Course Syllabus BUS 170


Fundamentals of Finance


Fall Semester 2006

                          Section 03   :   TTH   9:00AM – 10:15AM              Room:  BBC 322

                          Section 07   :   TTH   12:00PM –  1:15PM             Room:  ENG 331


The course outline provides a general plan for the course, deviations may be necessary




Instructor:      Dr. Richard Fu

Office:                BT854

Phone:                (408) 924-3942

Fax:                    (408) 924-3463


Office Hours:      TTH 8:15AM – 9:00AM, 10:15PM – 12:00 PM

Or by appointment

Course Objective:

This course introduces students to the basic concepts and techniques of the finance discipline.  In particular, the course will illustrate how corporate financial managers can maximize shareholders’ wealth through financing and investment activities.  The course will present Time-Value of money, valuation of various classes of Financial Securities, Capital Budgeting decisions, Risk-Reward relationship, Cost of Capital and Capital Structure Theory.  This course has been designed to give non-finance majors an overview of the function of financial management within most firms, and to provide finance majors with a solid foundation on which elective courses will build.



BUS 21, Econ 1A, Econ 1B, BUS 90 (with minimum grade of “C“in each), and be officially enrolled in BUS 170 section 03/07 (prerequisites are strictly enforced!).  It is also assumed that students are familiar with basic concepts of accounting and algebra.  Furthermore, it is assumed that students are sufficiently computer-literate to generate EXCEL-spreadsheet analyses of the problems and cases addressed in the course.


Course Information and Policies


The course syllabus provides a general plan for the course, deviations may be necessary


A.         Course Materials

(1)               Required Textbook: Ross, Westerfield, and Jordan (RWJ), Fundamentals of Corporate Finance, 7th edition, McGraw-Hill.

(2)               Required Class Notes, to be distributed in student associates printing shop.

(3)               The Wall Street Journal, the Financial Times, Business Week, the Economist, and/or any other relevant financial publication.  Students are strongly encouraged to look for current examples and applications of the financial topics covered during the lectures.

(4)               It is necessary that you have a financial calculator to use throughout the course. Many textbook problems require complex arithmetic operations, and a financial calculator is necessary to solve these problems efficiently.  This is especially true for tests exams.  The instructor recommends that for BUS 170 you use the Texas Instrument BA II Plus.


B.        Attendance

Each student is expected to attend ALL scheduled class meetings for the entire duration of the class meeting.  An attendance sign-up sheet may be circulated each class period but not for grading purposes.  Consistent attendance is essential for your performance in this course.  Many students find finance concepts difficult to grasp.  Missing classes will only make the process of absorbing this material more difficult.  I also present material in class that may not be found in the text.  If you find yourself falling behind or you are having problems with the material, I encourage you to borrow some notes from your classmates.  Your classmates can be a very valuable ressources.  Ask them questions, share your thoughts and doubts, collaborate with them when solving the problems at the end of the chapters in the textbook.


C.                 Classroom Environment

Students are expected to 1) notify me if they will be late or leave early; 2) not engage in any conversation except the class discussions; 3) not put their heads on the desk; 4) not read or work on anything except the material in the class; 5) not behave in any way that is disruptive; 6) not use a laptop computer.


D.        Academic Integrity

“Your own commitment to learning, as evidenced by your enrollment at San José State University, and the University’s Academic Integrity Policy requires you to be honest in all your academic course work.  Faculty members are required to report all infractions to the Office of Student Conduct and Ethical Development.  The policy on academic integrity can be found at“


E.         Exams and Grading

There will be two mid-terms and one final exam during the semester. The tests and Final exam are closed-book and are based on assigned readings, lectures, cases and homework-problems as indicated in the sessions.  A Financial Calculator is necessary during examinations. Bring Scantron answer sheets in all the tests and Final.

The Grade weights will be:

-      Test 1                                                                   30%

-      Test 2                                                                   30%

-      Final Exam                                                           40%

There will be no make-up tests for Test 1 and 2.  If you miss a scheduled test, you must notify me as soon as possible, and provide a documented reason for your absence.  If I deem that your reason is sufficient to warrant an absence from the test, the weight of the missed in-term test will be added to the final exam (thus, your final exam score will count toward 70% of your total course grade average).  If I do not consider your excuse sufficient to warrant an absence from the exam, you will be assigned a grade of zero if you fail to take the test.  This policy will only count for one in-term test.  If you miss both tests, you will receive a grade of zero on the second missed exam. 

