COURSE OUTLINE

Professor: Sirousse Tabriztchi

Office: Room 335

Office Hours: Wednesday 6-8

E-mail Cyrus1315@Aol.Com

Semester: Spring 2002

TEXT

Required: Brigham and Gapenski, Intermediate Financial Management, 6 ed.

Optional: Study Guide for Intermediate Financial Management

A.1. COURSE DESCRIPTION

The purpose of Financial Management II is to integrate and explain through case method, topics completed in Financial Management I. Students taking Financial Management II should expect to work individually and jointly on lengthy and complex case problems on capital budgeting, financial analysis, dividends, mergers and acquisitions, and leverage buyouts.

A.2. INTENDED AUDIENCE

1. Whereas Financial management I is designed for all business students and provides broad overview of finance, the course is designed for finance majors. It offers greater depth on the core issues of capital budgeting, capital structure, cost of capital, or working capital management.

A.3. OBJECTIVES

1. To reinforce and extend the principles covered in Financial Management I.

2. To help you improve your skills in analyzing financial issues and presenting results.

3. To develop your oral and written communication skills.

4. To address ethical and environmental issues involved in management of business and nonprofit organizations.

5. To investigate global issues involved in financial operations of business.

6.

B. PREREQUISITES

BU4762 Financial Management I.

C. MODE OF INSTRUCTION

We will have lectures, cases, supervised-structured research, role-playing, dialectical question and answers, and guest presentations.

C.1. CASES

1. We will cover a total of 3 major cases.

2. The cases will be assigned a week in advance and each student will research the related materials and prepare a written report.

3. In the classroom, each team will analyze and discuss the individual reports and prepare and present a formal team report.

C.2. MINI CASES AND PROBLEMS

1. Each lecture session will be followed by a case analysis or exercise and discussion session. The discussions will include the supplementary readings, lecture, and text materials.

2. Exercises will be assigned a week in advance and must be done.

3. If you miss an exercise session you have to do the problems and hand them in the next session.

C.3. CONSULTING AGREEMENT AND CLASSROOM PERFORMANCE

You will receive a consulting agreement and should begin working on it immediately. The agreement will require collecting and analyzing information about a major company as well as several theoretical analysis and discussions. A close study of your textbook is a must. Also, you should supplement your research by utilizing additional references.

D. STUDENT RESPONSIBILITIES

1. You are all seniors, most looking for jobs or advancing your careers in finance. Normally, all of you will perform well in this course. However, if you are interested in financial management, you can put forth more effort, learn more, and earn an excellent grade. Generally, for each class hour you should schedule 2 hours of reading and research each week.

2. Your participation in the classroom team discussions and report preparation and your performance in consulting work should represent top quality professional work.

3. All assignments will be submitted on time. Delayed submission will decrease your grade.

4. Regular class attendance is required. Missing three sessions could result in failure.

E. GRADING

Your grade for the course will be determined as follows:

Requirement Value Number Total

Cases 10% 3 30%

Readings and problems 3 12 36

Consulting Project 34% 1 34

100%

F. AGENDA

DATE	CHAPTER AND TOPIC	Study Time and ASSIGNMENT	TIME
Week 1	§ Overview of Financial Management II § Supplemental Reading 1. (1)	Chapters 1 and 2 8 hours	Tues. & Th. 6:10 T0 7:50
Week 2	§ Analysis of Risk and Return § Supplemental Reading 5. (2)	Chapters 25 and 26 8 hours	Tues. & Th. 6:10 T0 7:50
Week 3	§ Analysis of Financial Statements § Supplemental Reading 2. (3) § Case 1. Computron Industries assigned. Students will prepare written analysis for the next session. § Supplemental Readings 7 and 8 are assigned for next session for student presentation and discussion. (4, 5)	Chapter 3 8 hours Case and readings 8 hours	Tues. & Th. 6:10 T0 7:50
Week 4	§ Long Term Financial Planning and Control § Group analysis of Computron Industries Case. § Supplementary Reading 11. (6) § Discussion of Readings 7 and 8	Chapter 4 8 hours	Tues. & Th. 6:10 T0 7:50
Week 5 Week 6	§ Valuing the Firm Cash Flow Model § Students present preliminary analysis of financial statements of the Company in accordance to the consulting agreement. § Reading 9. (7) § Case 2. F & C International: A Case Study of an IPO valuation Assigned. Consulting groups will be formed. The Groups should meet before next class and prepare their analysis and presentations.	Chapter 4 8 hours	Tues. & Th. 6:10 T0 7:50

