Corporate Finance

Course Leader: Dr Jose Gerardo De La Vega Meneses

Home Institution: UPAEP University, Puebla, Mexico

Course pre-requisites: None.

Course Overview
This course on Corporate Finance is designed to provide an insight into the principles and techniques that are fundamental to corporate finance. The course will provide a broad overview of corporate finance and discuss the important concepts that are required for valuing assets and projects such as time value of money and various tools that are commonly used to evaluate investment decisions. While most of the discussion will be in the context of investment decisions for firms, we will also examine applications of these principles to personal financial decisions. 

Learning Outcomes
Obtain a broad functional knowledge of basic theory and practice of finance.

Access and analyze financial statements to evaluate the financial health of the firm and the strategies it employs to create value for its shareholders.

Develop and apply financial modeling skills for the valuation of the firm and of individual capital assets, securities, and other investment vehicles.

Through experiential learning, apply principles of asset allocation and diversification to formulate portfolio strategies.

Understand and apply various measures to evaluate portfolio performance.

Demonstrate effective skills in written and oral communication, and in teamwork.

Course Content

Overview of Corporate Finance

 

Introduction  Forms of Business Organization

Role of the Finance Manager

Assets and Sources of Funds

Separation of Ownership and Management

The Corporation and the Stock Market

 

Time Value of Money

 

Introduction

Simple and Compound Interest Rate

Annual Percentage Rate and Effective Annual Rate

Future Value and Present Value

Valuing a Perpetuity

Valuing an Annuity

Planning for Retirement

 

Bonds and Stocks

 

Introduction

Bond Terminology and Valuation

Yield to Maturity

Risk of Investing in Bonds

Stock Price, Dividends and Return

Multiples Based Evaluation

 

Capital Budgeting: Decision Tools

 

Introduction

Payback Period

Net Present Value (NPV)

Internal Rate of Return (IRR)

NPV vs IRR

Profitability Index

 

Capital Budgeting: Estimation and Applications

 

Introduction

Forecasting Earnings

Estimating Free Cash Flow

Discount Rate for Capital Budgeting

Mini Case Study

 

Final Exam

 

 

Final exam

 

 

Instructional Method

There are several assigned activities in this course: essays, homework, exams, and class participation.

Required Course Materials

Basel Committee on Banking Supervision. (2013). Consultative Document: Fundamental review of the trading book: A revised market risk framework. (Basel, Switzerland: Bank for International Settlements).

Bodie, Z., Kane, A., Marcus, A. J., & Jain, R. (2014). Asset Classes and Financial Instruments. In Investments(pp. 32–60). McGraw–Hill Education, Asia Global Edition.

Clements A. E., Hurn A. S., & Volkov V. V.(2015). Volatility transmission in global financial markets. Journal of Empirical Finance, 32, 3–18.

 Jorion, P. (2006). Value at risk: The new benchmark for controlling market risk. Chicago: IRWIN.

Assessment

Assessment / Deliverable:

Individual or group:

% of final grade:

daily quizzes/Problem Based Learning

Individually

50%

Exams

Individually

10%

Research activities (Research Based Learning)

In Groups

10%

Final Exam

Individually

20%

Class participation/assistance

Individually/in groups

10%