BRANDEIS INTERNATIONAL BUSINESS SCHOOL

BUS 71 A: INTRODUCTION TO FINANCE

REVISED 8/20/2015
SUBJECT TO SOME REVISIONS

Professor: Hamza Abdurezak, PhD., FRM

Office:

Sachar International Center, 124B

Email:

abdurez@brandeis.edu

Tel.

617-851-8406

Professor Office Hours: Thursdays from 2:00-4:00PM

Class Meeting Days & Times: Thursdays 6:30PM-9:20PM
Class Meets: TBA
Teaching Assistants
Liset Hernandez: lisa8vah@brandeis.edu
Nihar Shendye: nihars@brandeis.edu>
TA Review Sessions: TBA

COURSE OBJECTIVES
The primary objective of this course is to develop the financial skills and thought processes
necessary to make and implement business decisions in a global environment. Upon successful
completion of this course, students will have developed an understanding of key concepts of the
financial environment within which management must operate, the processes of financial
analysis, the time value of money, methods of stock and bond valuation and the relationship of
valuation to risk and return.
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SPECIFIC LEARNING GOALS:

Develop fundamental understanding of

o The functions that financial market provide in the economy,
o How firms deal & use financial market to raise funds for their investments
o How investors and firms approach financial decisions
o Time value of money
o How firms make capital budgeting decisions
Gain understanding and develop basic skill sets on
o how to value bonds and stocks
o Risk and return
o How companies raise capital and make capital structure and dividend policy

We will analyze how managers make financing and investment decisions within a framework
which emphasizes the time value of money and the relationship between expected return and risk
and examine alternative investment decision methods that financial managers use to evaluate
feasibility of undertaking new projects (i.e., capital budgeting)

Prerequisites: Bus 6a or equivalent. This course may not be taken for credit by students who
have previously taken Econ 171a. This course cannot be counted as an elective towards the
economics minor or major.
The Teaching Methods:
The teaching methods will involve combinations of class lectures, problem solving and case
discussions. This course is fast paced, reasonably technical in nature, and it requires each student
to do considerable out-of-class work. There is assigned homework required for nearly every class
session. Problem solving is very important in this course and I encourage participation from all
my students in this activity throughout the term. Answers to most assigned questions will be
provided to students. You should read the assigned book chapters prior to coming to class. The
material will mean a great deal more to you, and you will understand and retain much more of it,
especially when you review the class notes and problems prior to an exam.

COURSE REQUIREMENTS
Course materials

Primary Textbook::Essentials of Corporate Finance, 8th Edition, Ross, Westerfeld,

Jordan, (henceforth RWJ) McGraw-Hill, 2013. ONLINE EDITION IS REQUIRED!
We will use CONNECT, an online platform that comes with book to do assigned
problem set and exercises. The online edition and CONNET platform are bundled
together are cheaper than buying the hard copy of the book and separately buying
CONNECT.

Additional course materials will be posted on LATTE and/or distributed in class.

Regular readings of financial and business press such as Financial Times, Barrons, and
the Economist may help students appreciate the applications of the principles developed
throughout the semester. A very important benefit of keeping up with current business
events is that it may provide students some ammunition with which you can impress
career job interviewers, From time to time, I will comment on relevant topics that appear
on financial press.

Workload expectation

As BUS 71a is a four-credit course, you are expected to spend a minimum of 9 hours of
study time per week in preparation for class (readings, problems sets, discussion
sections, preparation for exams, case studies, etc.).

Homework Problem Sets: The best way of learning finance is by doing series of problem sets
to digest the concepts developed in class lectures and textbook readings.. I will assign practice
problem sets throughout the semester. Homework is generally submitted electronically via the
CONNECT electronic interface with the electronic textbook. In all sections of BUS 71a we will
follow the following homework grading procedure for consistency across sections.

Check plus: flawless/near-flawless

Check / Check plus: most work done correctly, but 1-2 significant errors

Check: Student showed effort, but made several significant errors

Check minus: not turned in, turned in with significant help from another student (e.g.,
cheating) or no meaningful effort made.
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It is absolutely critical that you work on these problem sets by yourself to gain the benefit
of their intended objectives of digesting the concepts and principles. In addition, these
problem sets are study tools for the midterm and final exams since the exam questions are
closely modelled around those questions although I will not repeat the same questions for
the exams except the concept covered by those questions. Students who consistently do
well on these problem sets tend to do well on the exams as well.. Therefore, the most
important and most helpful suggestion I can give you for doing well in this course is to
do all the assigned questions and problems and then review them so that you are able to
do them on the exam. The surest way to do poorly in this course is to not carefully work
on these homework assignments. If you have any difficulty in solving the problems,
please contact me and my TAs assigned for this course.

