Georgia State University

J. Mack Robinson College of Business, Department of Finance

MBA 8135
Corporate Finance
Course Syllabus Spring 2009

NOTE: It is your responsibility to read, understand and abide by all of the course information and policies
listed below. Failure to do so could result in your failing of this course or of your being administratively
withdrawn from the course by your instructor, by the Department of Finance, or by the Robinson College of
Business. This course syllabus provides a general plan for the course; deviations may be necessary.

Course Sections:
The following table lists all sections of MBA 8135 for this semester. Each section has a unique Course Number. Be
sure to check your registration record on the GOSOLAR online system to locate the correct time and location for
your specific class and Instructor.

CRN Days Time Instructor Location

16721 M 04:30 pm-07:00 pm Charles W. Hodges Online
16718 T 07:15 pm-09:45 pm Alfred Mettler Alpharetta Center
16720 W 07:15 pm-09:45 pm Milind Shrikhande Aderhold Learning Center 224
16717 R 04:30 pm-07:00 pm Alfred Mettler Brookhaven Center

Course Coordinator:
The course coordinator is Dr. Alfred Mettler, he oversees all sections of the course. If you have general
questions concerning the course or the course syllabus, you can contact Dr. Mettler via e-mail at
[email protected] . For all questions specific to your section of the course, contact your instructor. Your
instructor will inform you of his/her office hours and provide you with specific contact information on the first
day of class.

Course Prerequisites/Corequisites:
Prerequisites: MBA 8000, MBA 8025.
CSP: 1,2,3,6,7,8.
All students, regardless of degree program, must have completed the appropriate prerequisites listed above with
a grade or "C-" or better.
Corequisites: MBA 8015, MBA 8030.
Either or both of these courses can be taken simultaneously with MBA 8135.

Students with disabilities:

Students who wish to request accommodation for a disability may do so by registering with the Office of
Disability Services in Suite 230 or the Student Center. Students may only be accommodated upon issuance by
the Office of Disability Services of a signed Accommodation Plan and are responsible for providing a copy of
that plan to instructors of all classes in which an accommodation is sought.
Georgia State University MBA 8135: Corporate Finance, Spring 09

Purpose of the course:

This course focuses on the financial management of both publicly held and private corporations. Students are
presented with a conceptual framework for understanding and addressing problems commonly faced by
corporate decision-makers and provided opportunities to apply these concepts to contemporary business
situations. All topics reflect the impact on the overall value and risk of the company. Topics covered include,
but are not limited to: time value of money, the valuation and role of debt and equity, capital acquisition and the
organization of financial markets, the relationship between risk and return including the capital asset pricing
model, capital budgeting/project evaluation techniques, cost of capital, cash flow estimation, project risk
analysis, real options and company valuation. All topics are presented from a perspective that will enable the
corporate manager to better understand how corporate decisions impact the value and risk of the firm.

A. COURSE MATERIAL
Required Text:
McGraw Hill Primis Online custom published book for MBA 8135 - Corporate Finance. A hard copy of the
book can be purchased from the GSU bookstore or you can order the course text as an eBook from Primis
Online (see https://ebooks.primisonline.com/eBookstore/eBookOptions.jsp for a complete description of the
Primis eBook program). The custom book includes selected chapters from the following two textbooks:
• Fundamentals of Corporate Finance, Eighth Edition, by Ross, Westerfield and Jordan (McGraw Hill)
• Corporate Finance, Eighth Edition, by Ross, Westerfield and Jaffe (McGraw Hill)
The ISBN of the bookstore textbook is 978-0-390-80084-8.

To order an eBook, go to https://ebooks.primisonline.com/eBookstore/CustomEBooks.jsp, click NEXT, then

browse for USA, Georgia, Georgia State University, Corporate Finance, MBA 8135. Once you locate the book,
follow the purchase instructions.

Financial Calculator:
It is necessary that you have a financial calculator to use throughout the course and that you bring it to each
class. Many end-of-chapter problems require complex arithmetic operations, and a financial calculator is
necessary to solve these problems efficiently. Recommended financial calculators are the Texas Instruments
BA II Plus, the Hewlett Packard 10B or 12C, the Sharp EL 733, and similar models. Approximate price: $35.

B. ATTENDANCE POLICY / ACADEMIC HONESTY

Attendance Policy:
Each student is expected to attend ALL scheduled class meetings for the entire duration of the class meeting.
An attendance sign-up sheet will be circulated each class period. It is your responsibility to sign the attendance
sheet. If you do not sign the list, you will be considered absent (see the note on academic honesty below).
Students arriving late may be permitted to sign the sheet only at the discretion of the instructor.

Any student who is absent from more than the equivalent of three classes will be dropped from the course.
Absences include the first week of class regardless of when a student registered for the course. If a student is
withdrawn for excessive absences after the midpoint of the grading period, a final grade of WF will be
assigned. There will be no exceptions to this policy!

