GONZAGA-IN-FLORENCE SYLLABUS

Course title: Principles of Finance

Semester: Spring 2015
Course Code: BFIN320
Instructor: Alessandro Giannozzi, PhD
Classroom number: TBA
Scheduling: Monday 5:35-7:00 and Wednesday 5:35-7:00
Credit hours: 3 credit course
Office hours: by appointment
Mobile phone: +39 3397038602
Email: alessandro.giannozzi@unifi.it
Course description and objectives:
This is an introductory course in financial management and corporate finance. The course
has three main objectives:
1) Develop an understanding of the tools that are used to value investment projects
and companies (capital budgeting).
2) Understand the basic issues involved in how firms should raise funds for their real
investments (financing).
3) Evaluate how investment and financing decisions are related.
Topics covered include: financial statements and financial analysis, cash flows, time value
of money, risk and rates of return, valuation of stock and bond, investment and capital
structure decisions for the firm.
Course materials:
Textbook (required):
Damodaran A. (2015), Applied Corporate Finance, John Wiley & Sons, 4th edition (3rd edition
is also ok)
The relevant chapters are indicated in the course schedule.
Lecture Notes/Slides (required):
We will use lecture notes. The lecture notes will be distributed after each class by email.
Case Studies (required):
We will cover one case study in this class. I will announce in class when you should start
working on the case study.
The cases are group projects. You can work in groups of 3/4 students. You can choose
your group yourself.
You are expected to read the case and discuss the case with your team members. I will
hand out detailed instructions and questions for each case. Each group must hand in a
solution in class which will be graded between 10 points and 15 points. Also, each group
must prepare an in class presentation.

.
Problem Sets (required):
We will have 3 problem sets throughout the semester. The problem sets are intended to
help you understand the lectures and prepare yourself for the type of questions asked in
the exam. I will announce in class when we have a new problem set. The problem sets will
be distributed in class and are due one week after they are distributed.
You are welcome to work in groups or alone on the problem sets. However, you need to
write up your individual solution.
If you hand in fewer problem sets, I will deduct 5% from your grade for each problem set
missed. The problem sets are grades pass/fail. If a problem set is graded fail, I will deduct
2% from your grade.
Exams and grading:
There will be a midterm and a final exam. Both exams are closed book and closed
notes.
Midterm: February 22, 2016
Final: April 18, 2016
Course Requirements
Attendance and Participation
10%
Problem sets
15%
Case
15%
Midterm exam
25%
Final exam
35%
All exams are graded according to a grading schedule, which awards points for completing
specific steps of a question and deducts points for mistakes. I use a grading schedule to
ensure that all students are treated fairly.
Grades Conversion
Version I
A= 94-100
A - = 90-93
B+ = 87 89
B= 84-86
B- = 80-83
C+ = 77-79
C = 74-76
C- =70-73
D+ = 67-69
D = 65- 66
F = below 65

Version II
93,6-100
89,6-93,5
86,6 89,5
84,6 -86,5
79,6 -84,5
76,6 79,5
73, 6 76,5
69, 6 73,5
66, 6 69, 5
64, 6 66, 5

Significance for the final grade of attendance and participation

A: the student has no absence, is punctual and respectful with the professors and the
classmates, is always prepared for class (has done the reading and writing assignments);
He/she vividly participates in class discussions and contributes with interpretations which
prove fine critical sense and creativity, using a grammatically correct, semantically rich and
conceptually clear language.
B the student is respectful and punctual, is prepared for class, participates in discussions,
has a good level of understanding the issues under focus and an appropriate use of
language.
C has a adequate but schematic or superficial understanding of the texts and issues under
focus, is not always prepared for class, uses a simple language.
Calculator:
Please bring a calculator to class. You will need the calculator to follow the examples we
do in class and to solve exams. There are no restrictions regarding the type of calculator
you may use. Any calculator in which you can compute powers like xy will do the job.
Course Schedule:
To prepare yourself for a lecture, please read the corresponding chapters in the textbook
and review the lecture notes after we discussed them in class. This is the outline for the
lectures:

Dates

Time

Jan. 11

17.45-19.15

Book
Chapter/material
s
Ch. 1

Topic

Jan 13
Jan 18
Jan 20
Jan 25
Jan 27

17.45-19.15
17.45-19.15
17.45-19.15
17.45-19.15
17.45-19.15

Ch 1
Lecture notes
Lecture notes
Lecture notes
Ch. 3

The principles of corporate finance

Financial statement and free cash flow
Financial analysis and ratio analysis
Operating and financial leverage
The investment principle: estimating hurdle
rates

