Professor: Dr. Song Office: SS 3357

Office Hour: 4:00 - 5:00 (Mon/Wed) Phone: 594-5334 or by appointment E-mail: moon.song@sdsu.edu

    I. Course Description

Finance 325 is designed to strengthen and extend your knowledge of financial theory and practice. Topics covered include the theory of value, risk and return, capital investment decisions, and financing decisions. We also discuss the mechanics and regulatory environment of corporate takeovers, leveraged buyouts, and various form of managerial compensation.  This course draws from and integrate material in your previous finance, economics, accounting, and quantitative methods course. Especially, you should be familiar with the basic statistics and elementary calculus.

Prerequisites for Finance 325 include a minimum grade of C in Finance 323 and other requirements specified in the General Catalog or other governing documents.

Text: Brealey and Myers, Principles of Corporate Finance, McGraw-Hill, fifth edition.

Final grades will be based on assignments (10%), midterm exam I, II (30%, 30%), final exam (30%).

*. Some of the assignments will require the use of a spreadsheet package such as Quattro, Excel or Lotus 1-2-3.
*. Late assignment will be depreciated.
*. Exams are closed book and will consist of numerical problems.
*. No make-up exam is allowed.
*. All exam and graded assignments will be kept by the professor.
 

WEEK            TOPIC                                                                                   Problems

1                    Ch 1 Why Finance Matters ?

1                    Ch 2 Present Value                                                                 1,4,7

2                    Ch 3 How to Calculate Present Value ?                                  4-6,8-10,13-19

2                    Ch 4 The Value of Common Stocks                                        9,10,14-17

3                    Ch 5 Why NPV ?                                                                  1,3,7-9

3                    Ch 6 Making Investment Decision under NPV                        5-8,11,12,15,16

4                    Ch 7 Introduction Risk, Return, and Opportunity Cost of Capital 13-19

5                    Ch 8 Risk and Return                                                             6-8

6                    Midterm I (March 1: Mon.)

6/7                  Ch 9 Capital Budgeting and Risk                                            6,8,11,12,14,16

7                    Ch 13 Market Efficiency

7/8                  Ch 16 Dividend                                                                     4,6,7,12

8/9                  Ch 17 Does Debt Policy Matter?                                           1,2,10

10                    SPRING BREAK

11                    Ch 18 How Much Should a Firm Borrow?                             3,8

12                   Midterm II (April 12: Mon)

12/13               Ch 19 Interactions of Investment and Financing                     1,2,7,8,11

13/14               Ch 20 Valuation of Option                                                   7,8,10,13,14,19

14                   Ch 21 Application of Option                                                1,3,4,6,10,14

15                   Ch 23 Valuing Risky Debt                                                    1-5,8,10-15

16                   Ch 26 Leasing                                                                     11-13

16                   Ch 33 Mergers                                                                     1-6

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