No extra-credit is offered in any form in this class.  There is no curving for the grading of exams.

Your final grade for the course is based on the distribution below and follows a standard 100 percent scale.  .  A [90-100], B [80-90), C [70-80), D [60-70), and F (below 60).


F.         Returning Tests and Grievance Procedure

Graded tests will be returned one week after being administered.  Anyone feeling that a dispute exists after the grading of a test may submit a written grievance.  This grievance should identify the item in dispute and the arguments supporting the student’s position.  The grievance should be stapled to your exam and must be submitted within one class period following the return of the examination.  The instructor agrees to provide a response to the student’s grievance within two class periods from the receipt of the grievance.


G.        Students with Disabilities

“If you need course adaptations or accomodations because of a disability, or if you need special arrangements in case the building must be evacuated, please make an appointement with me as soon as possible, or see me during office hours.  Presidential directive 97-03 requires that students with disabilities requesting accomodations must register with DRC to establish a record of their disability.“

H.        Incomplete

An incomplete will be granted only in the most unusual circumstances and is not permitted simply to avoid a low grade.  In order to grant an incomplete, the instructor must obtain the permission from the Chair of the Accounting and Finance Department.


I.          Add/drops, withdrawal, etc.

“You are responsible for understanding the policies and procedures about add/drops, academic renewal, withdrawal, etc. found at and also at“

J.         Tentative Course Schedule

The course schedule provides a general plan for the course, deviations may be necessary.








Topics to be covered


Assigned Readings (RWJ)





Jan 30



Introduction to Corporate Finance



Chapter 1







Feb 1


Feb 6



The Time Value of Money





Chapter 5








Feb 8


Feb 13


 Feb 15




Discounted Cash Flow Valuation




Chapter 6








Feb 20


Feb  22


Feb 27





Interest Rates and Bond Valuation




Chapter 7





Mar 1










Mar 6


Test 1









Mar 8


Mar 13




Stock Valuation



Chapter 8







Mar 15


Mar 20



Net Present Value and Other Investment Criteria



Chapter 9







Mar 22


Apr 3



Making Capital Investment Decisions



Chapter 10








Topics to be covered


Assigned Readings (RWJ):






Apr 5








Apr 10


Test 2











Apr 12


Apr 17



Some Lessons from Capital Market History




Chapter 12









Apr 19


Apr 24


Apr 26




Return, Risk, and the CAPM




Chapter 13






May 1


May 3




Cost of Capital



Chapter 15





May 8



Raising Capital


Chapter 16







May 10


  May 15



Special Topics / Review



Final exams follow the University schedule.

College of Business Policies and Procedures


To ensure that every student, current and future, who takes courses in the Boccardo Business Center has the opportunity to experience an environment that is safe, attractive, and otherwise conducive to learning, the College of Business at San José State University has established the following policies:



Eating and drinking (except water) are prohibited in the Boccardo Business Center.  Students with food will be asked to leave the building.  Students who disrupt the course by eating and do not leave the building will be referred to the Judicial Affairs Officer of the University.


Cell Phones

Students will turn their cell phones off or put them on vibrate mode while in class.  They will not answer their phones in class.  Students whose phones disrupt the course and do not stop when requested by the instructor will be referred to the Judicial Affairs Officer of the University.


Computer Use

In the classroom, faculty allow students to use computers only for class-related activities.  These include activities such as taking notes on the lecture underway, following the lecture on Web-based PowerPoint slides that the instructor has posted, and finding Web sites to which the instructor directs students at the time of the lecture.  Students who use their computers for other activities or who abuse the equipment in any way, at a minimum, will be asked to leave the class and will lose participation points for the day, and, at a maximum, will be referred to the Judicial Affairs Officer of the University for disrupting the course.  (Such referral can lead to suspension from the University.)  Students are urged to report to their instructors computer use that they regard as inappropriate (i.e., used for activities that are not class related).


Academic Honesty

Faculty will make every reasonable effort to foster honest academic conduct in their courses.  They will secure examinations and their answers so that students cannot have prior access to them and prMaror examinations to prevent students from copying or exchanging information.  They will be on the alert for plagiarism.  Faculty will provide additional information, ideally on the green sheet, about other unacceptable procedures in class work and examinations.  Students who are caught cheating will be reported to the Judicial Affairs Officer of the University, as prescribed by Academic Senate Policy S04-12. 





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