IMB 539

FINANCIAL MANAGEMENT

Spring 2011

Instructor:                         Dr. Clay M. Moffett

Office Hours:                     THF: 10:00AM – 11:00AM

                                             MW:  9:00PM – 10:00PM (or by appointment)

                                             Room 220-O

                                             910.962.3513 (Office)

                                             910.685.4206 (Cell)

                                             E-mail: moffettc@uncw.edu

                                             Web site: www.claymoffett.com (link for class)

Summary of Module Content

This in a corporate finance course designed for international MBA students.  The primary objective of this course is to provide an understanding of finance and financial management.  This primary objective will be supported with examinations of relevant topics in contemporary finance.  These will include an appreciation of financial terms and the interplay between the capital markets, financial managers and financial institutions.  At the core of this basic understanding is knowledge of the tools used by financial managers in their decision-making.  With regular reference to current issues in personal, business and international finance, these tools and terms will be introduced and examined. The course format will be a mixture of lectures, assignments and class discussion

Learning Outcomes

By the end of the module students will be able to:

• understanding how to read and interpret corporate financial statements
• displaying a thorough working knowledge of discounted cash-flow analysis
• demonstrating proficiency in using stock and bond valuation models
• developing and interpreting capital budgeting analyses
• understanding and using the Capital Asset Pricing Model
• understanding the determinants of sound strategies for capital structure and dividend policy
• displaying a knowledge of exchange rates and exchange risks 
• Develop and apply portfolio construction and rebalancing
• Debate alternative theories of portfolio evaluation, risk adjustment, and attribution analysis
• Develop and apply active portfolio weights & portfolio construction
• Understand and able to apply risk-control techniques to an investment portfolio

Indicative Content

Financial statement t analysis and cash management

Long term planning

Capital Budgeting

Risk Valuation – systematic and non-systematic

Capital Structure

Active portfolio weights & portfolio construction

Foreign Exchange

Teaching and Learning Methods

This class will consist of both lectures and discussion. However, students are expected to take a more active role than they are normally accustomed to.  The class size is relatively small, so each student will be expected to contribute – in various ways – on a frequent basis, with ideas, questions and experiences.   Students are encouraged to  locate readings to share with other members of the class.

Assessment Rationale

A brief description follows for each aspect of the evaluated work for the course.

The homework exercises will often be quantitative and will build upon your understanding of financial management toward the final goal of competency in business finance operations and management. Homework assignments are ‘complimentary’ to the lectures.  They flow from the lectures but may require additional research by the student.   The problems are to ‘stretch’ the students understand and encourage resourcefulness.   Students may work cooperatively in understanding the homework, but they are responsible for their individual understanding of the assignment and its execution/completion. 

The exams require knowledge of the theories discussed and the ability to perform quantitatively-based problems.   They will be short answer/essay type questions, performed in-class on the material covered up to that point.  The final is comprehensive in that material covered before the midterm is relevant and utilized, but it will focus on the most recent lectures and assignments.

Assessment Criteria

Students should demonstrate the ability to:

• Develop cogent rationale for points presented or discussed.
• Understand financial statements and be able to reconstruct them.
• Understand time value of money and evaluations of alternative cash flows.
• Critically evaluate fundamental analysis and technical analysis
• Show sufficient understanding of risk management and alternative strategies to manage the risks
• Understand how to select and utilize specific asset valuation models
• Understand capital structure and dividend policy
• Develop a basic understand of foreign exchange risk

Assessment Methods and Weightings:

Recommended Readings

Berk, Demarzo, Harfod – “Fundamentals of Corporate Finance”  Pearson Publishing

Ross, Westerfield, Jaffe – Corporate Finance”  McGraw Hill Publishing.

Recommended Periodicals

The Wall Street Journal

Forbes

Financial Times

Further Reading

Note: Additional readings are likely to be assigned as the course progresses.

