Hult International University

FINANCIAL MANAGEMENT IN THE INTERNATIONAL ENVIRONMENT

Fall 2011
INSTRUCTOR: Email Address: Office hours: Class times: Teaching Assistant: Course Description: The course is designed to develop the financial skills and logical thought processes necessary to understand and discuss financial policy decisions in a global economy. Specific objectives include developing an understanding of the time value of money, using financial statements in decision making, and understanding the nature of financial markets, the cost of capital, valuation of stocks and bonds, management of short-term assets, short-term and long-term financing, lease financing, capital markets, multinational financial management, and special topics in financial management. The impact of legal, social, technological, and ethical considerations on efficient economic outcomes is also stressed. A financial calculator is required and computer spreadsheet skills are developed. We will stress effective written and oral communication skills that are necessary for the design and implementation of financial decisions. Throughout the course we will emphasize best practices. Even though you may not expect to have a career in finance, you will find that finance is often viewed as the integrating discipline of management. It is relevant in all societies and economic systems, as well as in all types of organizations as well. For example, as a program manager in a not-for-profit organization, you will perform your job better if you have financial management skills. In addition, this course will help you manage your investment portfolio. Resources: Herb Meiberger, CFA Herb.Meiberger@Hult.edu

Mondays and Fridays, 11:45-12:45pm

See attached schedule. Eric Lau: Eric.Lau@Hult.edu

1) Textbook: Corporate Finance,

Berk & de Marzo, Second Edition, Pearson Publishing ISBN-13: 978-0-13-608943-8

ISBN-10:

0-13-608943-7

2) On-line homework assignments: In conjunction with the textbook, homework is

assigned using the MyfinanceLab on-line homework manager. See schedule that follows. Student subscription to this program is required. You must register and arrange for payment. The textbook is available online or in hard copy through the Myfinancelab website at a net competitive price (when you purchase the textbook along with your Myfinancelab subscription). Homework Key: XL0S-G1JP-601Y-5UB2

3) Business case course pack. A collection of business cases are assigned

throughout the semester, highlighting the concepts covered in class.

4) You are expected to read all chapters of the textbook and prepare all cases in
advance of the class for which they are assigned (except for the first week)

5) You are also strongly encouraged to read business publications, such as The
Economist, The Wall Street Journal, The Financial Times, on a regular basis. You should have and be able to use a financial calculator. The first choice is Hewlett Packard 10BII, second choice is Hewlett Packard 12C, and third choice is Texas Instruments BA II Plus. (Currently, CFA examinations allow HP12C and TI BA II Plus, but not HP 10BII.) For homework you may also choose to utilize a laptop computer running Excel. Note: For examinations, you will not be allowed to use your computer (laptops, etc.), but will be allowed to use your financial calculator. Class Ground Rules: In class, no laptops and other devices are permitted. In past classes, students access Facebook and other websites, distracting themselves and others. No food is permitted in the classroom. Students may bring drinks provided that there is a top on the container. There are many electrical outlets and spilled liquids can create electrical hazards. Course Format: This course will be presented in lecture and discussion format, with some use of cases and exercises to demonstrate the application of the principles developed. The basics of financial management are applicable to all disciplines and all managerial responsibilities and so must be mastered by all students in earnings a masters degree. As such, each student is expected to come to class fully prepared for every class period. Class content and discussion builds on the content of assigned reading and preparation and does not serve as an alternative to individual preparation. Prerequisite knowledge/Skills: This course presupposes:

A basic understanding of the following concepts and principles: Basic math skills including algebra. Excel proficiency. The context of business in the macro-economic environment.

Mastery of the following skills: Written and spoken English. Use of a financial calculator Understanding of time value of money, discounted cash flows. Learning Objectives: The course is intended to provide students with an understanding of: balance sheet accounts, income statements, cash flows, and financial ratios used in basic financial analysis the principles and concepts used in working capital management and long term financial planning the tools and techniques of time value of money capital budgeting techniques including cash flow estimation and risk analysis risk and return concepts Learning Outcomes: After completing this course the student will be able to:

Have mastered the following concepts and principles: o The role of financial management in organizations (I) o Time value of money (I) o The impact of risk and return relationships (I) o Standard capital budgeting analyses (I and II) o How assets are valued and traded in markets (I & II) o Methods and types of finances to fund firm investments (I and II) o DCF analyses (II) o Optimal Capital Structure (II) o How financial management can be utilized to create and sustain value such as EVA and MVA (II) Be familiar with the following o Concepts and principles: Gain insights into financial strengths and weaknesses from financial analysis and forecasts and recommend ways to improve financial performance (I and II) The roles of mergers, acquisitions and divestitures in creating value (II) The yield curve determinants, strip rates, forward rates (I and II) Exchange rate determinants, exchange rate risk (II) 3

The basics of financial derivatives: Options, futures, forwards, swaps (II) Hedging basics (II)

Be able to do the following: o Analyze historical financial information (I) o Calculate the costs of capital and the WACC (I) o Develop financial forecasts pro forma financial statements (I & II) o Derive insights from above about management action (I and II) o Know how to find relevant information in Financial periodicals, The Wall Street Journal, The Financial Times, The Economist Internet web sites: yahoo.com/finance, Bloomberg.com, hoovers.com o Know how to find information about financial indices

Learning Outcomes Assessment: In this course, learning outcomes can be best assessed through the following means: Exams 2 exams at 25% each Case analyses 3 cases @ 5% each Homework Myfinancelab 15% Group project Industry Case Analysis Class participation Active, relevant discussion 50% 15% 15% 5%

