The finance discipline has over the last decades matured to the point where there exists a sound body of theory. In this introductory course, the theory of finance will be illustrated and applied to problems in corporate finance.
- Finance- An Introduction
- Accounting Statements and Cash Flows
- Value and Capital Budgeting
- Net Present Value
- Valuation of Bonds and Stocks
- Alternative Investments Rules
- Capital Budgeting
- Capital Market Theory
- Risk and return
- The Capital Asset Pricing Model
- Risk, Return and Capital Budgeting
- Capital Structure and PayoutPolicy
- Overview of Capital Structure Theories
- Payout Policy
- Introduction to valuation
Learning outcome knowledge
Learning to cope with routine problems is easy, for instance by developing a list of rules for dealing with such problems. However, full reliance on the list-of-rules approach is insufficient as problems that do not fit these rules will be encountered. A thorough understanding of financial theory will facilitate transcending the simple rules.
The course focuses on the understanding of the way information is conveyed between companies and investors, of the main sources of value creation within firms, of the importance of competition and incentives.
By the end of the course, students should have become familiar with corporate financial statements, the time value of money, the determinants of interest rates, the term structure of interest rates, basic bond and stock valuation, capital budgeting, capital structure, payout policy, and basic valuation of companies and projects including the effects of leverage.
- Written assignment: 20%
- Written exam: 20%
- Written exam: 60%