Welcome to MT-217 Rhusabh Mehta AIM address: rushabh683 Office Hours: Wednesday: 8:00 9:00 P.M. EST Thursday: 8:00 9:00 P.M. EST Course Objectives By the end of this course, you should be able to: Explain the time value of money Integrate ratio analysis to financial statements Define the components of the US financial system Calculate firms weighted average costs of capital Evaluate long-term capital projects Assess the effects of capital structure and dividend policy decisions on companies Course Description This course covers basic financial concepts, principles, and techniques used in making personal and corporate decisions. It provides students with the tools necessary for analyzing the time value of money, financial statements, interest rates, the values of bonds and stocks, corporate costs of capital, corporate asset investment decisions, and corporate capital structure and dividend policies. Instructors Office Whenever you have a question in regards to the course work, please post your questions in the Instructors office. I will give you a response within 24 hours during the week and 48 hours on the weekends. Remember these are general questions. Myaddress:Use theto address more personal matters that you have concern. I will respond within 24 hours during the week and 48 hours on the weekends. Discussion Requirements Post a minimum of three posts per discussion question. One initial response and two replies to your classmates Posting on a minimum of three different days, for example: Wednesday, Friday and Monday The first post must be made by Saturday, midnight of the unit. Discussions Continued Be clear about which message you're responding to. Refer to specific passages or ideas in the course or text that have sparked your interest. Make sure your contribution adds something new to the discussion. A simple "I agree" may be your initial response, but think about how you can take the conversation to the next level. Make your posting clear and easy to follow by dividing longer messages into paragraphs More Discussions Address classmates by name or user name, and sign your own messages. Feel free to pose new questions to your classmates within your own message. Use correct spelling, capitalization, grammar, syntax, and punctuation. If you plan on posting a lengthy response, it is a good idea to type your response in Word or Notepad, then copy and paste it into the discussion area. This way you'll always have a record of your communication if for some reason you lose your connection to the course. Assignments Assignments are due: Tuesday, by 11:59 P.M. (Eastern time) Quizzes are opened from Wednesday, of the unit and close on Tuesday at 11:59 P.M. I will not re-open quizzes so make sure you plan your week. Grades Your grades will be determined by the rubrics which are located in the syllabus. I will have all grades completed by Monday after the unit is over. If you submit late work, it is up to you tome to let me know you have submitted the work. Late Policy Without Extenuating Circumstances: Up to one week (1-7 calendar days) late 20% deduction in points After one week (8-14 calendar days) late 30% deduction in points No work will be accepted more than two (2) weeks after the due date. Distinguished Scholar Videos Kaplan University is proud to present Jane Bryant Quinn as the distinguished scholar for MT 217: Introduction to Finance. Ms. Quinn is a syndicated personal finance columnist, broadcaster, and author who specializes in the area of personal finance. The Distinguished Scholar Videos will appear in Units 1 through 6, and will help illuminate finance topics from a personal finance point of view. Help Me, Marty! The goal of the Help Me, Marty! tutorials is to give you direction as to the most important material and to motivate you to study properly and determine how much you have learned. Finance is essentially quantitative--it deals with numbers and relationships between numbers. In Finance, you will be asked to do lots of calculations and you will be expected to know how your answer would tend to change if the data were changed and how the possibility of such changes would influence decisions. Seminars Each week we will discuss the current topics. We will also work out problems similar to that of your assignments. Please have the assigned chapters read before we start the seminars. Review of Chapter One Forms of Businesses Goals of the Corporation Stock Prices and Intrinsic Value Some Recent Trends Conflicts Between Managers and Shareholders Alternative Forms of Business Organization Proprietorship: An unincorporated business owned by one individual. Partnership: An unincorporated business owned by two or more persons. Corporation: A legal entity created by a state, separate and distinct fro its owners and managers, having unlimited life, easy transferability of ownership and limited liability. Proprietorships & Partnerships Advantages Ease of formation Subject to few regulations No corporate income taxes Disadvantages Difficult to raise capital Unlimited liability Limited life Corporation Advantages Unlimited life Easy transfer of ownership Limited liability Ease of raising capital Disadvantages Double taxation Cost of set-up and report filing Financial Goals of the Corporation The primary financial goal is shareholder wealth maximization, which translates to maximizing stock price. Do firms have any responsibilities to society at large? Is stock price maximization good or bad for society? Should firms behave ethically? Factors that affect stock price Projected cash flows to shareholders Timing of the cash flow stream Riskiness of the cash flows Stock Prices and Intrinsic Value In equilibrium, a stocks price should equal its true or intrinsic value. To the extent that investor perceptions are incorrect, a stocks price in the short run may deviate from its intrinsic value. Ideally, managers should avoid actions that reduce intrinsic value, even if those decisions increase the stock price in the short run. Determinants of Intrinsic Value and Stock Prices (Figure 1-1) Some Important Trends Recent corporate scandals have reinforced the importance of business ethics, and have spurred additional regulations and corporate oversight. The effects of changing information technology have had a profound effect on all aspects of business finance. The continued globalization of business. Conflicts Between Managers and Stockholders Managers are naturally inclined to act in their own best interests (which are not always the same as the interest of stockholders). But the following factors affect managerial behavior: Managerial compensation plans Direct intervention by shareholders The threat of firing The threat of takeover Responsibility of the Financial Staff Maximize stock value by: Forecasting and planning Investment and financing decisions Coordination and control Transactions in the financial markets Managing risk Questions???? Questions????