6-10 for 40 questions (80 points) in our classroom N146. The final covers Chapters 11-14. 50 questions in 2 hours and 100 points, which is HELD ON CAMPUS. I provide list of key financial formulas for taking both midterms and the final. Students will need their financial calculator or cell-phone apps for these exams.
FINAL EXAM: 350 Finance Lecture 401 is on TUESDAY, December 20 at 8 P.M. to 10 P.M. This is a Joint Final with both lectures 404 and 405, HELD ON CAMPUS. The rooms are not set yet set. The final covers Chapters 11-14 for 50 questions, which amounts to 100 possible in the course. The final has more time available, permitting a slightly longer exam than the midterms.
SUPPLEMENTAL INSTRUCTION: Panther Academic Support Services (PASS) offers Supplemental Instruction (SI) review sessions for this course. Reid Pezewski (pezewsk7@uwm.edu) is our S.I. leader this year. Reid knows finance and is a great teacher. He will let us know what hours and days are best for assisting you and will also be attending the morning class. Likely he will have several fixed hours during the week to work with you at Lubar Hall N243 and will pass out bookmarks with his hours in the second week of classes. For more on Supplemental Instruction go to: https://uwm.edu/studentsuccess/tutoring-and-supplemental-instruction/si-2/
COURSE GRADES: Grades will be assigned by points for both midterms and the final as clues to how you will be graded in the course. Each of these exams do not use fixed percentage correct levels as the exams vary in difficulty. I use the mean of the total points or points on a specific test. Those who are at the mean or higher receive a B or better, with approximately equal groups of A, A-, B+, and B grades. Those who are below the mean receive B-, C+, C, and a few C- grades. Note that I use the total number of points (470), which includes 280 points from three exams and 190 points from Connect assignments and SmartBook chapters.
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 notetaking or testing assistance, please feel free to discuss this with me early in the semester. Slide presentations are available weekly in class and will be available on Canvas. The class meetings will also be recorded and shared via Canvas.
SOCIAL CONNECTIVITY: Financial announcements of stock splits, leverage buyouts, and dividend changes occur daily. Some will be highlighted for special attention both in class and on Facebook. Students will be invited to “like” a fan page for Professor Marcus’ 350 class. It is called UWMFinance350. You can look at messages by clicking Facebook link on Canvas whether or not you have a Facebook Account. Or you may click the like “thumps up” icon in Facebook to have it appear on your cell phone or computer. I am also relatively active on LinkedIn at: https://www.linkedin.com/in/dick-marcus-8176251/detail/recent-activity/shares/ I also post a LinkedIn article I write on UWMFinance350. You are invited to be a follower of that page as well.
UNIVERSITY POLICIES: Policies on issues of religious observance, military service, sexual abuse, misconduct, grade appeals, and other matters are at: https://uwm.edu/secu/wp-content/uploads/sites/122/2016/12/Syllabus-Links.pdf
Panther Community Health and Safety Standards: UWM has implemented reasonable health and safety protocols, taking into account recommendations by local, state and national public health authorities, in response to the COVID-19 pandemic. As a member of our campus community, you are expected to abide by the Panther Interim COVID-Related Health & Safety Rules, which were developed in accordance with public health guidelines. These standards apply to anyone who is physically present on campus, UWM grounds, or participating in a UWM-sponsored activity:
• All individuals visiting UWM facilities must wear face coverings while indoors;
• Unvaccinated students coming to campus are required to test weekly for COVID-19;
• You should check daily for COVID-19 symptoms and not come to campus if you are feeling sick.
Additional details about student and staff expectations can be found on the UWM COVID-19 webpage.
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 they are 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.
Schedule of Lectures, Discussions, & Connect Assignments
WEEK 1: Lecture #1 on Tuesday, September 6: Chapter 1– Introduction to Financial Management
Lecture #2 is on Thursday, September 8: Chapter 2 – Financial Statements, Taxes, and Cash Flows.
Discussion Session #1: Friday, September 9: Meet your TA. They will demonstrate using Connect Finance assignments, SmartBooks for studying chapters, and discuss class links to Facebook for UWMFinance350. They will also work with you to do textbook problems 1.3, 1.5, 1.6 and 1.15 on Sarbanes-Oxley and the costs of “going dark,” as private firm (pp. 20 – 21 in the electronic or paper textbook).
