FIN 320F

Foundations of Finance
Summer 2023

Instructor: Mary Lou Poloskey

Office Hours: One lunch period a week – day will be announced/posted weekly
E-mail: mary.poloskey@mccombs.utexas.edu
Student Assistant (SA): Preston Ellis

General Course Objectives

The purpose of this course is to provide students with a basic foundation in the study of finance
and financial management. In this course, students will:
1. Become acquainted with the financial environment and learn how the financial system
interacts with the economy
2. Learn the fundamentals of personal/corporate investment activities and financial
management
3. Develop an understanding of how businesses allocate financial resources in an uncertain
environment, with the goal of maximizing shareholder wealth

Required Course Materials

 CFIN, by Besley/Brigham Cengage & Investment Chapter from PFIN Cengage
(supplied)
 Excel
 Other Suggested Materials: Wall Street Journal, Financial Times, Business Week, etc

Grade Computation
The final grade will be determined based on the items listed below:
 Daily In Class activities (10%)
 Homework (15%)
o Homework Assignment #1
o Excel Homework Assignment
o Homework Assignment #2
 Exams (55%)
o Exam I: Chapters 1, 3-6 & Chapter11(PFIN) & Federal Reserve (Readings)
o Exam II: Chapters 7 – 10, 13, WACC
 Stock Market Project (15%)
 Leadership & Professional Communication (5%)
Stock Market Project
Instructions for the project will be discussed in class. There will be multiple due dates during the
course (as specified in the Course Schedule). You will make a presentation concerning your
project outcomes at the end of the semester.

Daily In Class Activities and Homework Policies

Each class period will include a class activity students will complete during class. Some days
students will take a picture and upload work before leaving the classroom. Other days, instead of
uploading a picture, the paper copies will be collected & returned to students the next day. The
only way to receive points for each day’s activity is to be in class and complete it. There are
no make-ups or excused absences, but 2 daily activity grades will be dropped at the end of the
semester.
All homework is due as indicated in the course schedule. No late homework will be accepted.

Exams
The exam questions will reflect a balance of quantitative and qualitative content, consistent with
our coverage of the course material.

Students are expected to accept the responsibility of aggressively avoiding ANY behavior that
may appear to be dishonest. Any suspected violations of academic integrity will be submitted to
the Office of the Dean of Students for investigation.

Additional Comments
The policies supplement the Master Syllabus for the Summer Institute and provide the basic
guidelines and code of conduct for the course. They are designed to reduce confusion and
establish an equitable framework for the entire class.
The “spirit” of the course is just as important as the “rules and regulations.” My goal is to create
a cooperative classroom environment in which we learn from each other. To that end, I welcome
your constructive comments and suggestions as we progress through the course. Your feedback
is an important element of course delivery and development.
Barring an emergency, or except as previously arranged, I will be available during my
office hours. I encourage you to visit with me regarding any concerns with the course or
just to say “hello.” I am also accessible via e-mail. I will make every effort to respond to
your e-mail within one business day of its receipt.

Learning Objectives and Outcomes for FIN 320F

1. Understand the role of financial management in the organization and operation of the
business firm
a. Acquisition and use of funds
b. Goals of the corporation – Maximization of shareholder wealth
c. Social and ethical responsibility in light of agency and stakeholder relationships

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 2. Understand the environment and markets in which the firm operates
a. Financial markets and institutions
b. Interest rates – “The cost of money”
c. Monetary and fiscal policy – The Federal Reserve Board and the banking system

3. Understand the use of financial statements as a resource for analyzing the performance
and prospects for the firm
a. Importance of cash flow versus accounting income
b. Financial planning
c. Financial control process

4. Develop a knowledge of the mathematics of finance and financial theory

a. Time value of money
b. Stock and bond valuation
c. Quantification of risk and return (and the tradeoff between the two)
d. Use of beta, the Capital Asset Pricing Model, and modern portfolio theory

5. Learn basic capital budgeting and cash flow forecasting techniques

a. Capital investment evaluation methods (e.g., payback, IRR, NPV)
b. Cash flow identification and estimation
c. Project evaluation and risk analysis
d. Determination of risk adjusted costs of capital and discount rates

6. Examine the nature of the firm’s capital components and their costs
a. Determination of the component costs of capital (debt and equity).
b. Determination of the weighted average cost of capital.

