Fundamentals of corporate finance (intensive course)

EM054M2JA1

Program
PGE
Visitants
UE
Fundamentals of corporate finance
Semester
A
Discipline
Finance
Contact hours
27 H
Number of spots
45
ECTS
5
Open to visitors
Yes
Language
Coordinator
Fergal O'Brien

List of lecturers

Lecturer(s) Email Contact hours - lecture
Fergal O'BRIEN fergal.g.obrien@ul.ie 27 h

Pedagogical contribution of the course to the program

No educational contribution associated with this course for this program.

Description

The aim of this course is to develop students’ understanding of fundamental topics in corporate finance. A key focus of this course is on discounted cash flow techniques, and their applications in corporate finance. This course introduces the concept of the time value of money, and the popular methods of project appraisal including the net present value method, the payback period, the book rate of return, internal rate of return, profitability indices, etc. Qualitative aspects of capital budgeting and investments are also examined. The various financial assets and capital markets are introduced. The concept of market efficiency and the link between risk and return are illustrated by reference to historical returns. Basic issues around asset valuation are also discussed, and students are introduced to derivative instruments, and how they may be used both defensively and aggressively. The role of risk underpins the key concepts and features heavily in the course content.

Teaching methods

Face-to-face

- Lectures
- Tutorials

In group

- Exercises
- Oral presentations
- Projects
- Case studies/texts

Interaction

- Discussions/debates

Others

No items in this list have been checked.

Learning objectives

Cognitive domain

Upon completion of this course, students should be able to
  • - (level 1) outline the role of financial managers in modern business organisations.
  • - (level 1) recognize the trade-off between risk and return
  • - (level 1) outline the various forms of basic derivative instruments and their uses in risk management
  • - (level 3) calculate present and future values of streams of cash flows
  • - (level 3) calculate the payback period, accounting rate of return, net present value and internal rate of return of a project
  • - (level 3) calculate , at a basic level, the value of equities, bonds and derivatives
  • - (level 5) interpret financial data to make informed business decisions
  • - (level 5) evaluate risky projects using a range of capital budgeting techniques

Affective domain

Upon completion of this course, students should be able to
None affective domain have been associated with this course yet

Outline

Indicative: Session 1 – Introduction to Finance Session 2 – Capital Markets & the Goal of Modern Business Organisations Session 3 – The Time Value of Money Session 4 – Investment & Compounding Session 5 – In-Class Assessment Session 6 – Introduction to Evaluating Risky Projects Session 7 – Net Present Value & Internal Rate of Return Session 8 – Payback & Other Capital Budgeting Techniques Session 9 – Applied Capital Budgeting I Session 10 – Applied Capital Budgeting II Session 11 – Sensitivity & Scenario Analysis Session 12 – Capital Budgeting Case Study Session 13 – Group Project Introduction Session 14 – Introduction to Capital Markets Session 15 – Bonds Session 16 – Equities Session 17 – Futures Session 18 – Options Session 19 – Bond Valuation, Yields & Ratings Session 20 – Equity Valuation Session 21 - WACC Session 22 – Option Pricing Session 23 – Real Options Session 24 – Risk & Return I Session 25 – Risk & Return II Session 26 – Group Work Summary Session 27 – Final Exam

No prerequisite has been provided

Knowledge in / Key concepts to master

Comfortable with relatively basic mathematics. Very basic Excel knowledge an advantage

Teaching material

Mandatory tools for the course

No items in this list have been checked.

Documents in all formats


- Newspaper articles

Moodle platform

- Upload of class documents

Software

- Pack Office (Word, Excel, PowerPoint, Access)

Additional electronic platforms

No items in this list have been checked.

Recommended reading


Fundamentals of Corporate Finance, Hillier, Ross, Westerfield and Jordan (2022), 4th Ed. McGraw Hill

Mollah, M.A.S., Rouf, M.A. and Rana, S.M.S. (2021), "A study on capital budgeting practices of some selected companies in Bangladesh", PSU Research Review, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/PRR-10-2020-0035 de Andrés, P., de Fuente, G., & Martín, P. S. (2015). Capital Budgeting Practices in Spain. BRQ Business Research Quarterly, 18(1), 37–56. https://doi.org/10.1016/j.brq.2014.08.002 Ipsmiller, E., Brouthers, K. D., and Dikova, D. (2019) 25 Years of Real Option Empirical Research in Management. European Management Review, 16: 55– 68. https://doi.org/10.1111/emre.12324.

EM Research: Be sure to mobilize at least one resource

Textbooks, case studies, translated material, etc. can be entered
No reading material has been provided.

Assessment

List of assessment methods

Intermediate assessment / continuous assessment 1Other (date, pop quiz, etc.) : 0
Written / Individual / English / Weight : 15 %
Details : Individual calculation-based test 15% (during first week), testing ability to carry out basic finance calculations
Intermediate assessment / continuous assessment 2Other (date, pop quiz, etc.) : 0
Oral / Group / English / Weight : 25 %
Details : Group project at start of the second week to perform a basic commentary on an assigned financial market (25%)
Final evaluationLast class
Written (60 Min.) / Individual / English / Weight : 60 %
Details : -
No assessment methods have been attributed to this course yet.