Excerpt from course description

Basic Financial Management


The essence of business administration includes corporate finance (=investment and financing). Good knowledge within these areas is a necessary prerequisite to understand the economic content of investment and financing decisions, obtain decision-relevant information, discuss and assess alternatives, make correct decisions and convey relevant and useful information.
The aim of the first course within the field of corporate finance is to provide the students with essential basic knowledge and skills, so that they can take part in discussions on problems in finance and carry out simple analyses within the field, make correct decisions and communicate the results of the analyses in a comprehensible manner.
The course Basic Financial Management is mainly focused on capital budgeting. By studying the main activities carried out in a company as an investment project over several periods, emphasis is placed on considering all economic effects of the project and of taking a long-term perspective (over several years, until the project is completed). The course therefore starts with capital budgeting. The finance area also focuses on how uncertainty affects decisions on which investments should be made (the risk and return on individual projects and portfolios) and owners, creditors and companies capital costs.

Course content


1. Introduction and Overview: ch. 1
2. How to Calculate Present Value: ch. 2
3. Valuing Bonds: ch. 3
4. The value of common stocks: ch. 4
5. Net Present Value: ch. 5
6. Making Investment Decisions: ch. 6
7. Introduction to risk and return: ch. 7
8. Capital Asset Pricing Model:ch. 8
9. Risk and Cost of Capital: ch. 9



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