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Georgia State University MBA 8135: Corporate Finance, Spring 09

An absence from class for any reason (job conflict, illness, appearance in court, transportation problems, etc.),
even if permitted and/or excused by your instructor, will count as one of the class absences against the three
class cumulative limit specified in the previous paragraph.

Academic Honesty:
The Department of Finance adheres strictly to the University's policy on academic honesty as contained in the
Academic Regulations section of the University catalog. Any student found copying during exams or quizzes,
signing someone else's name to the attendance list, using stored formulas in programmable calculators, using
non-authorized formula sheets or other notes during exams, collaborating on and/or copying any in-class or
take-home assignments, or the like will receive an F for the course and possibly be subject to additional
University disciplinary action.

No other electronic devices are allowed during quizzes and exams besides a financial calculator (see page 2).
Such prohibited items include laptops, personal digital assistants (PDA’s), text messaging systems and similar
devices. If you have any questions about the legality of your calculator, check with your instructor.

C. IMPORTANT COURSE INFORMATION AND POLICIES

Grade Weights:
Problem sets, group assignments, quizzes, etc. 35%
Mid Term Exam 30%
Final exam 35%
Problem sets, group assignments, quizzes etc. are allocated at the discretion of the instructor and will vary by
class section and semester. Your instructor will explain this component of your grade in detail during the first
week of class.
All course grades, once assigned, are final and cannot be changed except in the rare event of a mathematical
miscalculation by the instructor.

Final Exam:
The final exam is cumulative and will be given on the day listed in the course outline. You must attend the final
exam on the scheduled date or you must apply for a final exam variance. To apply for a variance date for your
final exam, read and carefully follow the instructions in the Memorandum from the Chairman of the Finance
Department (last 2 pages of syllabus).

Grading Policy - Department of Finance:

In accordance with Departmental policy, for masters level courses (MBA and FI prefixed), it is expected that no
more than 35 percent of the students in a given class section will receive a grade of A+, A, or A-. The majority
of the remaining students are expected to receive grades of B+, B, or B-. Those students demonstrating
significantly lagging performance shall earn grades at the C-level or lower as appropriate.
The finance department employs the +/- grading system. A “C-“ is considered a passing grade for this course
and a C- is considered passing for prerequisite purposes for this course as well as for all finance electives. Refer
to the University catalog for information concerning +/- grading and quality points for GPA calculations.

Course Evaluation:
Your constructive assessment of this course plays an indispensable role in shaping education at Georgia State.
Upon completing the course, please take the time to fill out the online course evaluation.
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Georgia State University MBA 8135: Corporate Finance, Spring 09

D. TENTATIVE COURSE OUTLINE

This outline provides a general plan for the course; deviations may be necessary

Week Topics to be covered Textbook Chapter

1 Course Policies and Overview Read Course Syllabus
An Introduction to Corporate Finance Text 1.1 & 1.2
- Principles of Value
• Cash Flow
• Timing
• Risk
Goal of Financial Management Text 1.3
Conflicts between company stakeholders Text 1.4
Flow of Capital and Financial Markets Overview Text 1.5

2 Time Value of Money - Introduction

- FV and Compounding Text 5.1
- PV and Discounting Text 5.2
- More About Present and Future Values Text 5.3

3 Time Value of Money - Advanced

Multiple Cash Flows and Using a Financial Calculator Text 6.1
Also see: http://iit.ches.ua.edu/fincal/cal/calculator.html
Additional TVM Issues: Text 6.2 & 6.3
- Perpetuities
- Annuities
- Cash flow series
- Semi-annual compounding
- Business applications (e.g., amortized loans)

Valuation Application – Bonds Text 5.1 – 5.3

- Characteristics of debt
- Characteristics of bonds as a specific type of debt
- Bond valuation
- Bond concepts and relationships

4 Valuation Application - Stock

- Constant growth valuation model Text 5.4
- Parameter estimates Text 5.5
- Growth opportunities and PVGO model Text 5.6 & 5.7

5 Investment Rules
- NPV Text 6.1
- Payback Text 6.2
- IRR Text 6.5 & 6.6
The Practice of Capital Budgeting Text 6.8

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Georgia State University MBA 8135: Corporate Finance, Spring 09

6 Identifying relevant cash flows of a project Text 7.1

Project Analysis and Valuation Text 7.2
Inflation and Capital Budgeting Text 7.3 & 7.4

7 Capital Budgeting and Risk

Sensitivity analysis and scenario analysis Text 8.1
Real options Text 8.3

8 Mid Term Exam

9 Risk and Return – Introduction

- Returns and return statistics Text 9.1, 9.2 & 9.3

10 Risk and Return – continued

- Risk and risk statistics Text 9.4 & 9.5
- Characteristics of Portfolios

11 The Capital Asset Pricing Model (CAPM)

Measuring Return, Variance and Covariance Text 10.1 & 10.2
Portfolios Text 10.2
Diversification, Equilibrium and CAPM Text 10.6, 10.8 & 10.9