DATE	CHAPTER AND TOPIC	Study Time and ASSIGNMENT	TIME
Week 7	§ Determining Cost of Capital § Group presentation of Case 2. § Assigned for next session: Questions 5-1, 5-3, 5-6, and Harry Davis Industries Mini Case. (8)	Chapter 5 8 hours	Tues. & Th. 6:10 T0 7:50
Week 8	§ Capital Budgeting Decision Criteria § The questions will be answered and the case will be reviewed. § Supplemental Reading 3. (9)	Chapter 6 8 hours	Tues. & Th. 6:10 T0 7:50
Week 9	§ Project Cash Flow Estimation § Students will report their analysis of the companies § Review of the assigned problems § Case 3. The Management Buyout of White Hen Pantry, Inc.	Chapter 7 8 hours	Tues. & Th. 6:10 T0 7:50
Week 10	§ Capital Structure – Decisions § Students present reports on companies § Group analysis and presentation of Case 3. § Question 11-1, Mini Case Cheney Electronics assigned. (10)	Chapter 10 8 hours	Tues. & Th. 6:10 T0 7:50
Week 11 Week 12	§ Capital Structure Theory § Question and Mini Case reviewed.	Chapter 11 8 hours	Tues. & Th. 6:10 T0 7:50
Week 13	§ Dividend Policy § The Case will be discussed by groups and formally presented. § Supplementary Reading 4. (11)	Chapter 12 8 hours	Tues. & Th. 6:10 T0 7:50
Week 14	§ Working Capital Management § Managing Current assets.	Chapters 16 and 17 8 hours	Tues. & Th. 6:10 T0 7:50
Week 15	§ Working Capital Management § Managing Current assets. § Review Reading 4.	Chapters 18 8 hours	Tues. & Th. 6:10 T0 7:50
Week 16	§ Derivatives and risk management § Supplementary Reading 12. § Term Projects Due	Chapter 19 8 hours	Tues. & Th. 6:10 T0 7:50

G. SUPPLEMENTAL READINGS

The students are required to read and prepare one page summary and evaluation of each article.

1. Chang S. J., “Whose Wealth to Maximize,” Journal of Financial Education 23 (1997), 1-13.

2. Ball R., “The Theory of Market Efficiency: Accomplishments and Limitations,” Journal of Financial Education 22 (1996), 1-14.

3. Barber J. R. And D. C. Thurston, “Frequent Compounding and the discrete Compounding Adjustment,” Journal of Financial Education 24 (1998), 90-94.

4. Harris Milton and Arthur Raviv, “The Theory of Capital Structure,” The Journal of Finance, XLVI (March 1991)

5. Pace R. K., “A Simple Exposition of the Markowitz Model,” Journal of Financial Education 22 (1996), 65-71.

6. Copeland, Tom, Tim Koller, and Jack Murrin, Valuation: Measuring and Managing the Value of Companies (New York: John Wiley & Sons, Inc. 1992), Chapters 9 and 10.

7. Liang B., “On the Performance of Hedge Funds,” Financial Analysts Journal, July and August 1999.

8. Block, S., “A Study of Financial Analysts: Practice and Theory,” Financial Analysts Journal, July and August 1999.

9. Ross, Stephen A., Westerfield, Randolph W., and Jaffe, Jeffrey, Corporate Finance (New York, Irwin / McGraw-Hill, 1999) Chapter 11, 271-287.

10. Harvard Business School, “Note on Financial Forecasting,” April 18, 1983 (9-206-048)

11. Tabriztchi Sirousse, “Corporate Financial Planning- Pro Forma Statements,” Manuscript ã

Chicago Board Of Trade, “ Advanced Concepts (Index Options),”