This course is an intermediate economics course that examines and applies pivotal issues in corporate finance: financial statements, financial evaluation methods, capital cost and structure, and dividend policy. The concept of net present value, adjusted for taxes, uncertainty, and strategic concerns, is used to analyze how investment and financing decisions interact to affect the value of the firm. Throughout the course, economic intuition, principles and implications are our focus. If time allowed, we may also introduce some basics of financial derivatives and issues in international corporate finance. Computer-aid exercises and problems will be assigned roughly weekly, and there will be two midterms and a final exam.
It is important for students to provide feedback in time throughout the course to ensure positive learning and teaching experience. If students have trouble keeping up with the class material or the workload, please feel free to contact the instructor. It is the instructor's responsibility to support students to make progress and succeed in the course.
Course Objectives
This course aims to build a solid foundation of economics for corporate finance issues. After completing the course, student will become familiar with the language used extensively and topics widely discussed in the field. Moreover, students will acquire practical computational and modeling tools in finance. The following bullet points include specific learning goals and serve as a guide for your study and exam:
Interpret basic financial statements: the balance sheet and income statement
Acquire compounding and discounting methods in deterministic valuation models
Establish relevant criteria for choosing among alternative investments decisions
Understand the fundamentals of asset return, risk and the efficient market hypothesis
Perform corporate capital structure analysis and understand its determinants
Apply Excel Spreadsheet to financial calculation and modeling in corporate finance
Throughout the course, all students are encouraged to 1) Raise questions and participate in the class discussion; 2) Provide feedback and suggestions regarding teaching and course organization; 3) Solve the problem sets together; 4) Assist in grading the assignments on a voluntary basis; 5) Improve the learning and teaching process.