FINANCIAL MARKETS AND INSTITUTIONS

BABSON COLLEGE

MBA 7200

Mod B FINANCE

Course Description
Required Texts
Cases
Course Work and Grades
Schedule

I. Course Objective

This course is for former business students so that they may refresh their finance skills sufficiently to perform well in their elective courses and in the workplace. The assignments in this course have been integrated not only with other courses but also with the curriculum used in the first year of the two-year program, so that students in the one-year program will be similarly prepared. In this way, this course is also designed to be integrated with the “second” year electives.

In this course, students will review discounted cash flows (DCF), capital budgeting, cost of capital, the Capital Asset Pricing Model (CAPM), relative valuations, and valuing projects and entities. A great deal of knowledge (of accounting, statistics, economics, and general finance) is assumed, as all students should have received this training both as an undergraduate and in the business world.

II. Required Texts

REQUIRED: Corporate Finance, 7^th Edition, by Ross, Westerfield, and Jaffe, Irwin/McGraw-Hill, 2005.

The WSJ Guide to Understanding Money and Investing, Kenneth Morris, Virginia Morris, and Alan Siegel, Simon & Schuster Trade Paperbacks, 1999.

III. Cases

The cases that are in your coursepack are an important part of this course. ALL students are expected to come to class having already worked out the case, including developing any and all necessary spreadsheets. (In other words, you cannot just read the case, you also have to analyze the numbers prior to class.) Certain cases will be assigned to be written up and handed in prior to the start of the class. However, all cases (whether or not they are to be submitted) must be prepared. All students must therefore be able to discuss the case and the numbers in class. I will “cold-call” during each class to insure that all students have prepared the case.

IV. Course Work and Grades

All work and exams are cumulative. If an emergency or illness should force you to miss and examination or assignment/homework deadline, you must contact me before the test is given or the assignment is due. ALL EXAMS ARE CLOSED BOOK.

Participation, Initiative, Professionalism, and Improvement 30%

Midterm 30%

Final Exam 40%

NOTE: As of July 6, 2004. Dr. Goldstein reserves the right to change any aspect at any time, including, but not limited to, assignments, grading methods or relative grading weights, assignment or exam dates, or the course schedule.

SCHEDULE

Date	Session	Topic	Reading
12 July	Fin 1	Finance Review	Ch 4, 5
13 July	Fin 2	Discounting Cash Flows (DCF) I and Jimmy’s Hot Dog Stand	Ch. 7.1-7.3
14 July		NO CLASS
15 July	Fin 3	CASE: CRM with ISM-4 and MKT-9	MOORE MED
16 July		NO CLASS

19 July		NO CLASS
20 July	Fin 2	CASE: DCF Application I	REEBOK A
21 July		NO CLASS
22 July	Fin 5 Fin 6	CASE: DCF Application II and Capital Budgeting Teaching Note Cost of Capital I	REEBOK B, C, D, Ch. 6, 7.4, 7.5 Ch. 9, 10
23 July		NO CLASS

26 July	Fin 7 Fin 8	Cost of Capital II (cont.) Review	Ch. 9, 10
27 July		NO CLASS
28 July	Fin 9	MIDTERM
29 July		NO CLASS
30 July		NO CLASS

2 August	Fin 10	Cost of Capital III and Cost of Capital Teaching Note	Ch. 12
3 August	Fin 11	CASE: Cost of Capital IV	NIKE
4 August	Fin 12 Fin 13	CASE: Cost of Capital Application V Capital Structure I	PEPSI Ch. 15
5 August	Fin 14	CASE: Capital Structure II	SEALED AIR
6 August	Fin 15	International Valuation and Note of Fund. Parity Conditions	Ch. 17, Fruit of the Loom

9 August	Fin 16	CASE: Int’l Valuation II and Cross-Border Valuation note	SIMMONS JAPAN, ch. 31
10 August	Fin 17	CASE: Int’l Valuation III Lessard “Incorporating Country Risk”	SIMMONS JAPAN RWJ 696-705, 618-623
11August	Fin 18	Finance Review
12 August		NO CLASS
13 August		FINAL EXAM