Financial Calculator: Students will be REQUIRED to use a TI BAII Plus financial

calculator. NO OTHER FINANCIAL CALCULATOR IS TO BE USED! Please read
pages 103-104 and 620-622 in the text book if you need help with a financial calculator.
You should bring the calculator to every class. I am fine with you using Excel as a tool
for homework, but you will not have it available to you during exams, so its important to
be very familiar with the financial calculator functions.

Class Participation: I expect you to actively participate in class discussion and problem solving
throughout the semester, We will take class attendance every class. Class participation grade
will be on a similar scale to homework grades:

Check-plus: 2 or more contributions (questions or responses) to a given class sessions

discussion

Check/Check-plus: 1 contribution to a given class sessions discussion

Check: attendance, but no contribution

Check minus: unexcused absence. I will provide excused absences to varsity athletes for
scheduled competitions. Those must be arranged in advance. I allow students one
unexcused absence per term without penalty. Additional absences will deduct from your
class participation score.

To facilitate participation, I will ask all students to place a name card on their desks, and that
they sit in the same seat every class. Perfect attendance but no participation receives a grade of

B- towards the overall grade. Each unexcused absence results in a reduction in this grading
element. It is your responsibility to ensure that you take an active role in the class. If this is
a problem for you, I urge you to talk to me to discuss ways you can make a contribution.

Grading

Class Participation

15%

Homework Assignments

25%

Midterm Exam

20%

Final Exam

40%

The midterm will be for the full class duration, and the final will be a 3 hour exam. The final
exam is comprehensive and cumulative. There will be no makeup exam for the midterm.
Students with an excused absence from the midterm will split its weight equally between
homework assignments and the final exam. You cannot skip the final exam if you do you will
get zero for the final the weight from the final will not be moved to the other components. The
final exam is available only during the specified exam schedule time, time to be determined by
registrar.
Both the midterm and final exams are closed books and closed notes. However, you may bring
one crib sheet to the midterm exam and two crib sheets to the final exam. A crib sheet is an
ordinary (A4 or 8 x 11) piece of paper, on which you may write, type, print or copy
formulas ONLY- no definitions or any other text will be allowed. Writing should be in 10 point
font or hand-written equivalent and you may use both sides of the paper. You may not staple or
tape any extensions or booklets onto the crib sheet. Do not abuse this privilege if you do
there will be severe penalties on your final grade.

Academic honesty: You are expected to be honest in all of your academic work. Please
consult Brandeis University Rights and Responsibilities for all policies and procedures
related to academic integrity. Students may be required to submit work to TurnItIn.com
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software to verify originality. Allegations of alleged academic dishonesty will be forwarded

to the Director of Academic Integrity. Sanctions for academic dishonesty can include
failing grades and/or suspension from the university. Citation and research assistance can
be found at LTS - Library guides
Special Accommodation. If you are a student with a documented disability on record at
Brandeis and wish to have a reasonable accommodation made for you in this class, please see me
immediately. Please keep in mind that reasonable accommodations are not provided
retroactively.
Use of Laptop Computers and Cell Phones in Class:
Cell phones and PDA.s (i.e., Blackberrys, iPhones, etc.) must be turned off during lectures.
Laptops may be used only to take notes. Regular class attendance is mandatory and strongly
advised if you want to do well in the course. I stick quite closely to my slides and what I discuss
in class when setting exam questions. Laptop computers and cellphones may not be used during
exams.
Course Calendar & Outline
Date

Topics

Assigned
Readings
RWJ

8/27

9/3

9/10

9/17

Course Overview and

Introduction
Introduction to Financial
Management
Financial Statements and
Cash Flow
Working with Financial
Statements

Chapter 1
Chapter 2

Chapter 3

No Class: Brandeis Monday

Schedule is in effect

Time Value of Money

Discounted Cash Flow
Valuation

Chapter 4
Chapter 5

9/24

Interest Rates and Bond

Valuation

Chapters 6

10/1

Equity Markets and Stock

Valuation

Chapter 7

10/8

Net Present Value and Other

alternative Investment
Decision Methods

Chapter 8

10/15

MIDTERM EXAM

10/22

Project Cash Flow Analysis &

Making Investment Decisions

Chapter 9

Some Lessons from Capital

History
Introduction to Risk & Return

Chapter 10

10/29

11/5

Chapter 11
Risk & Return
Diversification, systematic and
unsystematic risk

11/12

Cost of Capital Estimation

Chapter 12

11/19

Leverage & Capital Structure

Chapter 13

Dividend policy

Chapter 14

11/26

No Class:
Nov. 25
Friday, Nov.
27

Thanksgiving
holiday:
No university
exercises

12/3

Raising Capital

12/10

Course summary & Final

Review

Chapter 15

Note: I reserves the right to add and remove readings from the course and to alter or modify the
lecture schedule as required. I will give you advance notice of any such changes or
modifications.