12 Risk, Cost of Capital and Capital Budgeting

Cost of Equity Capital Text 12.1, 12.2 & 12.3
Example Text 12.5 & 12.6

13 Cost of Capital / Capital Budgeting: Examples and Applications TBA

Capital structure Handouts

- Perfect Markets, Irrelevance Proposition

14 Capital Structure (contd.) Handouts

- Financial Distress Costs
- How firms establish capital structure
- Capital structure theories

15 Special Topic Session TBA

Review and Synthesis

Course Comprehensive Final Exam, Saturday, May 2, from 12:30 pm to 2:30 pm

Classroom/Location to be announced in class

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Georgia State University MBA 8135: Corporate Finance, Spring 09

MEMORANDUM

To: Students Enrolled in MBA 8135

From: Chairman - Department of Finance
Semester: Spring 2009
Subject: MBA 8135 course policies

a) Attendance for Final Exam

The Department of Finance schedules common, Department-wide final examinations in MBA 8135. The Final
Exam for this semester is scheduled for Saturday, May 2, from 12:30 p.m. to 2:30 pm.

Variances granted from the common final examination date are undesirable for obvious reasons. Intrinsically,
early examination exposes any student to question, even if innocent, when cheating is discovered. The penalties
for cheating are severe; consult GSU’s Graduate Bulletin for specific university regulations. Core courses are
offered each semester. Therefore, if you foresee a personal conflict with the examination date please register for
the course in a later semester. Only the Department Chairman grants variances for the final examination date;
permission granted by others will not be honored.

Guidelines for requested variance:

1. Requests for variance must be received in the Department's office a least one-week prior to the midpoint
in the semester in which you are taking the course. This lead-time will allow for course withdrawal in
the event of the denial of a variance request. Semester midpoint dates can be found at:
http://www.gsu.edu/academic_calendar.html
2. A letter must be written to the Chairman and must be supported by additional documentation regarding
the student's conflicting obligation. Job conflicts are to be supported by a letter from the student's
supervisor on company stationary. Variances for students involved in the wedding of an immediate
family member will be considered. Others will not. Copies of a wedding invitation and statement of
kinship must support those considered.
3. The letter to the Chairman should include your social security number, telephone number, address,
name of instructor, and course section. It should be mailed or faxed to the Chairman of the Department
of Finance, Robinson College of Business, P.O. Box 3991, Atlanta, Georgia 30302-3991 (Fax: 404-413-
7312).
4. If a variance request is approved, the Department will determine the date and site of an alternate
examination. It is Departmental policy that an alternate examination will be scheduled at an earlier
rather than a later date.

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Georgia State University MBA 8135: Corporate Finance, Spring 09

b) Attendance for Scheduled Examinations (other than the final exam):

The GSU Graduate Catalog states: "…Students must be present for announced quizzes, laboratory periods, or
final examinations unless the reasons for the absences are acceptable to the professors concerned...”
A student who cannot take a scheduled exam (other than the final exam) must comply with the following
guidelines:
1. A formal request for permission to be absent from an exam should be submitted to the instructor in
advance of the examination, if possible. If circumstances preclude an advance request, a formal request
for an excused absence must be submitted to the instructor within seven (7) days of the date of the
missed examination.
2. A formal request for advance permission to be absent or to excuse an absence that has already occurred
must take the form of a letter to the instructor supported by additional written documentation of the
conflicting situation that interferes with attendance at the examination. For example, job conflicts are to
be documented by a supervisor’s letter on company stationary; military reserve conflicts are to be
documented by a copy of orders to duty; health conflicts are to be documented by the written statements
of a health professional; conflicts because of attendance to funerals or weddings are to be documented
by copies of obituaries or wedding invitations.
3. No "makeup" exams during the semester will be given in this course. If any exam is not taken as
scheduled and if the absence is excused, then the grade weight(s) of the missed exam(s) will be
transferred to the final examination.
4. An examination score of 0 will be given if the instructor does not permit or excuse an absence from the
exam discussed above. Absence from any exam, even when permitted or excused will count as one of
the class absences against the limit specified in the previous section on "Class Attendance."

c) Withdrawal:
Grades at withdrawal are determined in strict compliance with policies stated in the Graduate Catalog. A grade
of "W" indicates that a student, doing passing work, was permitted to withdraw from the course. A grade of
"WF" indicates that the student:
1. Voluntarily withdrew from a course before the midpoint for the grade period while doing failing work,
2. Was involuntarily withdrawn from a course before the midpoint of the grading period while doing
failing work,
3. Voluntarily withdrew from a course after the midpoint of the grading period and was not awarded a
hardship withdrawal, or
4. Was involuntarily withdrawn from a course after the midpoint of the grading period and was not
awarded a hardship withdrawal.

d) Examinations:
Material from the text chapters, class handouts, end-of-chapter problems, supplemental problems, cases, and the
prerequisites may be covered on the exams, whether or not specific coverage in class has occurred.

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