Homework note: Each chapter in the text has end-of-chapter questions and problems. For many of the problems, solutions can be determined using Myfinancelab. In addition to the assigned homework problems for a grade, students have access to the study plan, for practice. Time permitting, we will work example homework problems in class. A representative from Pearson Publishing will visit our class and will show how students can gain full advantage of the homework provider. Group Project note: Each group will analyze an industry group and make a written and oral presentation in class. The power point (or similar) presentation in class should consist of 15 to 20 power point slides. A detailed write-up, explaining ratios and findings, can be submitted as a separate written document or in the power point notes. Students will choose an industry (first come basis), and four or five companies in the industry. Ratio analysis will include DuPont analysis and other important ratios, as well as stock valuation, including Price/Book ratios. The group will select one stock in the group as their investment recommendation. The instructor will provide projects that have been done in previous classes. This should be a fun project, to work together and collaborate, and to develop your speaking skills when presenting in front of your fellow students. The oral presentation will be incorporated in your grade as class participation, as well as how you listen and participate in other presentations.

Cases note: Each student must analyze three cases and prepare a written analysis, three to five pages, with attachments. The case should summarize the key issues (introduction), identify important variables and provide an analysis (body), and summarize the decisions, outcomes, and other key issues (conclusion). The cases are individual projects and your work should be your own. .. and please dont cite Wikipedia in your references. Class Participation: Class participation will be judged by both the quantity and quality of participation in class discussions and exercises. Students will demonstrate diligent preparation for class sessions by contributing on a regular basis. The quality of participation will be evaluated based on depth, insight, use of course concepts and materials in the formation of judgments, and contribution to moving discussions and activities forward. For the purposes of this class participation will include substantive answers to discussion questions, questions that add to or clarify class content, interactive discussion related to questions or comments made by other class members, and identification and submission of materials relevant to course material and that will enhance the financial management knowledge of all class members. Language: Because the language at Hult International Business School is English, participants are encouraged to speak English outside of class--in study groups, casual conversation, and at home. Only through constant practice will you attain the confidence needed to participate easily in business discussions. Attendance: Students are expected to attend all classes, arriving on time every time. Tardiness disrupts the entire class and will, therefore, be recognized and penalties may apply. If you must miss a class, you should arrange to get notes from another student as the content of every class is important. Academic Integrity Academic integrity is of the highest importance. All students are expected to do their own work and to follow the instructions provided, both explicitly and implicitly. The express purpose of this course is for students to learn the course material and be able to apply it in a business setting. Upon entering the Hult International Business School masters program, you agreed not to tolerate cheating by giving or taking improper academic aid, and not to plagiarize. You also agreed that if you witnessed any violations of the Hult Honor Code, you would handle the situation with responsibility by either addressing the situation directly, or discussing it with a person of authority. You further agreed to consult with an instructor or other person of authority when policies toward academic assistance are unclear. Upon this course, you hereby acknowledge that any violation of this Code could result in penalties, including a lower exam grade, a lower course grade, no course grade, suspension or dismissal from the school. Plagiarism Plagiarism is copying another persons work without providing credit to the original source. Any information extracted from other sources (including oral communication,

written texts, audiovisual and other technological resources such as CD-ROM or the Internet) without change or with only minor change, must be footnoted, giving credit to the source. If no credit is provided, it is considered plagiarism. Plagiarism will result in zero credit for the assignment and may, per the Hult Student Handbook, result in much more severe penalties. Cheating Cheating is considered getting help on an examination or assignment from a disallowed source. This includes using notes or outside sources of information during in-class examinations and assignments and copying or paraphrasing the work or ideas of another person (except for texts and notes associated with the course) without the permission of the Instructor. Cheating includes voluntarily assisting in another participants cheating. It may also include submitting the participants own work from one class for credit in another without informing the instructors and receiving their consent for the multiple submissions. Collaborating on an assignment when individual work has been required by an Instructor is also considered unacceptable academic behavior. Cheating will result in zero credit for the assignment or examination and may, per the Hult Student Handbook, result in more severe penalties.

Draft .. 10/21/11

RE: E-mail Policy Whereas: Whereas: Whereas: Whereas: Students often demonstrate poor communication skills, and Communication skills are critical in a business career, and There is evidence that students write disrespectful and rude e-mails, and Students need help and advice to improve their communication skills;

Now Therefore, Be It Resolved, That the following policy shall be in force for all e-mail correspondence: 1. Do not send any e-mails priority or urgent. If there is an emergency, dial 911. 2. Please allow one to two business days for a response. Saturdays, Sundays, and holidays are not business days. 3. All e-mails must have a subject; e.g., RE: E-mail Policy. Finance 1 is not the subject. 4. The salutation should be Dear Mr. Meiberger or Dear Professor, or Dear Professor Meiberger (especially if you want something); not Hey Herb or Hello. 5. Generally, letters are written with three paragraphs: Introduction, Body, and Conclusion. The Introduction should state the purpose, which is closely aligned with the subject discussed above. The Body should state your case and the justification for what youve stated in the introduction. The Conclusion should summarize key issues in the body. If you want something, this is where you say please and/or thank you. The closing should be Sincerely yours, or Truly yours, Regards, etc., followed by your name. 6. All sentences must begin with capital letters. 7. All sentences must be grammatically correct. 8. All words in sentences must be spelled correctly. 9. For help with Items 6-9, use the spell check feature in Microsoft word (Use Tools, and Spelling and Grammar. 10. E-mails violating this policy may lower your grade. Any e-mails with rude and/or threatening language will be referred for disciplinary action. Adopted: February 7, 2010, revised periodically. Herb Meiberger, CFA Adjunct Professor, Hult International University