Feb. 1

17.45-19.15

Ch. 3

Feb. 3

17.45-19.15

Ch. 3

Feb 8
Feb. 10

17.45-19.15
17.45-19.15

Ch. 4
Ch. 5

Feb 15
Feb. 17

17.45-19.15
17.45-19.15

Ch. 5
-

The investment principle: estimating hurdle

rates
The investment principle: estimating hurdle
rates
Capital asset pricing model and cost of debt
The investment decision and the time value
of money
The investment decision rules
Simulation of midterm exam

Feb. 22
Feb. 24
Feb. 29
Mar. 2
Mar. 7-11
Mar. 14

17.45-19.15
17.45-19.15
17.45-19.15
17.45-19.15
17.45-19.15

Ch. 5
Ch. 7
Ch. 7

Course overview and the goals of corporate

finance

Midterm exam
Review of midterm exam
The investment decision rules
Financing decision. Introduction
No class - Spring break
Financing decision: the capital structure
decision

Mar. 16

17.45-19.15

Ch. 7

Financing decision: the capital structure

decision
Financing decision. The trade off of Debt

Mar. 21

17.45-19.15

Ch. 7

Mar. 23

17.45-19.15

Ch. 8

The capital structure. The optimal financing

mix - Financing decision. The ways to find
the optimal financing mix

Mar. 30
Apr. 4

17.45-19.15
17.45-19.15

Ch. 8

Ap. 6
Apr 11

17.45-19.15
17.45-19.15

Ch. 10
Ch. 10

In class case presentation

The capital structure. The ways to find the
optimal financing mix
Dividend policy
Dividend policy

Apr. 13

17.45-19.15

Simulation of final exam

Apr. 18
17.45-19.15
Final exam (all topics)
Apr. 20
17.45-19.15
Review of final exam and final grading
The course schedule is subject to change (please follow the announcements in class).

COURSE POLICIES:
Attendance Policy
Attendance is taken at the beginning of class from the first day of the semester. The
student entering class after attendance is taken has to contact the professor at the end and
announce his/her presence. However, this does not mean that coming late is accepted.
Two late arrivals may be excused, three turn automatically into an absence and will affect
the attendance and participation part of the final grade.
Students can miss one weeks work, irrespective of the course formula (three sessions, two
sessions, one session). It is their responsibility to make up for the missed work. If they
miss a quiz or a report they are not allowed to have it at another time, unless the absence
is for certified medical reasons and the professor and Dean agree.
More than one weeks work missed is going to be penalized as follows:
One extra absence:
1. by lowering the attendance and participation grade
Two extra absences
2. by lowering the final grade by a whole letter grade
Three extra absences
3. by grading the whole course F
Tardiness:
Students are expected to be in class on time. Only one or two delays will be tolerated
during a whole semester.
Decorum
Cell-phones off; no food and beverages admitted, except for bottled water. No technical
devices are accepted (laptops, I pads, etc).

Disrupting behavior (doing something else during the course, engaging in private
conversations, playing with electronic devices) is not accepted and if repeated it will
negatively affect the attendance and participation part of the final grade or may result in
removal from the course.
Academic Honesty
Academic honesty is essential to education and represents the bond of trust between the
university, the instructor and the student.
Academic dishonesty is any action by which a student seeks to claim credit for the
intellectual effort of another person or uses unauthorized materials or fabricated
information in any academic exercise. It includes unauthorized assistance in tests and
examinations; intentionally impeding or damaging the academic work of others; submitting
another persons work as your own, or providing work for this purpose; submitting work
of your own that has been substantially edited and revised by another person, or providing
such an editing and revision service for others; submitting material from a source (books,
articles, internet sites) without proper citation and bibliographic reference; paraphrasing
material from a source without appropriate reference and citation; submitting substantially
the same piece of work in more than one course without the explicit consent of all the
instructors concerned; assisting other students in any of the above acts.
Students who are academically dishonest will receive 0, zero on the work in question or
a failing grade for the course as a whole, depending on the importance of the work to the
overall course grade and the judgment of the instructor.
Plagiarism
Academic dishonesty can manifest itself in plagiarism, defined as claiming intellectual
property on somebody else's work, in other words as cultural theft. Written assignments
will be submitted to the plagiarism detection procedures of TurnItIn.com., activated on
Blackboard.
A plagiated assignment/paper, research project, etc will be graded 0 (zero) and sent to the
Main Campus accompanied by a report.
Special Accommodation for students with learning disabilities
Documented learning disabilities or other medically certified problems that need special
accommodation for any of the student's expected academic performances will be treated
with the due attention.