Finance I

Aннотация:
This is a first course in corporate finance which is designed to introduce students to the concepts and techniques necessary to analyze and implement optimal investment decisions by firms. The course studies the effect of time and uncertainty on decision making. Topics include basic discounting techniques, stock and bond valuation, capital budgeting under certainty and uncertainty, asset pricing models and efficient markets.

TOPIC
1. Net Present Value (NPV)
Goals in managing the firm. The interaction between firm decisions and capital markets. Asset valuation with known cash flows.
2. More on NPV.
Compound interest rates. After tax discount rates. IRR. Inflation.
3. Bond Valuation.
Term structure of interest rates. Forward rates and forward loans. Duration
4. Stock Valuation.
The Gordon growth model. Economic value added. Alternatives to NPV
5. Capital Budgeting.
Capital budgeting with known cash flows. Determining cash flows.
6. Risk and Return I.
Introduction to risk and return. Review of statistics.
7. Risk and Return II.
What is risk? Portfolio frontier.
8. The Capital Asset Pricing Model (CAPM).
What is the price of risk? The Capital Asset Pricing Model. Some alternatives to the CAPM.
9. Capital Budgeting Under Uncertainty.
Estimating project beta's. Leverage. Uncertainty over time.
10. Market Efficiency.
Information and capital markets.

TEXTBOOK
Richard A. Brealey and Stewart C. Myers Principles of Corporate Finance, 6. Ed.