Foundations in Finance

Catalog description

This course will provide students an understanding of the major financial decisions faced by modern corporations. These activities include investing, financing, mitigating risks, and returning capital to shareholders. Investing activities include acquisitions, mergers, and major capital expenditure investments. Students will estimate investment cashflows and determine how the investment affects firm value. Financing activities include valuing and issuing debt and equity securities to fund investments. Students will evaluate overall capital structure to determine optimal financing composition. Risk mitigation activities include designing hedging strategies to hedge commodity price risk. Students will select risk coverage ratios and evaluate specific forward and option contracts. Finally, students will assess how corporations return capital to its shareholders. These activities include stock repurchases and paying dividends. Students will build financial models to assess the risks and returns of the firm's activities. The models will primarily use spreadsheet software. The spreadsheets will be augmented with VBA programs, macros, and simulation add-ins. Current finance theories will be evaluated and applied to real-world decision making using current tools and technology. This course is relevant to both financial and non-financial managers. Non-financial managers will use course insights to assess the financial risks and returns of investments in areas such as marketing and supply chain. This course provides a foundation of theories and tools used in subsequent elective courses in finance.