CorpFinance

This module gives you a general overview of what finance for corporations is and how financial decisions are made by companies. Because money is the life blood of any business, a good understanding of the Corporate Finance module is the key to success in your future career.

Some things that will help you do well in this module:

• After each session, review the theory and redo the exercises done in class. Make sure you understand all the concepts and know how to apply them in exercises.

• If there is anything you do not understand, ask! If you do not want to ask in class, come and see us at the break, send an email or ask for an appointment.

In addition, it is mandatory to bring a calculator into the class (you also need it for the exam)! The calculator is a simple (scientific) one with power function. It can be bought in every supermarket with 10 to 15. You do not need to buy a financial calculator which is expensive.

Here is the course outline

https://sites.google.com/site/zhaoshan75/corpfinance/outline.pdf

Please read the useful three-page file below as soon as possible:

https://sites.google.com/site/zhaoshan75/courses/bibcorpfin/review_basics.pdf

In addition, the slides can be downloaded here

https://sites.google.com/site/zhaoshan75/corpfinance/All_2017_big_MIB.pdf

You can find the glossary https://sites.google.com/site/zhaoshan75/corpfinance/Glossary.pdf and course blog http://cfwatch.blogspot.fr/ .

Finally, please watch the Video here (https://ggsb.grenoble-em.com/mod/resource/view.php?id=79394 ) to understand what finance is and why finance is important.

We hope you will enjoy the module.

Shan Zhao

Session 2 Introduction and Corporation

Slides:

https://sites.google.com/site/zhaoshan75/corpfinance/01_corporation.ppt

Session 3 Time value of money

1. The homework for this session is exercises 1, 2, 3, 4, 6, 7 from the exercise book (which can be also downloaded from https://sites.google.com/site/zhaoshan75/corpfinance/Ex1.pdf ). Please work on them to be familiar with the time value of money. You do need to submit your homework in paper version just before the next session. I will send you the solution later. Please take a picture of your homework with your smartphone, so you can compare it with the solution.

2. A very useful summary of time value of money formulas can be found below

https://sites.google.com/site/zhaoshan75/corpfinance/summary_TVM.pdf

4. You do not need to understand the proof of perpetuity formula. But, if you want, you can read the file below.

https://sites.google.com/site/zhaoshan75/corpfinance/perpetuity.pdf

Session 4 Investment Decision Rules

1. The homework for this session is exercises 8, 9, 14 from the exercise book (The IRR in exercise 14 can be solved using Excel. Please see attached for the excel examples from the class). You do not need to submit your homework.

2. There is one key difference between PV (present value) and NPV (net present value): PV is about cash flows while NPV is about an investment. For example, we can say the PV of $6000 in year 2 but we cannot say NPV of $6000 in year 2. We only say the NPV of an investment

3. You can find the solution of the last week’s homework in my email.

Useful links

1. Major Links

2. Additional References

3. More links

4. Fun stuffs related to finance

5. Open On-line Courses

** Highly Recommended

* Recommended

1. Major Links

** http://www.ft.com (free registration using GEM email box. You can also read FT newspaper at the school Library)

** www.economist.com (a must read weekly magazine. It can be found in the school Library)