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MBA 8230 Applications in Corporate Finance: Course Syllabus Spring Semester 2005

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Georgia State University

J. Mack Robinson College of Business


Department of Finance

MBA 8230
Applications in Corporate Finance
Course Syllabus Spring Semester 2005
Instructors:
Richard Fendler, Charles Hodges, Alfred Mettler, Lalitha Naveen
NOTE: It is your responsibility to read, understand and abide by all of the course information
and policies listed below. Failure to do so could result in your failing this course or being
administratively withdrawn from the course by your instructor, by the Department of Finance,
or by the Robinson College of Business. This course syllabus provides a general plan for the
course; deviations may be necessary.

Purpose of the course:


The course focuses on selected practical applications of major corporate finance topics. The treatment
of all areas involves theoretical concepts and the application of these concepts to contemporary
business situations for the purpose of corporate decision-making. Topics covered include, but are not
limited to: Risk and return analysis, real options and capital budgeting, cost of capital, and capital
structure decisions. These topics help the corporate manager understand how the market values the
sources of capital and how these values impact corporate decisions.

Course Prerequisite: MBA 8130


Course Coordinator:
E-mail messages concerning any course-related matter should be sent to the course coordinator,
Dr. Lalitha Naveen at lalitha@gsu.edu

Georgia State University


Spring 2005

A.

MBA 8230: Applications in Corporate Finance

COURSE MATERIAL

Required Text:
Corporate Finance: A Focused Approach, by Michael C. Ehrhardt / Eugene F.
Brigham, Thomson South-Western, 1st ed. 2003. Additional student resource
material can be found on and downloaded from the textbooks website (click on
student resources):
http://www.swcollege.com/finance/ehrhardt/focused/focused.html

Course Website:
An extensive web page will be available and it is highly recommended that students check it
out as soon as possible. The website includes, among other things,
a) administrative information (syllabus, e-mail addresses of instructors, final exam
schedule)
b) supplemental course material (solutions to end of chapter-problems, practice take home
assignments (THA), practice final exams)
c) lecture segments (using PowerPoint slides with audio and/or video)
The current web site address is: http://www.gsu.edu/~fnccwh/mba8230.html

Financial Calculator:
It is necessary that you have a financial calculator to use throughout the course and that you bring it
to class each Week. Many end-of-chapter problems require complex arithmetic operations, and a
financial calculator is necessary to solve these problems efficiently. Recommended financial
calculators are the Texas Instruments BA II Plus, the Hewlett Packard 10B or 12C, the Sharp EL 733,
and similar models. Approximate price: $30.

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Georgia State University


Spring 2005

B.

MBA 8230: Applications in Corporate Finance

ATTENDANCE POLICY / ACADEMIC HONESTY

Attendance Policy:
Each student is expected to attend ALL scheduled class meetings for the entire duration of the class
meeting. An attendance sign-up sheet will be circulated each class period. It is your responsibility
to sign the attendance sheet. If you do not sign the list, you will be considered absent (see the
note on academic honesty below). Students arriving late may be permitted to sign the sheet only at the
discretion of the instructor.
Any student who is absent from more than two weeks of classes will be dropped from the course.
Absences include the first week of class regardless of when a student registered for the course. If a
student is withdrawn for excessive absences after the midpoint of the grading period, a final grade of
WF will be assigned. There will be no exceptions to this policy!
An absence from class for any reason (job conflict, illness, appearance in court, transportation
problems, etc.), even if permitted and/or excused by your instructor, will count as one of the class
absences against the two week equivalent cumulative limit specified in the previous paragraph.

Academic Honesty:
The Department of Finance adheres strictly to the University's policy on academic honesty as
contained in the Academic Regulations section of the University catalog. Any student found copying
during exams or quizzes, signing someone else's name to the attendance list, using stored formulas in
programmable calculators, using non-authorized formula sheets or other notes during exams,
collaborating on and/or copying the time value of money take-home problem set or other take-home
assignments, or the like will receive an F for the course and possibly be subject to additional University
disciplinary action.
No other electronic devices are allowed during quizzes and exams besides a financial calculator (see
page 2). Such prohibited items include laptops, personal digital assistants (PDAs), text messaging
systems and similar devices. If you have any questions about the legality of your calculator, check with
your instructor.

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Georgia State University


Spring 2005

C.

MBA 8230: Applications in Corporate Finance

IMPORTANT COURSE INFORMATION AND POLICIES

Grade Weights:

Final Exam
Take-Home Assignment
Quizzes
Instructor-Specific Component

50%
15%
20%
15%

Final Exam:
The final exam is cumulative and will be given on the day listed in the course outline.

Take Home Assignment (THA):


A take-home assignment will be due on the date assigned by your instructor. Prior take-home problem
sets (including some solutions) are posted on the course webpage.

Quizzes, Homework and/or Project:


There will be at least two quizzes given during the course, consisting of problems that are similar to
questions and problems in the textbook from any of the chapters covered to date in that section. If you
keep up with the daily assignments listed in the course outline and/or announced by your instructor,
your chances of solving these problems correctly will be greatly enhanced. Note well that failure to take
a quiz due to absence from class (regardless of cause or reason) will result in a grade on that specific
quiz of zero - NO EXCEPTIONS!
Your instructor may also require you to turn in homework and/or course projects. Specific assignments
and due dates will be announced in class.

Instructor-specific component:
These points are allocated at the discretion of the instructor and will vary by class section and
semester. This component may be a group project, presentation and/or paper, another quiz, a
spreadsheet-solution, a case study and/or a grade for class participation. Your instructor will explain
this component of your grade in detail during the first week of class.

