The University of Texas at Dallas

School of Management
FINANCE 6301: FINANCIAL MANAGEMENT
Spring 2006
Section 502: Wednesday 7:00 – 9:45 pm in SOM 2.115

Instructor: Dr. Carolyn Reichert

Office: SOM 1.506
Phone: 972-883-2726 (Office)
Fax: 972-883-6164
Office Hours: Tuesday after class and by appointment
E-mail: carolyn@utdallas.edu

Required Text : Stephen A. Ross, Randolph W. Westerfield, and Jeffrey Jaffe, Corporate
Finance, 7th ed.; McGraw-Hill Irwin Co., 2005.

Lecture notes and homework assignments will be posted on WebCt. Homework

solutions will be available after the due date.

Other: The course involves substantial financial and statistical calculations. Excel and a
financial calculator are required. Recommended financial calculators are the Hewlett-
Packard 10B or the Texas Instruments BAII plus. These calculators have all of the
functions that you need for the course. Other calculators require pre-approval of the
instructor. The text contains time value of money tables. Weekly practice sets
(including solutions) will be available on-line.

Prerequisites: Accounting 6305 (or 6301) and Statistics 5311. A working knowledge of a spreadsheet
package such as Excel is also helpful.

Catalog Description: Theoretical and procedural considerations in the administration of the finance
function in the individual business firm; planning, fundraising, controlling of firm
finances, working capital management, capital budgeting and cost of capital.

Objectives: This course provides an introduction to corporate financial decision making. The course
starts with time value of money and selecting capital investment projects. Additional
topics include analysis of the risk-return trade-off, corporate financing decisions,
dividend policy and options. The course uses accounting, economics, mathematics and
statistics as tools in investigating these issues.

Learning Outcomes:
• Understand how financial decisions are made
o Develop a fundamental understanding of the goal of financial management
and the important theories and practices that achieve this goal.
o Develop skills at understanding, analyzing and solving financial problems.
• Gain skills at financial analysis and the quantitative methods applicable to financial
decision-making.
• Emphasize financial theories, the practical application of those financial theories,
analytical tools and decision-making principles.
Evauation: For all written work, your work must be legible, and your answers will be evaluated based
on your ability to organize your knowledge relative to the rest of the class.

Midterm Examination 30%

Final Examination 40%
Team Assignments: Best 8 out of 10 30%
100%

Examinations: Exams include a variety of questions and problems. You are to do your own work on the
exams. Students who provide an answer without supporting work will receive no credit for the problem.
Each student is allowed to use a financial calculator during the exam. Students are not allowed to use cell
phones, any wireless device or other communication methods during the exam. Conflicts with an
examination must be approved prior to the examination date. Practice problems enhance your
understanding of the material and serve as valuable preparation for the exams.

Team Assignments: There are ten team problem sets. They give you an opportunity to discuss concepts
and problems with other students in the class. The team problem sets also introduce you to some of the
financial applications available on the computer. This allows you to work more realistic and complex
problems that are frequently encountered in the financial decision-making process. A spreadsheet and a
word processor are recommended for the problem sets. Each team is required to develop their own
spreadsheet solution from scratch for each problem. Answers must be legible. Late assignments will not
be accepted.

Material and Class Attendance: It is important to realize that the topics are not separate units; the
material builds throughout the semester. In addition to new terminology and concepts, much of the
material is analytical in nature and requires a period of time to absorb. It is imperative that you read the
text and work problems before class. Attendance at all classes is expected unless there are compelling
reasons that prohibit attendance. Punctual and regular attendance is crucial. Each student is
responsible for all lecture notes and announcements made in class. Students should exhibit civil
behavior during class.

UTD 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. “Turnitin.com” will be
used to screen papers against other published works to insure against plagiarism.
 Course Outline and Assignment Schedule

Class Topic Readings To be handed in

1: 1/11 Overview & Introduction Ch. 1, 2, 3
2: 1/18 Time Value Ch. 4 Team Problems 1
3: 1/25 Security Valuation Ch. 5, 14 Team Problems 2
4: 2/1 Capital Budgeting Ch. 6, 7 Team Problems 3
5: 2/8 Capital Budgeting & Cash Flow Ch. 7, 8 Team Problems 4
6: 2/15 Risk and Return Ch. 9, 10 Team Problems 5
7: 2/22 Risk and Return Ch. 10, 11 Team Problems 6
8: 3/1 Midterm Examination Covers Ch. 1-9, 14 Individual Midterm
3/8 SPRING BREAK
9: 3/15 Capital Structure Ch. 15, 16
10: 3/22 Capital Structure Ch. 15, 16 Team Problems 7
11: 3/29 Capital Budgeting and Capital Structure Ch. 12, 17 Team Problems 8
12: 4/5 Options Ch. 22, 23 Team Problems 9
13: 4/12 Dividends & Working Capital Ch. 18, 26 Team Problems 10
14: 4/19 Review
15: 4/26 Final Examination Individual Final