2012/2013
BA-2PCF Principles of Corporate Finance
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English Title
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Principles of Corporate Finance
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Language
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English
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Exam ECTS
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7.5
ECTS
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Type
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Mandatory
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Level
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Bachelor
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Duration
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One Semester
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Course period
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Spring
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Time Table
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Please see course schedule at e-Campus
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Study board
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Study Board for Asian Study Programme
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Course coordinator
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Evis Sinani
- Department of International Economics and Management
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Main Category of the Course
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Finance
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Economics, macro economics and managerial economics
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Last updated on 05-02-2013
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Learning objectives
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At the end of the course the students should be able to:
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define and discuss key concepts from all relevant theories and models introduced in the course.
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Apply the correct financial management techniques to a given issue.
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Calculate the technical tools of financial management from the perspective of a chief financial officer in decision-making.
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Interpret the results of the analysis with respect to the efficiency of decision making
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Examination
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Principles of Corporate Finance:
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Type of test
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Written Exam
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Marking scale
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7-step scale
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Second examiner
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No second examiner
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Exam period
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Summer Term
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Aids
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Closed Book
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Duration
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4 Hours
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4-hours written examination based on one or more questions in relation to the course literature
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Course content
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This course is an overview of the principles of corporate finance. Importance is placed on techniques related to investment decisions and financial decisions made by companies. Financial managers in corporations work with other managers to identify investment opportunities, to analyze and value the opportunities and to decide whether and how much to invest, as well as decide how to raise the money to finance corporation’s investments.
Therefore we start with an introduction of what a corporation is, and describe the role of a corporation’s financial manager. We then proceed with how to measure corporate performance (value added, efficiency, profitability etc), since the main goal of corporations is maximizing the current market value.
Since companies invest in a lot of things such as tangible or intangible assets, the decision on capital outlays is among the most significant a firm will have to make. In introducing decision making on capital expenditure, first the students will be exposed to “time value of money” calculations and then proceed to the fundamentals of valuation of bonds and stocks, emphasizing present value techniques. These techniques will be also useful during capital budgeting decisions, which involve comparing the different investment criteria in the presence of capital shortage. After careful grounding in valuation practice and theory, the concepts of the cost of capital and capital structure will be examined, covering risk-return analysis in capital budgeting. Finally, the course introduces the role of debt financing to the value of the company and compares the different asset management techniques.
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Teaching methods
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Mix of lectures, exercises and casework. Although this is a generic undergraduate finance course, given that the focus of the ASP program is on Asia, this course will integrate this framework by relying for the most part of the teaching material on examples and cases materials from an Asian perspective.
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Further Information
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The course is especially integrated with the ASP courses in Microeconomics and Managerial Economics, as well as the other courses at the 1st, 2nd and 3rd year.
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Expected literature
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Course Literature:
Main Text Book
Richard A. Brealey, Steward C. Myers, and Alan J. Marcus. Fundamentals of Corporate Finance. Sixth edition, McGraw Hill.
Case Studies Book
StanleyBlock, Geoffrey Hirt. Case Book on Fundamentals of Corporate Finance. 12th edition. McGraw Hill.
The cases to be used in the course will be interpreted from an Asian perspective.
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Last updated on 05-02-2013
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