Παρουσίαση/Προβολή

(ECON579) -  Δημήτρης Καινούργιος

Περιγραφή Μαθήματος

This course focuses on financial decision making in the modern corporation. The basic issues include: Time value of money (Present value, Future value, Perpetuities), Valuing stocks and bonds, Capital budgeting (Net Present Value, Internal Rate of Return, Payback period rule, Discounted Payback period rule, Profitability index), Long-term financing (Common stock, Preferred stock, Long-term debt), Cost of Capital, Capital structure and Debt Policy (Financial leverage, Modigliani and Miller Propositions, Taxes, Costs of financial distress, Weighted Average Cost of Capital), Dividend policy.

 

Course Objectives

 

Students will be able to:

• Identify elements of corporate investment projects.
• Recognize elements and sources of corporate financing.
• Define the present value of money.
• Recognize the formulas involved in solving for different examples of present value.
• Recognize the formulas involved in solving for different examples of future value.
• Use a financial calculator to practice solving present and future value problems.
• Evaluate investments by calculating interest rates, annual bond yields, and stock prices.
• Discuss the factors that affect interest rates and borrowing costs for financing projects.
• Recognize the advantages of using Net Present Value versus Internal Rate of Return to calculate the value of a project.
• Recognize the formulas for the after-tax weighted average cost of capital and capital asset pricing model and how they are used to determine the cost of capital.
• Identify the formulas for calculating cash flows resulting from investments and how they are used to determine the profitability of a project.
• Recognize factors influencing a financing decision and characteristics influencing the associated debt/equity mix.
• Recognize the significance of the debt-to-equity ratio to the financing decision and why firms may choose debt.
• Recognize the effects of leverage and its relationship to cost of equity (how financing decisions affect the value of a firm).

 

Textbooks and Reading

 

The main textbooks of the course are:

1. Brealey, R. A., Myers S. C, Principles of Corporate Finance, Seventh Edition, McGraw-Hill, 2003 (or any later edition).

2. Ross, S., Westerfield, R.W. and Jordan, B.D., Fundamentals of Corporate Finance, McGraw-Hill (Irwin Series in Finance), 6^th ed., 2002 (or any later edition).

For those interested in further reading the following books are recommended:

 

3. Brigham, E. F., Gapenski C. and Ehrhardt M. C., Financial Management, Theory and Practice, The Dryden Press, New York, 2004.
4. Brigham, E. F. and Houston F., Fundamentals of Financial Management, Ninth Edition, South-Western Thomson Learning, 2006.
5. Arnold, Corporate Financial Management, Second Edition, Financial Times-Prentice Hall, 2002.

Ημερομηνία δημιουργίας

Τετάρτη 27 Μαρτίου 2019