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Kuwait UniversityCollege of Business Administration

Department of Finance & Financial Institutions

Course SyllabusFall 2018

Dr. Saud Al-ThaqebFIN 327 – Intermediate Financial Management

Lecture Time and Location:FIN 327/01 : Sun-Tue-Thurs 11-11:50 am Room # 309FIN 327/54 : Sun-Tue-Thurs 12-12:50 pm Room # 309

Contact Information:Location : Department of Finance & Financial Institutions – 2nd Floor Email : [email protected] Office Hours : After class & Tue from 1:15 PM to 1:30 PM or by appointmentSocial Media : MyU – SAlthajeb (This is my preferred form of communication)Course Website : www.SAlthajeb.comTeaching Assistant: Name : Wadha Alateeqi

Course Description:This course builds on the concepts covered in the Principles of Financial Management course. It examines the basis of financial decisions made by companies, emphasizing the following: theories of asset valuation; the cost of capital; risk analysis; real options; capital structure; dividend policies; working capital management; derivatives; multinational financial management; mergers and acquisitions.Course Learning Outcomes:The learning outcomes for this course, listed below, relate to the learning goals of the College of Business Administration Undergraduate Program, which can be found in the appendix at the end of this syllabus. The numbers in parenthesis indicate to which specific learning goal the outcome relates.Upon successful completion of the course, students will:

1. Be able to analyze and solve financial problems. (LG5)2. Be able to use capital budgeting methods (i.e. NPV, IRR, MIRR, PBP, etc.) to solve financial

problems. (LG2, LG5)3. Be able to analyze project risk. (LG5)4. Understand real options and what they mean to the firm. (LG2)5. Understand a firm's optimal capital structure and dividend policy and how they affect firm

value. (LG2, LG5)6. Have a basic understanding of multinational financial management.7. Have a basic understanding of mergers and acquisitions. (LG2, LG5)8. Have a basic understanding of derivatives and their pricing.

Required Material: Textbook : Brigham, Eugene F., and Joel F. Houston. Fundamentals of Financial Management. 13th ed. Mason: South-Western, 2012. Print.Additional Material :

Brigham, Eugene F., and Joel F. Houston. Fundamentals of Financial Management: Study Guide. N.p.: Mason, Ohio, 2012. Print.

Other material, including course PPT Slides are available on Blackboard.

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mailto:[email protected]



Financial CalculatorE-Learning System : Blackboard Learning Management SystemCourse Website : www.SAlthajeb.com

Course Requirements and Policies:

Expectations: I expect you to attend each class and participate in discussions. I expect you to do your assignments on time and attend the tutorials.

Project: There will be a project done in a group of 2-4. The project involves analyzing and evaluating a corporate project of your choosing. Projects for small businesses are also accepted.

The project is here to help you understand the material and tie the concepts and expose you to real-world problems and situations.

Attendance: Attendance is mandatory. There is a 10% grade towards attendance and participation. However Every student in this course must abide by the Kuwait University Policy on Attendance (published in the Student Guide, Chapter 3, Section 13). However, there is a bonus of 3 points for full attendance. A copy of the student guide can be accessed online on:

http://www.kuniv.edu/cs/groups/ku/documents/ku_content/kuw055940.pdf

Assignments: There will be various assignments throughout the semester These assignments are here to help you understand the material and tie the concepts

Quizzes: I will give some quizzes throughout the semester, so you should be prepared.

Exams: There will be two midterms and a final; however, the instructor retains the right to change the dates. The dates of the exams are as follows:Important Dates Event Notes

14/10/2018 Midterm 1 (Ch 12,13,14 ) Time & place TBA18/10/2018 Last day to drop a course2/12/2018 Midterm 2 (Ch 15,16,18 ) Time & place TBA

18/12/2018 Last day of classes20/12/2018 Final (comprehensive) 5-7 PM in a place TBA

Grading: The scores in this course will be the weighted average of the following items: Weight Description

5 % Quizzes5 % Class Participation5 % Attendance

10 % Project35 % Two Midterms40 % Final Exam

100% TOTAL

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Cheating and Plagiarism: Every student in this course must abide by the Kuwait University Policy on Cheating and Plagiarism (published in the Student Guide, Chapter 3, Section 2). A copy of the student guide can be accessed online on:


Please carefully note all sources and assistance when you turn in your work. Under no circumstances should you take credit for work that is not yours. You should neither receive nor give any unauthorized assistance on any deliverable. If you have any questions about what constitutes “unauthorized assistance” please email me before the deliverable is submitted.

Writing Style: Students must refer to MLA or APA writing style for their assignments and report writing. Refer to the English Language Center for help.

