Hong Kong University of Science and Technology School of Business and Management Department of Finance Syllabus: FINA 110

Fundamentals of Business Finance Summer 2011 (Tentative)

Instructor: DU, Qianqian Email: dqqmm@ust.hk Office Address: 4383 Tel: 2358 8031 Office Hours: By appointment Class time and duration: Mondays, Wednesdays & Friday, 10:00 11:50am From June 13 to August 3, 2011 Course Website: http://lmes2.ust.hk Course Content: This is an introductory finance course for non-business major students. The objective of the course is to help students understand the basic concepts and learn elementary analytical techniques in finance. Many topics will be covered in the course, including financial statements and cash flows, time value of money, discounted cash flows, valuation for stocks and bonds, capital budgeting, risk and return, cost of capital, capital structure, dividend policy, and portfolio strategy. Reading textbook: 1. Required Textbook: Corporate Finance Essentials by Ross, Westerfield and Jordan, McGraw Hill International Edition, seventh Edition, 2011. 2. Supplementary Textbook: Financial Market and Corporate Stragety by Grinblatt and Titman, McGraw Hill International Edition (You dont have to buy it. This book is for your further study.) Grade: 1. Examinations (70%): The course has two examinations: midterm(30%) and final exam (40%). The midterm will cover the materials in the first half of the course. The final examination will be cumulative; that is, it will cover all the materials, but with a heavier weight on the material covered in the second half of the course. I will not give

makeup midterm exam because it is impossible to make an equivalent midterm or final exam without placing the student at either an advantage or disadvantage. If you have a legitimate excuse to miss the midterm, your final exam will weight 80% in your final grade. 2. Cases (20%): There will be two group cases assigned in this course. Each group should have 3-5 members. Groups are formed mainly based on your preference and let me know your group members before June 20, 2011. I will assign students who dont form group randomly into groups after that deadline. To be posted Hardcopy submission Case #1 (10%): June 21 by 10:00 am July 6 Case #2 (20%): July 7 by 10:00 am July 30 3. Class participation (10%): Class participation is highly encouraged and valuated. You are welcome to ask any questions during or after the class. You are also encouraged to answer class questions raised by me. 3. Homework Assignments: After each lecture, selected end-of-chapter intermediate-level Questions and Problems from the textbook will be assigned as homework to the class. The assignments are primarily for practice and for testing your understanding of the material, especially the more difficult concepts. You are not required to submit your homework. Solution to the problems will be provided on the course website. I will also discuss some difficult problems in the class. Class manners: Please attend class on time, turn off cell phone and not talk privately during the class. If you cannot attend the class, please send me email before the class with a valid reason. Full class attendance is encouraged. If you miss 6 classes or more, you may receive an F unless you receive a course grade of A or above. Useful websites: 1. Online Learning Center (OLC) at the Publishers Website: www.mhhe.com/rwj & Self-Study Software: The OLC provides access to additional web-based study materials for the textbook. The Self-Study Software contains self-grading questions for testing your knowledge of the materials in different chapters. 2. Other Reference Websites: The textbook makes reference to some interesting financial websites which contain a lot of financial information on the US markets and companies. As finance is global in practice, it is useful to familiarize yourself with these sites as referred to in the textbook. For financial matters of local interest, you may consult the following sites: www.hkex.com.hk; www.sfc.hk.

FINA 110 Summer 2011: SCHEDULE OF CLASSES (Tentative to be adjusted)

No. 1 2 3 4 5 6 7 8 9 10 11 12 13 Class Monday, June 13, 2011 Wednesday, June 15, 2011 Friday, June 17, 2011 Monday, June 20, 2011 Wednesday, June 22, 2011 Friday, June 24, 2011 Monday, June 27, 2011 Wednesday, June 29, 2011 Friday, July 1, 2011 Monday, July 4, 2011 Wednesday, July 6, 2011 Friday, July 08, 2011 Monday, July 11, 2011 Topics I: Overview of Financial Management; II: Introduction to Financial Statement (a) I: Working with Financial Statement (b) I: Working with Financial Statement (c) II: Time Value of Money (a) I: Time Value of Money (b) II: DCF Valuation (a) I: DCF Valuation (b) I: Interest rate and bond valuation I: Stock market and equity valuation I: Comparing NPV and other valuation methods; II: Capital Budgeting & Investment Decision (a) Public Holiday I: Capital Budgeting & Investment Decision (b) I: Capital Budgeting & Investment Decision (c) Mid-term Exam I: Introduction of some stylized facts of financial market II: Introduction to risk and returns (statistics) III: Discussion of Case Study One 14 15 16 17 18 19 20 21 22 23 Wednesday, July 13, 2011 Friday, July 15, 2011 Monday, July 18, 2011 Wednesday, July 20, 2011 Friday, July 22, 2011 Monday, July 25, 2011 Wednesday, July 27 2011 I: Risk and returns (a): Portfolio Theory II: Risk and returns (b): CAPM I: Cost of Capital (a) I: Cost of Capital (b) I: Capital Structure (a) I: Capital Structure (b) II: Dividend Policy & Repurchase Case Two: Presentation (a) Case Two: Presentation (b) Special Topics

Friday, July 29, 2011 Special Topics Monday, August 01, 2011 Review for the Final Exam Wednesday, August 03, 2011 Final Exam