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FE 721 B1 and D1 FINANCIAL MANAGEMENT
FALL 2006
COURSE SYLLABUS
Professor Yrjo Koskinen595 Commonwealth Ave., Room 532Email:
[email protected]: 617-353-9775
Course website: All course information and materials are
available to you on SMGtools.There is no course package. Please
make sure to download the lecture notes, assignmentsand readings
before every class.
Class Meets: Tuesdays and Thursdays 9:30 10:50 AM (cohort B),
12:30-1:50PM (cohort D) in SMG Room 322.
Office hours: Tuesdays and Thursdays 11.00 AM 12.00 PM
Teaching Assistants: Rick Fedor ([email protected]) and Chris Teng
([email protected]).They hold walk-in tutorials on Tuesdays (11:00 am
12:00 pm) and on Wednesdays(4.00 pm 5.00 pm) in room 518L.
Text books:Corporate Finance by Ross, Westerfield, and Jaffe,
7th Ed., McGraw Hill-
Irwin, 2005.
Financial calculator: Sharp EL733A (approx. $35), available at
Barnes and Noble BUbook store and at Staples. You will be better
off using this calculator even if you alreadyown a financial
calculator. This is because I use this model to describe keystrokes
tosolve financial problems in class.
Recommended as a companion resource: A subscription to theWall
Street Journalor tothe Financial Times.
A special student rate is available by signing up in class. When
you subscribe to the WSJ,
you also get a subscription to the online versions of the WSJ,
Barron's, and MoneySmartat no additional cost. For FT, you can
either subscribe to print and online versions or justto the online
version. You will be billed directly in all cases.
Spreadsheet assignments: Building spreadsheet models helps to
achieve one of the maingoals of this course to learn the logical
relationships among financial variables.Moreover, the ability to
work comfortably with spreadsheet models is an essential skillthat
can only be learned through practice. Therefore, I have included a
series of 7
mailto:[email protected]:[email protected]:[email protected]://interactive.wsj.com/bin/login?Tag=/&URI=/update/edit/frontpg.htmlhttp://interactive.wsj.com/bin/login?Tag=/&URI=/update/edit/frontpg.htmlhttp://www.ft.com/http://www.ft.com/mailto:[email protected]:[email protected]:[email protected]://interactive.wsj.com/bin/login?Tag=/&URI=/update/edit/frontpg.htmlhttp://www.ft.com/
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spreadsheet assignments which you are to do during the semester
and submit to me at theappointed times. You must do at least 5 of
them to get full credit. Please read carefullythe introductory
paragraph that describes the spreadsheet assignments for
essentialinformation. The spreadsheets will not be handed back
during class hours, but in generalthey will be returned to your
files in the student lounge.
Examinations and grades: Examinations are non-cumulative, in the
sense that each onewill concentrate on the material covered during
the pertinent dates covered by that exam.(Obviously, certain terms,
concepts and skills carry throughout the course.) The coursegrade
will be based on:
Examination 1: 20%Examination 2: 20%Examination 3: 20%Bonus for
your best exam: 5%Spreadsheet assignments: 10%
Co-ordinated course project: 10%Class participation: 15%
Class attendance: I will go over new material, selected homework
problems and testproblems in class. Regular attendance is needed
for good performance. More than oneabsence will result in a
reduction of your final grade points. There are no make-ups forthe
exams without an appropriate excuse. Advance notification or a
written medicalexcuse is required for excused absence at an exam.
An unexcused absence will result in azero score for the test. Any
make-up mid-term exam will be administered during the finalexam
period.
Study Groups: Discussing the problems with classmates will help
you greatly in learningthe concepts and in preparing for exams. I
strongly encourage you to form study groupswhich meet regularly (at
least via e-mail).
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FE721 B1 and D1 FINANCIAL MANAGEMENT
FALL 2006
CLASS SCHEDULE
Date of Latest Revision: September 27, 2006
SESSION DATES TOPIC ASSIGNMENT
1 Sep 12(Tues)
CourseIntroduction andOverview;Introduction toCorporate
Finance
Ch. 1; Read your calculator manual to learn basicfunctions
including switching modes, logarithms,exponentiation, memory,
display a specificnumber of decimal places, and storing values.
