Admission requirements
None
Description
Financial management is the subject which deals with both sides of the corporate balance sheet: which projects should a corporation take on and what is the best way to finance them? In Financial management we study how corporation’s take investment decisions, but especially how they should take them. What return should a corporation make on its investments? How do you value options in an investment project? How do you deal with risk in an investment project? How do you value an asset or a corporation? If a project is worthwhile, in an efficient capital market a corporation should always be able to find funding for it. Are capital markets efficient? How do you value bonds and stocks? Does it matter how much dividend a corporation pays out to its shareholder? Are hostile takeovers a good or a bad thing? In this course we will focus on the big questions in corporate finance.
Topics covered:
Students will estimate cash flows and risk and use these values to compute NPV and IRR. Students will be able to adjust cash flows to account for changes in working capital, asset disposal, and depreciation; make purchase decisions based on these calculations; explain how to make decisions when capital constraints exist or when projects are mutually exclusive.
Students will solve equations involving a single payment, an annuity or complex cash flows. Students will choose among investment opportunities, payment arrangements, etc. based on these calculations.
Students will evaluate corporate performance using comparative analysis. Based on this analysis they can relate strengths and weaknesses and make and support recommendations to improve financial performance and create sustainable long-term value.
Course objectives
By the end of this course, the student should be able to:
1. use the basic techniques for investment evaluation
2. ink the major debates in corporate finance to real life cases
3. have a real understanding of the major debates in corporate finance:
Utilize time value of money (based on i.e. NPV and IRR) and financial statement analysis in capital budgeting decision making;
Discuss the impact of risk on cost of capital;
Estimate the intrinsic value of investment securities and determine whether or not they should be purchased given the current market price;
Discuss the benefits and disadvantages of selecting debt or equity to finance corporate activities.
Timetable
Semester 1:
Course: October 15th – November 5th 2018
Exam: November 9th 2018, 14:00 – 17:00 hrs
Retake: January 21st 10.00 – 13.00 hrs
Please check the latest version of the schedule on the SBB website.
Mode of instruction
3-hour interactive lectures, presentations and discussions every week, 4 weeks long.
Course Load
6 3-hour interactive classes/case discussion seminars
Case preparation before each seminar
Final 3-hour exam
Assessment method
Active participation (25%)
Presentations/case studies (25%)
Final (written) exam (50%)
In order to pass students must have a total grade of at least a 6 (six).
Blackboard
Yes (students will be enrolled in Blackboard one month before the start of the course).
Reading list
A study pack with course readings and case studies can be purchased at the start of the course. More information will follow on Blackboard after registration.
In addition, the following book will be used:
Brigham/Ehrhardt/Fox, Financial Management: Theory and Practice - 9781473729605
Please consult the course syllabus on Blackboard before purchasing books.
Registration
Students have to register for the course in uSis. The registration in uSis for 2018-2019 will open two months before the start of the academic year. Click here for instructions.
This course is part of the SBB minor. If you would like to follow this course as an elective, please contact the programme coordinator to discuss the possibilities.