Saturday, September 10: This is the day of the Full Moon on September 10, often called “the Harvest Moon,” so watch out for werewolves. See my LinkedIn comments on the Werewolf Effect on Investing https://www.linkedin.com/pulse/chain-your-inner-werewolf-avoid-massive-investment-moves-dick-marcus/
WEEK 2: Lecture #3 on Tuesday, September 13: Chapter 2 (continued) – CFFA or Cash Flow From Assets
Lecture #4 on Thursday, September 15: Chapter 3 – Working with Financial Statements (with emphasis on ratio analysis).
Discussion 2: Friday, September 16: OCF and CFFA problems (especially question 2.2 on page 44, and 2.3 and 2.9 on page 45, and Bleyk Paving question 17 on page 47, and Cabo Wabo, Inc. question 20 on page 48 at the end of the Chapter 2).
WEEK 3: Lecture #5 on Tuesday, September 20: Chapter 3 (continued) – The Du Pont Identity
Lecture #6 on Thursday, September 22: Chapter 4 Introduction to Valuation (BYC = Bring Your Calculator!)
Discussion 3: Friday, September 23: Du Pont Identity questions and sustainable growth questions 17 through 25 on pages 90 and 81 from Chapter 3. Also, a look at the keys on a financial calculator and a cell phone one of N, I/Y, PV, PMT, FV, and ENTER.
WEEK 4: Lecture #7 on Tuesday, September 27: Chapter 5 – Discounted Cash Flow Valuation (BYC) means Bring Your Calculator.
Lecture #8 on Thursday, September 29: Chapter 5 (continued) – Effective Annual Rates (EARs), Perpetuities, Midterm 1 Overview.
Discussion 4: Friday, September 30: TVM (Time Value of Money) from end of Chapter 4 using your financial calculator – BYC (bring your calculator!) HINT: Do all the worked problems on page 637-639 (textbook Appendix D) for TI BA II Calculators and HP-10B Calculators. Solve problem LO3 on page 121 in Chapter 4. Also, textbook question 19 on page 160; and questions 36, 37, 40, 47, and 54 on pages 162 -163 in Chapter 5. Also, a few multiple choice questions as prep for Midterm 1.
WEEK 5: Tuesday, October 4 is our MIDTERM #1 on Canvas during your regular class period at 10:30am for Lecture 401 or 12:30pm for Lecture 402. Midterm 1 covers Chapters 1-5. BYC and bring a pencil for the scantron exam sheets. For those worried about time pressure, I start the exam 10 minutes early if you wish more time.
Lecture #9 on Thursday, October 6: Chapter 6 – Interest Rates and Bonds
Discussion 5: Friday, October 7: A Midterm Answer Sheet will appear on Canvas. The TAs will discuss some of the midterm’s most frequently missed questions. Scores on your Midterm 1 will be in GRADES in Canvas. There will be a few minutes of comments on Chapter 6 on Bonds as well, especially, “The Five Keys to Bond Valuation,” which will appear on Canvas.
- Saturday, October 8 – Suggested Final Due Date for all SmartBook Chapters 1-5 and Connect Assignments for the first third of our class.
WEEK 6: Lecture #10 on Tuesday, October 11: Chapter 6 (continued) – Bond Features, Bond Types, and Yield Curves.
Lecture #11 on Thursday, October 13: Chapter 7 – Equity Markets and Stock Valuation.
Discussion 6: Friday, October 14: Discuss questions 6.1, 6.2, & 6.9 on page 202 and and question 6 on Westco on page 204, as well as the idea of the Dividend Growth Model (DGM).
WEEK 7: Lecture #12 on Tuesday, October 18: Chapter 7 (continued) – Preferred Stocks, Primary Markets, and Secondary Markets for Equities.
Lecture #13 on Thursday, October 20: Chapter 8 – NPV is Net Present Value and IRR is Internal Rate of Return
Discussion 7: Friday, October 21: DGM – The Dividend Growth Model and selected problems from Questions and Problems on pages 235-236 of 1, 2, 5, 7, 8, and 10 in Chapter 7. Start an NPV question, such as problem 8.1 on page 266 in Chapter 8 and learn to enter the cash flow keys using the CF key and the down arrow.
WEEK 8: Lecture #14 on Tuesday, October 25: Chapter 8 (continued) – Capital Budgeting and Capital Rationing.
Lecture #15 on Thursday, October 27: Chapter 9 – Making Investment Decisions.