2 Sep 14(Thurs)
Net Present Valueand the TimeValue of Money
Ch. 4. At every opportunity as you study thischapter, try to
adapt its ideas to the financialcalculator. Familiarize yourself
especially withthe row of keys: n, i, PV, FV and PMT.
3 Sep 19(Tues)
Net Present Valueand the TimeValue of Money(continued)
Ch. 4; Spreadsheet #1 discussion.
4 Sep 21
(Thurs)
Net Present Value
and the TimeValue of Money(continued)
Ch. 4; Spreadsheet #2 discussion.
5 Sep 26(Tues)
Principles ofAsset Valuation;Bond ValuationModels
Ch. 5 (pages 106-112); Spreadsheet #1 due;Spreadsheet #3
discussion.
6 Sep 28(Thurs)
Bond ValuationModels
Ch. 5 (pages 106-112) and Appendix 5A (pages134-143);
Spreadsheet #2 due.
7 Oct 3(Tues)
Bond ValuationModels
Ch. 5 (pages 106-112) and Appendix 5A (pages134-143)Previous
FE721 Mid-term Exams(These are available on course Web site.Answers
are also available there); Spreadsheet#3 discussion.
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8 Oct 5(Thurs)Note:
Cohort Bmeets at 8
am
Exam 1 You may bring to the exam a 2-sided page of your own
notes. Remember to bring yourcalculator and calculator manual.
Oct 10(Tues)
No class
9 Oct 12(Thurs)
Valuation Models:Common Stocks
Ch. 5, pages 112-end (omit pages 123-124) ;Spreadsheet #3
due.
10 Oct 17(Tues)
Valuation Models:Common Stocks
Ch. 5, pages 112-end (omit pages 123-124);Spreadsheet #4
discussion.
11 Oct 19(Thurs)
Net Present Valueand CapitalBudgeting
Ch. 7 (omit pages bottom 195- 197); Spreadsheet#4 due.
12 Oct 24(Tues)
Net Present Valueand CapitalBudgeting
Ch. 7 (omit pages bottom 195- 197); Spreadsheet#5
discussion.
13 Oct 26(Thurs)
Some AlternativeInvestment Rules
Ch. 6. Omit pages 154 - mid-163.
14, 15 Oct. 31(Tues).
Note thatthis is a 3-hour class.
BreakevenAnalysis
FinancialPlanning andGrowth
Ch. 8, read Section 8.2 only, with specialemphasis on Breakeven
Analysis; Spreadsheet#5 due.Ch. 3; Spreadsheet #6 discussion.
Nov. 2(Thurs)
No class due to the accounting presentations
16 Nov 7(Tues)
Review Sessionfor Exam 2
Previous FE721 Mid-term Exams (These areavailable on course Web
site. Answers are also
available there); Spreadsheet #6 due.
17 Nov 9(Thurs)Note:
Cohort Bmeets at 8
am
Exam 2 You may bring to the exam a 2-sided page of your own
notes. Remember to bring yourcalculator and calculator manual.
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18 Nov 14(Tues)
Capital MarketTheory: AnOverview
Ch. 9.
19 Nov 16
(Thurs)
Risk and Return;
The Capital AssetPricing Model
Ch. 10
Nov 21(Tues)
No class due to the marketing simulation
20 Nov 28(Tues)
Risk and Return;The Capital AssetPricing Model
Ch. 10
21 Nov. 30(Thurs)
Risk and Return;The Capital Asset
Pricing Model
Ch. 10; Spreadsheet #7 discussion.
22 Dec 5(Tues)
Risk, The Cost ofCapital andCapital Budgeting
Ch. 12 (omit section 12.6).
23 Dec 7(Thurs)
Risk, The Cost ofCapital andCapital Budgeting
Ch. 12 (omit section 12.6); Spreadsheet #7 due.
24 Dec 12(Tues)
Exam 3 Review Sample Final Exams (These are available oncourse
Web site. Answers are also available
there.)
Dec 18(Mon) from9:00 am to11:100 am
Final Exam Room 306 (cohort B)Room 312 (cohort D)
