Managerial Finance Finance 3250 Fall 2006

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Managerial FinanceFinance 3250Fall 2006

• Lee W. Sanning
• Professor of Finance

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Managerial Finance, Finance 3250

• Name Placards
• First name on top line with major
• Last name on bottom line
• E.g.

LEE FIN SANNING
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Managerial Finance, Finance 3250

• Brief bio

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Managerial Finance, Finance 3250

• Syllabus
• Contact info
• lsanning_at_uwyo.edu
• 766-3848
• Ross Hall 230

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Managerial Finance, Finance 3250

• Syllabus (cont)
• Office Hours
• Times Tues 1000-1130 Wed 200-330
• Additional availability around exams
• Disabilities
• Final Exam (set by registrar)
• Web page (uwacadweb.uwyo.edu/sanning/)
• WyoWeb (register emails)

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Managerial Finance, Finance 3250

• Course Materials
• Text Fundamentals of Financial Management
• Brigham and Houston 10e
• Calculator Financial Calculator!
• Must be able to do cash flows
• Recommend the HP-10bii (bookstore 31.96)

CF1
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Managerial Finance, Finance 3250

• What is Managerial Finance?
• Decisions of the corporate manager

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Managerial Finance, Finance 3250Basic
Valuation Model
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Managerial Finance, Finance 3250

• How should a firm decide whether or not to
  undertake a proposed project?
• Suppose a project requires an initial investment
  of 10M. Should the firm take the project?

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Managerial Finance, Finance 3250

• How should a firm decide whether or not to
  undertake a proposed project?
• Suppose a project requires an initial investment
  of 10M. Should the firm take the project?
• Suppose the project will return 14M in one year.
• Should the firm take it?

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Managerial Finance, Finance 3250

• Estimation of project cash flows
• Time Value of Money
• Determination of discount rates
• Understand the relationship between risk and
  reward.

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Managerial Finance, Finance 3250

• Where will the firm get the 10M? Suppose that
  the interest rate on borrowing is 45 per year.
  Should the firm take the project now?
• need cost of money
• Where can the firm get money?
• issue stock
• issue bonds
• bank loans
• private placements
• retained earnings
• etc.
• How much interest would lenders charge?
• depends on the risk of the firm
• depends on the risk of the investment

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Managerial Finance, Finance 3250

• Managerial Finance Course Overview
• What is a firm and what is the ideal goal of the
  firm? (Chapter 1)
• How can we evaluate the quality of firms?
  (Chapter 3)
• How can we measure risk? What is the
  relationship between risk and return? (Chapter 5)
• What is the time value of money? (Chapter 6)
• How should bonds be valued? (Chapter 7)
• How should stock be valued? (Chapter 8)
• What is the firm's cost of borrowing? (Chapter
  9)
• What measures can be used to evaluate proposed
  projects? (Chapters 10 11 12)
• How much debt should a firm have? (Chapter 13)
• What should the firm do with its profits?
  (Chapter 14)