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BAF104: Advance Finance


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This is an advanced course in financial management that covers more complex aspects of financial decisions such as medium to long term investments, capital budgeting, debt versus equity financing, cost of capital, valuation, among others. These concepts are applied to both financial and non-financial enterprises.

MIRIAM COLLEGE
College of Business, Entrepreneurship and Accountancy
Business Administration Department
 

COURSE OUTLINE
1st Semester, SY 2009-2010
Instructor:  ­­­­­­L.B. Araneta
 

 
Course Code:                          BAF-104         
 
Course Title:                           Advanced Finance      
 
Course Description:               This is an advanced course in financial management that covers more complex aspects of financial decisions such as medium to long term investments, capital budgeting, debt versus equity financing, cost of capital, valuation, among others. These concepts are applied to both financial and non-financial enterprises.   
 
Credit:                                     3.00
 
Prerequisite:                           Financial Management
 
Required Textbook:               Any Financial Management/Finance Textbooks
Other Resource:                    Lecture Notes
 
References:                           Finance Journals.
                       
Course Objectives:                 At the end of the course, the students are expected to have a thorough background on the topics, acquire knowledge on and understand how very important financial management decisions are critical to the operations and sustainability of these enterprises.
 
REQUIREMENTS:                Project Paper (Approved topic in Finance)
                                            Long Tests
                                            Graded Recitation
                                            Attendance
                                            Final Exam
  
Course Content:
 
Wk
No. of Hrs
Topic
Strategy/
Methodology
Skills
Values
Student Output
 
1
 
0.5
 
Discussion of the Course Requirements
 
Open discussion
 
Listening
 
Discipline; respect
 
Feedback
 
1-2
 
 
5.5
 
Basic Financial Concepts
 
Refresher on Time Value of Money
 
Lecture; recitation
 
Listening; synthesis; critical thinking
 
Discipline; respect; responsibility
 
Feedback; recitation; critique
 
3-5
 
6
 
Risk and Return
Ø Risk of a Single Asset
Ø Risk of Portfolio
Ø Correlation and Diversification
Ø CAPM
 
Lecture; recitation
 
Listening; synthesis; critical thinking
 
Discipline; respect; responsibility
 
Feedback; recitation; critique
 
6-8
 
 
8.5
 
Valuation
Ø Bond
Ø Stock
 
Lecture; recitation
 
Listening; synthesis; critical thinking
 
Discipline; respect; responsibility
 
Feedback; recitation; critique
 
9-10
 
 
6
 
Cost of Capital
Ø Overview
Ø Cost of Long-Term Debt
Ø Cost of Preferred Stock
Ø Cost of Common Stock
Ø Weighted Average Cost of Capital
 
Lecture; recitation
 
Listening; synthesis; critical thinking
 
Discipline; respect; responsibility
 
Feedback; recitation; critique
 
11-13
 
 
9
 
Capital Budgeting
Ø The Capital Budgeting Decision Process
Ø Terminology
Ø NPV
Ø IRR
Ø Introduction to Risk in Capital Budgeting
Ø Behavioral Approaches to Risk
 
Lecture; recitation
 
Listening; synthesis; critical thinking
 
Discipline; respect; responsibility
 
Feedback; recitation; critique
 
14-15
 
 
6
 
Leverage and Capital Structure
Ø The Firm’s Capital Structure
Ø EBIT-EPS Approach to Capital Structure
Ø Choosing the Optimal Capital Structure
 
Lecture; recitation
 
Listening; synthesis; critical thinking
 
Discipline; respect; responsibility
 
Feedback; recitation; critique
 
16-17
 
 
6
 
Dividend Policy
Ø Dividend Fundamentals
Ø The Relevance of Dividend Policy
Ø Factors Affecting Dividend Policy
Ø Types of Dividend Policies
Ø Other Forms of Dividends
 
Lecture; recitation
 
Listening; synthesis; critical thinking
 
Discipline; respect; responsibility
 
Feedback; recitation; critique
 
18
 
 
2
 
Final Exam
 
Exam
 
Acquired Learnings
 
Academic honesty
 
Final Exam
 
 EXPECTATIONS FROM STUDENT:
 
The student’s responsibility is to come to each class prepared. She is also expected to take all examinations on the dates schedule. She should read the assigned problems prior to class. She is expected to attend each class and participate actively in the discussions.
 
 ACADEMIC DISHONESTY
 
All students are expected to be academically honest. Cheating, lying and other forms of  unethical behavior will not be tolerated. Any student found guilty of cheating in examinations or plagiarism in submitted course requirements will receive an F or failure either in the course requirement or in the course. Plagiarism refers to the use of books, notes or other intellectual property without giving proper attribution to its author, or representing the work of another person as one’s own;  Cheating refers to securing help in a test; copying tests, assignments, reports or term papers; collaborating with other students during an examination or in preparing academic work; signing another student’s name on an attendance sheet; or otherwise practicing scholastic dishonesty
  
GRADING:        Class Participation                              10%
                        Attendance                                           5%
                        Long Tests                                           30%                    
                        Project Paper                                      25%
                        Final Exam                                          30%                      *Passing Mark is 65%
                                                                                    -------
                                                                                    100%
 
CONSULTATION HOURS: Sat, 11:00 – 11:30 a.m., CAR 209