BA 3341-004

BUSINESS FINANCE

FALL 2005

Instructor: Larry J. Merville

Classroom: SM 1.107
Time: Wednesday 2:00-4:45 p.m.

Office: SM 3.612 (972-883-2711)

Office Hours: By appointment.

TA: Sinan Goktan (SM 3.607)

Text: Ross, Westerfield and Jordan, Fundamentals of Corporate Finance,

Irwin-McGraw-Hill, 7th edition (standard).

Optional: Merville, Class Notes, Business Finance, UT-Dallas.

Wall Street Journal.

Calculator/PC: A financial calculator or PC spreadsheet is not required for the course but
is recommended for problems and exams.

Grading: EXAM I (EXI) 300 points

EXAM II (EXII) 300 points
FINAL EXAM (FIN) 400 points

You must take the comprehensive Final Exam to receive a grade in the course. The exams will be
multiple choice. Dates of the exams are marked in bold on the Course Outline page of the
syllabus. Students are strongly encouraged to take all of the exams.

The exact procedure for receiving a grade in the course will be explained early in the semester..

Instructional Support: See Appendix.

Notice of Policy on Cheating:

Policy on Cheating: Students are expected to be above reproach in all scholastic activities.
Students who engage in scholastic dishonesty are subject to disciplinary penalties, including the
possibility of failure in the course and dismissal from the University. "Scholastic dishonesty
includes but is not limited to cheating, plagiarism, collusion, the submission for credit of any
work or materials that are attributable in whole or in part to another person, taking an
examination for another person, any act designed to give unfair advantage to a student or the
attempt to commit such acts." Regents' Rules and Regulations, Part One, Chapter VI, Section 3,
Subsection 3.2, Subdivision 3.22.

Hand-Held Calculators: Selected

1. Texas Instruments BA-II Plus

2. Hewlett-Packard 10B
3. Sharp EL-733

The above calculators have all of the functions that you will need for this course (e.g., bond
valuation, net present value (NPV), and internal rate of return (IRR) functions). These calculators
are all excellent choices for introductory finance. However, you should study the Manual which
comes with your calculator early in the course. Also, try to work the Recommended Problems
using your calculator where appropriate. Remember, practice improves your understanding of
how your calculator works.

Recommended Learning Regimen:

* Outside of Class
-- Read Assigned Chapter(s)
-- Review Class Notes
-- Work on Recommended Problems
-- Check Problems in Solutions Manual
-- Listen to WebCT Lectures
-- Meet with TA
-- Form Study Groups.

* During Class
-- Attend Lectures
-- Study Covered Recommended Problems.
 COURSE OUTLINE

TEXTBOOK
DATE TOPIC(S) CHAPTER(S)

8/24 Overview 1

8/31 Financial Analysis, 2, 3, 11(pp. 337-351),

Funds Statements, 19 (pp. 614-622)
Depreciation, Cash Budgets, Taxes
Operating Leverage & Breakeven Analysis

9/7 Time Value of Money 5, 6

9/14 Capital Budgeting under Certainty 9, 10

9/21 Capital Budgeting under Risk 12, 13

9/28 Working Capital Management 19 (pp. 614-619),

20, 21

10/5 Review Lectures, Problems

10/12 EXAM I

10/19 Cost of Capital 7, 8, 15

10/26 Capital Structure and Leverage 17

11/2 Near and Long-Term Financing 16 (pp. 520-524),

19 (pp. 622-626)

11/9 EXAM II

11/16 Dividend Theory and Practice 18

11/23 Strategic Planning 13 (pp. 398-402)

22

11/30 FINAL EXAM All Assigned Chapters

Omit all chapter appendices except 20A and 21A. Recommended problems will not be collected. Work several chapter
problems.
 RECOMMENDED PROBLEMS

Chapter Problems

1 --

2 18

3 26

5 6, 11

6 44, 69

7 10, 30

8 6

9 1, 14, 17

10 16

11 9

12 7

13 2, 7, 11, 13, 14

15 1, 15

16 1

17 1, 16

18 12, 14

19 7, 11, 12

20 1

20A 1

21 1

21A 1

22 6, 8

.
Source: Fundamentals of Corporate Finance: 7th edition, Ross, Westerfield, & Jordan (standard)
 APPENDIX

INSTRUCTIONAL SUPPORT

* LEARNING OBJECTIVES

-- Understanding Goal of the Firm

-- Determining Time Value of Money

-- Measuring Risk

-- Calculating Value

-- Evaluating Capital Proposals

-- Optimally Selecting Capital Funds

-- Determining Dividend Payments

-- Understanding Strategic Capital Management

-- Learn WebCT.

* EXAM SUPPORT

-- Copy of Instructor's Solution Manual on reserve in Library

-- WebCT Lectures

-- Copies of Class Notes on reserve in Library and also at Off Campus Books located
at 581 W. Campbell Road

-- Copies on reserve in Library of "Notation and Terms" and "Grading Procedures."

-- Practice Exams: www.utdallas.edu/~merville/ (see exams).