Robert H.

Smith School of Business, University of Maryland

BUSI 640 Financial Management
Professor Ethan Cohen-Cole
E-mail: ecohencole@rhsmith.umd.edu

Office: 4420 VanMunching Hall

Course Description and Objectives

BUSI 640 is an introductory course in corporate financial management. The course outlines the financial
concepts and techniques used to evaluate corporate decisions. The topics include the time value of money,
estimating opportunity costs of capital, valuation of common securities, discounted cash flow, market
efficiency, capital structure, and an introduction to options. The objectives are to introduce the language
and structure of finance and to develop the ability to analyze financial decisions.
Course Materials
The required text, which I suggest reading in preparation for the lecture as well as using as a reference is:
(i)

Corporate Finance with MyFinanceLab, 2nd Edition, Jonathan Berk and Peter DeMarzo.
Henceforth, this book will be referred to as BD. The MyFinanceLab course code is XL0H-V1YE601Y-9UB2.

Course Requirements and Grading

The material in this course will be presented predominately in lecture format, supplemented with cases. To
get the most out of the course and to promote the sharing of ideas, participation on the part of all students is
expected. I expect you to attend each class and to be well-prepared.
Your grade will be determined by the course pre-work, a group case assignment, two group problems sets,
the valuation assignment, the midterm exam, and the final exam. The midterm exam will be a take-home
exam that is due on September 26. The final exam will be a take home due on October 19. The exams will
not be given after these times. If you cannot take the exams at these times, make arrangements with me to
take the exam at an earlier time. The exams are open-book, open-note. You may use a calculator and your
computer.
For the cases and problem sets, you may work in groups. The company valuation and exams are individual
assignments.
Suggestions for the Preparation of Case Reports and Case Classes
Case write-up are due at the beginning of the class that we discuss the case. For the case, I am looking for
your group to answer the questions accompanying the case on Blackboard. Submissions should include
copies of relevant Excel spreadsheets.
In general, I am looking for a written report justifying your ultimate recommendation. Clearly state and
explain any assumptions you make in your analysis. State your specific recommendation and fully develop
the logic supporting it. Do not attempt to hedge your bets or be wishy-washy. In general, the reports should
not be more than 3 type-written, double spaced pages (excluding exhibits, if any). Brevity is a virtue 3

pages is a maximum, not a minimum. Do not repeat the facts of the case I have read it. The case reports
should be written in essay form. It should be written with an employer or client in mind as your intended
audience.
Keep a copy of your answers as you will be expected to contribute to the class discussion based on your
written answers.
Blackboard and MyFinanceLab
Course materials such as lecture notes, homework questions, supplemental problems and solutions, case
questions, and the valuation assignment are posted on Blackboard and/or MyFinanceLab. Check here for
any updates to course materials and for announcements in between class meetings.
Ethics and Sustainability
Finance is about the trade-off between earnings / cash flows today versus earnings / cash flows in the future.
It is also about understanding that the financial decisions a firm makes have impacts on the firm, its
employee, clients, customers, community and other stakeholders. The objective of this course is to
understand how to evaluate that trade-off, recognizing the ethical dilemmas that sometimes arise when
different stakeholders have different time horizons and different interests.

Academic Integrity
The University's Code of Academic Integrity is designed to ensure that the principles of academic honesty
and integrity are upheld. All students are expected to adhere to this Code. The Smith School does not
tolerate academic dishonesty. All acts of academic dishonesty will be dealt with in accordance with the
provisions of this code. Please visit the following website for more information on the University's Code
of Academic Integrity:
http://www.inform.umd.edu/CampusInfo/Departments/JPO/AcInteg/code_acinteg2a.html
All discussions about the case assignments are to be limited to your group. Plagiarism (see code above for
definition) is not condoned or allowed in any way. Materials such as case reports from other groups or
those from previous years are not to be consulted. Individual assignments are to be done by you. You are
accountable for understanding how every component of the assignment was generated. You will be asked
to certify compliance with the Code of Academic Integrity on each exam turned in by writing out and
signing the following pledge:
"I pledge on my honor that I have not given or received any unauthorized assistance on this
exam/assignment."
All sources used must be properly referenced using Smith School approved citation style. See link below
for citation style guidance and examples. Click on the links to Business and the NetLibrary e-version of
the AMA Style manual. http://www.lib.umd.edu/guides/style_manuals.html
Special Needs
Any student with special needs should bring this to the attention of the instructor as soon as possible, but
not later than the second week of class.