ACADEMIC HONESTY

As a student at UNCW, you are pledged to uphold and support the UNCW Student Academic Honor Code:

The University of North Carolina Wilmington is a community of high academic standards where academic integrity is valued. UNCW students are committed to honesty and truthfulness in academic inquiry and in the pursuit of knowledge.  This commitment begins when new students matriculate at UNCW, continues as they create work of the highest quality while part of the university community, and endures as a core value throughout their lives.

Guidelines in support of the Honor Code, including definitions of cheating and plagiarism, may be found at:

http://www.uncw.edu/policies/documents/03_100FINALHONORCODE_Aug2009.pdf

OTHER POLICIES:

1. Attendance is strongly encouraged.   Material on the lecture is included in the exams and homework will be taken up or pop tests given.

2. Proper manners and courtesy are expected. If you arrive late take the first available seat in the back. Turn off your cell phones/pagers before coming to class.

3. Ask questions! Chances are if you do not understand something, someone else also does not understand. Participation is part of your role in the class.

4. On an exam you may not use a graphing calculator of any variety. In addition, you may not use a cell phone or a PDA as a calculator on exams or have them within view or easy reach.  Should you leave the classroom for any reason during the exam and a question about the exam is answered, you (the student alone) is responsible for missing the information given.  I would suggest you not leave the room or turn in your test until you are comfortable with the answers.  If you have questions, ask.

5. You may call or email me anytime with questions (I check email several times during the day or you may email me at home (claymof@charter.net) or text me.  On the night before a test, the cutoff time for any question is 8:00PM. 

6.  You have till the end of the next class period after tests are handed out in class to return your exams with typewritten questions regarding grading.  If you have an excused absence, the clock will start when I give you your exam – till the end of the next class.  Also, when taking a test, should you leave the room or turn in your test early and a question is answered about the exam when you are not present, it is your responsibility.  I repeat questions for the entire class, if you are absent, that is beyond my control. 

7.  Appropriate academic support is available for any student with a documented disability.  Notify me and/or contact the Office of Disability Services (3746) for further information.

8. The following policies apply to all exams:

·        For short answer problems that require calculations, work must be shown to receive any credit, even if the answer marked on the exam is correct.

• For short answer, only provide the number of answers requested in the question.  For example, if a question asks you to “describe two items,” then please only provide two answers as I will only grade the first two answers even if subsequent answers are correct.
• The exams begin at the start of the class period and are not administered on a drop-in basis.  Once the first student finishes the exam, no further late arrivals will be administered an exam.

FREQUENTLY ASKED QUESTIONS

Q:          I had to miss class.  Can I come to see you about what I missed?

A:           Yes, but you will need to come prepared with questions and a set of notes from a classmate. 

Q:          Are there tutors available?

A:           You are always welcome to see me during office hours or to make additional appointments with me for extra help.  Unfortunately, the CSB does not provide tutors for this course.  If you feel you need additional tutoring, I may be able to put you in touch with prior students who will tutor for a fee. 

Q:          Do you have any suggestions to help me improve my grade?

A:           Yes.  First, take notes in class.  Second, rewrite your notes after class.  Third, review your notes with me occasionally or on a regular basis.  Fourth, complete the practice problems.  Fifth, form a study group with other students and “teach” each other the concepts. 

Q:          Will everything that we cover in class or on assignments be on the exam?

A:           No.  Because we have limited time for testing, I have to be selective about what will be on an exam.  Some concepts I prefer to assess using assignments rather than exams. 

Q:          Is the test going to be hard?

A:           In the past, students have found that exams are similar in difficulty to the practice/review questions suggested for each chapter.  If you find these questions difficult, please make plans for extra help with me. 

Q:          Can I do any extra credit assignments to bring up my grade?

A:           There are no further opportunities for grades beyond the scheduled exams and projects. 

Q:          Are the grades curved?

A:           There is no “curve” imposed on the grades.  I will, however, revisit particular test questions to ensure that they tested the learning outcomes I intended to test.  Occasionally, I will adjust exams by discarding questions that didn’t do a good job of testing the material. 

Q:          Can we use a formula sheet or a notes sheet on the exam?

A:           The formulas will be provided for you on the exam.  You may not bring