7. Develop a basic understanding of equity investing and portfolio management

a. Establish a set of investment objectives and portfolio selection criteria
b. Utilize equity research to construct and manage a portfolio of equity securities
c. Monitor portfolio performance in terms of risk and return

General Study Guidelines

The following recommendations are presented as an addendum to the syllabus.

Class Preparation:
It is important that you read the assigned chapters before class. During class time, you should
always be prepared to ask/answer questions. I will address questions to individuals and to the
entire class that assume you are conversant with the discussion topic.

Ask yourself the following questions as you read the chapters and prepare for class:
 What is the purpose of this concept or formula?
 Why is this concept important?
 How did the author or instructor demonstrate its application?
 How does it relate to other concepts/formulae that we have studied?
 Can I describe this concept or formula in my own words?
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  Can I answer the concept questions in the text?

Be prepared for class - Much of our class time will be devoted to discussing/reviewing
financial problems and concepts. Consult the tentative course schedule for weekly readings and
assignments.

Take good notes - Class Powerpoints for each chapter will be posted on Canvas, but these will
not be exhaustive. Class lectures and discussions will enhance these and integrate them with
other essential course material.

Ask/answer questions - I encourage you to be an active learner by asking/answering questions

and getting involved during class discussions.

Keep apprised of current financial issues - We will discuss how the concepts in our text apply
to the “real” world. Devote a little time each day to perusing the Web and/or financial
publications for pertinent topical issues.

Exam Preparation:
The basic concepts that we cover early in the course provide the foundation for more advanced
material that we address later. Try to master the concepts as we cover the material and avoid
“cramming” the day before the exam. It is extremely difficult to catch up if you get behind on the
readings and homework. You should review the course material “early and often” on your own
and/or in a study group. Reviews for each chapter are posted in Canvas.

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Class Day Date Class Coverage Chapter/Class Content
FIN 1 Th June 6 Syllabus/Chapter 1 Course Introduction/ Start Chapter 1

FIN 2 F June 7 Chapters 1 & 3 An Overview of Finance/Financial Markets

FIN 3 M June 10 Chapter 3/Investing Intro Financial Markets/Investing

FIN 4 T June 12 Chapter 11 (different text) Investment Planning (PFIN)

W June 11 Stock Market Project Questions Due @ 10:00pm

FIN 5 Th June 13 Stock Selection Portfolio Set-up

FIN 6 M June 17 Chapter 4 Time Value of Money Market Project Set-up by 6/17 1pm

FIN 7 Th June 20 Chapter 4 Time Value of Money

Sun June 23 Excel HW Due 6/23 @ 10:00 pm

FIN 8 M June 24 Chapter 5/Articles Cost of Money/Federal Reserve

FIN 9 W June 26 Chapter 6 Bond Valuation

FIN 10 Th June 27 Chapter 6 Bond Valuation

FIN 11 F June 28 Behavioral Finance

Sun June 30 HW #1 Due 6/30 @ 10:00 pm

FIN 12 M July 1 Market Update/Review

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 Chapters 1, 3-6 & 11 (PFin),Federal Reserve, Behavioral
FIN 13 W July 3 Exam 1 Finance

FIN 14 F July 5 Chapter 7 Stock Valuation (online)

FIN 15 M July 8 Chapter 8 Risk & Rates of Return

FIN 16 T July 9 Chapter 9 Capital Budgeting

FIN 17 M July 15 Chapter 10 Capital Budgeting/Cash Flows

FIN 18 T July 16 Chapter 10 Project Cash Flows and Risk

FIN 19 W July 17 Chapter 13 Dividend Policy

Stock Mrkt Proj Spreadsheet due 7/17 at 10:00pm

FIN 20 TH July 18 WACC/Review WACC/Capital Structure

F July 19 HW #2 Due 7/19 @ 10:00pm (Chapters 7-10,13)

FIN 21 M July 22 Exam 2 Chapters 7-10,13,WACC

FIN 22/23 T July 23 Finance wrap-up Picks & Pans Presentations