Grading Policy - Department of Finance:


In accordance with Departmental policy, for masters level courses (MBA and FI prefixed), it is expected
that no more than 35 percent of the students in a given class section will receive a grade of A. The
majority of the remaining students are expected to receive grades of B. Those students demonstrating
significantly lagging performance shall earn grades of C or lower as appropriate.

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Georgia State University


Spring 2005

D.

MBA 8230: Applications in Corporate Finance

TENTATIVE COURSE OUTLINE

Daily assignments, which should be completed before that topic is covered in class, are listed in the
third column. Students are responsible to know and understand the subject matter covered in each
textbook chapter, regardless of whether that material has been covered in class. Students are also
responsible to know how to solve all assigned end-of-chapter problems for each textbook chapter listed
as a Prepare chapter.

Preparation
Class #
Class 1

Class 2

Class 3

Class 4

Class 5

Class 6

Class 7
Mini-session

Friday,
May 6th

- Text: Corporate Finance: A Focused Approach


(Ehrhardt/Brigham), 1st ed. 2003

Topics to be covered
The Cost of Capital
- Cost of Debt
- Cost of Equity
- Weighted Average Cost of Capital
Cash Flow Estimation and Risk Analysis
- Cash Flow Estimation
- Identifying Relevant Cash Flows
- Evaluating Basic Capital Budgeting Projects
Advanced Topics in Capital Budgeting
- Replacement Decisions
- Project Risk Analysis
- Introduction to Decision Trees
Real Options and Capital Budgeting
- Introduction to Financial Options
- Introduction to Real Options
- Decision Tree Analysis of Real Options
Financial Planning and Forecasting
Financial Statements
- Overview of Financial Planning
- Financial Statement Forecasting
Financial Statements, Cash Flows and Taxes
Analysis of Financial Statements
(Self-study chapters)
Capital Structure Decisions
- Business Risk and Financial Risk
- Capital Structure Theory
Capital Structure Decisions
- Estimating the Optimal Capital Structure
- Checklist for Making Capital Structure Decisions

Prepare Text Chapter 6

- Prepare Text Chapter 8

- Prepare Text Chapter 8

- Prepare Text Chapter 17

- Prepare Text Chapter 11

- Prepare Text Chapters 9 and 10


Lecture segments on course website

- Prepare Text Chapter 13

- Prepare Text Chapter 13

Separately scheduled session on Friday, April 29th,


2005 from 7:00 PM 8:30 PM; location to be
announced (detailed explanations will be given
in class)

Final Exam (7.15 PM 9.15 PM)


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Downtown / North Metro Alpharetta


(exact locations to be announced)

Georgia State University


Spring 2005

MBA 8230: Applications in Corporate Finance

MEMORANDUM

To:

Students Enrolled in MBA 8230

From:

Chairman - Department of Finance

Semester:

Spring 2005

Subject:

MBA 8230 course policies

a)

Attendance for Final Exam

The Department of Finance schedules common, Department-wide final examinations in MBA 8230.
The Final Exam is scheduled for Friday, May 6th, 2005, 7.15 PM - 9.15 PM
Variances granted from the common final examination date are undesirable for obvious reasons.
Intrinsically, early examination exposes any student to question, even if innocent, when cheating is
discovered. The penalties for cheating are severe; consult GSUs Graduate Bulletin for specific
university regulations. Core courses are offered each semester. Therefore, if you foresee a personal
conflict with the examination date please register for the course in a later semester. Only the
Department Chairman grants variances for the final examination date, permission granted by others will
not be honored.

Guidelines for requested variance


1. Requests for variance must be received in the Department's office by March 28th, 2005. This leadtime will allow for course withdrawal in the event of the denial of a variance request. The last day
to withdraw and possibly receive a "W" is April 8th, 2005.
2. A letter must be written to the Chairman and must be supported by additional documentation
regarding the student's conflicting obligation. Job conflicts are to be supported by a letter from the
student's supervisor on company stationary. Variances for students involved in the wedding of an
immediate family member will be considered. Others will not. Copies of a wedding invitation and
statement of kinship must support those considered.
3. The letter to the Chairman should include your social security number, telephone number, address,
name of instructor, and course section. It should be mailed or faxed to the Chairman of the
Department of Finance, Robinson College of Business, MSC 4A1264 33 Gilmer Street SE Unit 4,
Atlanta GA 30303-3084 (Fax: 404 651 2630).
4. If a variance request is approved, the Department will determine the date and site of an alternate
examination. It is Departmental policy that an alternate examination will be scheduled at an earlier
rather than a later date.

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Georgia State University


Spring 2005

b)

MBA 8230: Applications in Corporate Finance

Withdrawal:

Grades at withdrawal are determined in strict compliance with policies stated in the Graduate Catalog.
A grade of "W" indicates that a student, doing passing work, was permitted to withdraw from the
course. A grade of "WF" indicates that the student
1.
Voluntarily withdrew from a course before the midpoint for the grade period while doing failing
work,
2.
Was involuntarily withdrawn from a course before the midpoint of the grading period while doing
failing work,
3.
Voluntarily withdrew from a course after the midpoint of the grading period and was not awarded
a hardship withdrawal, or
4.
Was involuntarily withdrawn from a course after the midpoint of the grading period and was not
awarded a hardship withdrawal.

c)

Examinations:

Material from the text chapters (both preparation chapters and reading chapters), end-of-chapter
problems, supplemental problems, cases, and the prerequisites may be covered on the exams,
whether or not specific coverage in class has occurred.

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