Discussion 8: Friday, October 28: Finding NVP and IRR using Excel and on calculators, and selected problems: 2 – 7, and do problem 8 using Excel, and also question 12 on page 270 – 272 in Chapter 8.
WEEK 9: Lecture #16 on Tuesday, November 1: Chapter 9 (continued) – Sensitivity Analysis of Capital Projects and Managerial Options.
Lecture #17 on Thursday, November 3: Chapter 10 – Lessons from Capital Market History.
Discussion 9: Friday, November 4: Calculating project Operating Cash Flows (OCF) examples such as 9.4 on page 307; 9.10 on page 308; 1 and 4 on page 308 – 309; and Pappy’s Potato problem 22 on page 311. Do you include the survey cost of $120,000? Why or why not? Also, some review multiple choice questions for Midterm 2.
WEEK 10: Lecture #18 on Tuesday, November 8: Chapter 10 (continued) Capital Market Efficiency and review for Midterm #2.
Thursday, November 10: is our MIDTERM #2 on Canvas. BYC! Midterm 2 covers Chapters 6-10. Come 10 minutes early if you want a bit of extra time. Bring a pencil for the scantrons.
Discussion 10: Friday, November 11: Some discussion of midterm 2. Return them only if they are done.
- Saturday, November 12 is our Suggested Final Due Date for Connect assignments and SmartBook Chapters 5-10.
WEEK 11: Lecture #19 on Tuesday, November 15: Chapter 11 – Risk and Return.
Lecture #20 on Thursday, November 17: Chapter 11 (continued) – The Security Market Line and CAPM (The Capital Asset Pricing Model)
Discussion 11: Friday, November 18: Arithmetic versus Geometric Returns from Chapter 11. Also, 11.3 and 11.6 on page 389 and question 3. on page 387 and 16 on page 389.
THANKSGIVING WEEK 12: Lecture #21 on Tuesday, November 22: Chapter 12 – The Cost of Capital
Thursday, November 25 is THANKSGIVING.
- No school and no discussion sections the rest of this week during Thanksgiving break: November 23 through November 27. Oddly, this is the Fifth Year in a row when there is no Packer game on Thanksgiving, Weird. Growing up in Michigan, watching the Lion’s on Thanksgiving Day was a given. But we are supposed to meet Da Bears in Chicago on Sunday, December 4. Even though I lived in Chicago for 4 years while attending the University of Chicago, and grew up in Michigan as a Lion’s fan, I’ve definitely become a Packer’s Fan, just in case Charlie Berens is checking up on me. Watch out for deer!
WEEK 13: Lecture #22 on Tuesday, November 29: Chapter 12 (continued) – Some methods for finding the cost of capital for projects not similar to the whole firm.
Lecture #23 on Thursday, December 1: Chapter 13 – Leverage and Capital Structure
Discussion 12: Friday, December 2: Review of CAPM and Cost of Capital, Problems: 1, 2, 3, 4, 5, and 8 on pages 421 in Chapter 12. Beginning the discussion of the good, the bad, and the ugly issues of having more debt in Chapter 13.
WEEK 14: Lecture #24 on Tuesday, December 6: Chapter 13 (continued) – An Optimal Capital Structure?
Lecture #25 on Thursday, December 6: Chapter 14 – Dividends and Dividend Policy
Discussion 15: Friday, December 9: What is a Workout and what is a Bankruptcy? Selected problems from the end of Chapter 13. Try questions 8 and 10 on page 459. Review of the four types of dividend policies and review some multiple-choice questions to prepare for our final.
WEEK 15: Lecture #26 on Tuesday, December 13: Chapter 14 (continued) – Stock Dividends, DRIPs, Should Firms Repurchase their own Shares? Also, review for the final. Wahoo. This is the last class on our climb in financial knowledge.
Thursday, December 15 is STUDY DAY – sorry, no classes.
Friday, December 16 – no discussion sections as we are in finals week.
FINAL: Tuesday, December 20: is our JOINT FINAL in a classroom to be assigned later. This is joint final of both Lectures 401 and 402 from 8PM to 10PM. Remember to BYC! The Final covers Chapters 11-14.
- Wednesday, December 21is Final Deadline at midnight for LearnSmart Chapters and assignments for the semester.
Scores and grades will be posted on Canvas and an email notice will be sent to everyone when grades have been reported on PAWS.