Grade Distribution:Grade Range Grade RangeA ≥ 95 C+ ≥ 77 and < 80A- ≥ 90 and < 95 C ≥ 73 and < 77B+ ≥ 87 and < 90 C- ≥ 70 and < 73B ≥ 83 and < 87 D+ ≥ 65 and < 70B- ≥ 80 and < 83 D ≥ 60 and < 65

F < 60

Course Outline:Title TopicsCash Flow Estimation and Risk Analysis(CFA TOPIC)

Identification of Relevant Cash Flows in Capital Budgeting Analysis Cash Flow Estimation Calculation of Capital Budgeting Metrics Measuring Risk and Adjusting WACC Mutually Exclusive Projects Unequal Lives Projects

Real Options and Other Topics in Capital Budgeting (CFA TOPIC)

What are Real Options? Analysis and Influence of Real Options NPV and Size of a Firm’s Capital Budget Optimal Capital Budget Post-Audit

Capital Structure and Leverage(CFA TOPIC)

Determining the Target Capital Structure Business Risk vs. Financial Risk How Debt Affects Expected Return and Risk Determining the Optimal Capital Structure Capital Structure Theory

Distributions to Shareholders: Dividends and Share Repurchases

Dividends vs. Capital Gains Trade-Offs in the Establishment of Optimal Dividend Policies Stock Splits vs. Stock Dividends Stock Repurchases and their Effects Pros and Cons of Stock Repurchases (CFA TOPIC)

Working Capital Management(CFA TOPIC)

Effect of Current Assets and Current Liabilities on Profitability Cash Conversion Cycle Construction of the Cash Budget Working Capital Management Credit Policies Financing Working Capital

Derivatives and Risk Management(CFA TOPIC)

Why Manage Risk? Introduction to Derivatives Types of Derivatives How Derivatives are Used to Manage Risk Black-Scholes Option Pricing Model Risk Management Processes

Multinational Financial Management

Why Companies go “Global”? Exchange Rates Interest Rate Parity Purchasing Power Parity Pros & Cons of Investing Overseas Challenges Facing Multinational Corporations

Mergers and Acquisitions(CFA TOPIC)

Rationale for Mergers Types of Mergers Merger Valuation Merger Analysis Do Mergers Create Value?

Course Schedule

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Sun 9/9/2018 Introduction to the courseTue 11/9/2018 Chapter 12: Cash flow estimation and risk analysisThu 13/9/2018 Chapter 12: Cash flow estimation and risk analysisSun 16/9/2018 Chapter 12: Cash flow estimation and risk analysisTue 18/9/2018 Chapter 12: Cash flow estimation and risk analysisThu 20/9/2018 Chapter 12: Cash flow estimation and risk analysisSun 23/9/2018 Chapter 12: Cash flow estimation and risk analysisTue 25/9/2018 Chapter 13: Real options and other topics in capital budgetingThu 27/9/2018 Chapter 13: Real options and other topics in capital budgetingSun 30/9/2018 Chapter 14: Capital structure and leverageTue 2/10/2018 Chapter 14: Capital structure and leverageThu 4/10/2018 Chapter 14: Capital structure and leverageSun 7/10/2018 Chapter 14: Capital structure and leverageTue 9/10/2018 Chapter 14: Capital structure and leverageThu 11/10/2018 Chapter 14: Capital structure and leverageSun 14/10/2018 Midterm 1Tue 16/10/2018 Chapter 15: Distributions to shareholders: dividends and share repurchasesThu 18/10/2018 Chapter 15: Distributions to shareholders: dividends and share repurchasesSun 21/10/2018 Chapter 15: Distributions to shareholders: dividends and share repurchasesTue 23/10/2018 Chapter 15: Distributions to shareholders: dividends and share repurchasesThu 25/10/2018 Chapter 15: Distributions to shareholders: dividends and share repurchasesSun 28/10/2018 Chapter 15: Distributions to shareholders: dividends and share repurchasesTue 30/10/2018 Chapter 15: Distributions to shareholders: dividends and share repurchasesThu 1/11/2018 Chapter 15: Distributions to shareholders: dividends and share repurchasesSun 4/11/2018 Chapter 16: Working capital managementTue 6/11/2018 Chapter 16: Working capital managementThu 8/11/2018 Chapter 16: Working capital managementSun 11/11/2018 Chapter 16: Working capital managementTue 13/11/2018 Chapter 18: Derivatives and risk managementThu 15/11/2018 Chapter 18: Derivatives and risk managementSun 18/11/2018 Chapter 18: Derivatives and risk managementTue 20/11/2018 Chapter 18: Derivatives and risk managementThu 22/11/2018 Chapter 18: Derivatives and risk managementSun 25/11/2018 Chapter 18: Derivatives and risk managementTue 27/11/2018 Chapter 19: Multinational financial managementThu 29/11/2018 Chapter 19: Multinational financial managementSun 2/12/2018 Midterm 2Tue 4/12/2018 Chapter 19: Multinational financial managementThu 6/12/2018 Chapter 19: Multinational financial managementSun 9/12/2018 Chapter 19: Multinational financial managementTue 11/12/2018 Chapter 21: Mergers and AcquisitionsThu 13/12/2018 Chapter 21: Mergers and AcquisitionsSun 16/12/2018 Chapter 21: Mergers and AcquisitionsTue 18/12/2018 Chapter 21: Mergers and AcquisitionsThu 20/12/2018 Final Exam (5-7 PM in a place TBA)

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