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FINANCIAL MANGEMENT II (BS at Vilnius University 3'rd year International Business Group)


VILNIUS UNIVERSITY

BUSINESS SCHOOL

FUNDAMENTALS OF CORPORATE FINANCE

Prepared by prof. dr. Arvydas Paškevičius

The course Fundamentals of Corporate Finance introduces the fundamentals of financial management of a public company, therefore it may be attended by the students who are only starting to study financial disciplines.

The course of Fundamentals of Corporate Finance covers the concepts of cash flows, the fundamentals of financial analysis and introduces the principles of long-term financial planning and various cases of calculation of time value of money.

The purpose of the course is not only to acquaint the students with the fundamental concepts of corporate managerial finance but also to formulate practical skills while solving elementary financial problems. Therefore, the course includes not only theoretical lectures but also practical work and home assignments. The course consists of 48 hours, 5 credits.

VMA

SCHEDULE

Nr.

S.D.

Data

Time

Room

Chapter

Notes

1

Thu

07 February 2019

11:00-12:30

303a.

Stock Valuation

2

Thu

07 February 2019

13:00-14:30

303a.

Stock Valuation

Homework: Chapter 8 Questions and Problems # 1-18 and Chapter 8 Test Questions

3

Thu

14 February 2019

11:00-12:30

303a.

Stock Valuation practice

4

Thu

14 February 2019

13:00-14:30

303a.

Stock Valuation practice

Homework: Preparation for test. Self-test

5

Thu

21 February 2019

11:00-12:30

EC

 Test #1

6

Thu

21 February 2019

13:00-14:30

303a.

Net Present Value and other investment Criteria

Homework: Chapter 9 Questions and Problems # 1-6

7

Thu

28 February 2019

12:00-13:30

303a.

Net Present Value and other investment Criteria

8

Thu

28 February 2019

14:00-15:00

303a.

Net Present Value and other investment Criteria PRACTICE

Homework: Chapter 9 Questions and Problems # 7-16. Chapter 9 Test Questions

9

Thu

07 March 2019

Business trip

10

Thu

07 March 2019

11

Thu

14 March 2019

11:00-12:30

303a.

Net Present Value and other investment Criteria PRACTICE

12

Thu

14 March 2019

13:00-14:30

303a.

Net Present Value and other investment Criteria Preparation to the Test

Homework: Preparation for examination. Self-test

13

Thu

21 March 2019

11:00-12:30

EC

Test #2

14

Thu

21 March 2019

13:00-14:30

303a.

Making Capital Investment Decisions

Homework: Chapter 10 Questions and Problems # 1-5

15

Thu

28 March 2019

11:00-12:30

303a.

Making Capital Investment Decisions

16

Thu

28 March 2019

13:00-14:30

303a.

Making Capital Investment Decisions PRACTICE

Homework: Chapter 10 Questions and Problems # 6-18. Chapter 10 Test Questions

17

Thu

04 April 2019

11:00-12:30

303a.

Making Capital Investment Decisions PRACTICE

18

Thu

04 April 2019

13:00-14:30

303a.

Making Capital Investment Decisions Preparation to the Test #3

Homework: Preparation for examination. Self-test

19

Thu

11 April 2019

13:00-14:30

303a.

Project analysis and evaluation

20

Thu

11 April 2019

15:00-16:00

EC

Test #3

Homework: Chapter 11 Questions and Problems # 1-6.

21

Thu

18 April 2019

Easter holidays

22

Thu

18 April 2019

23

Thu

25 April 2019

11:00-12:30

303a.

Project analysis and evaluation

24

Thu

25 April 2019

13:00-14:30

303a.

Project analysis and evaluation PRACTICE

Homework: Chapter 11 Questions and Problems #

25

Thu

02 May 2019

11:00-12:30

303a.

Project analysis and evaluation PRACTICE

26

Thu

02 May 2019

13:00-14:30

303a.

Project analysis and evaluation PRACTICE. Preparation to the Test #4

Homework: Preparation for examination. Self-test

27

Thu

09 May 2019

11:00-12:30

EC

Test #4

28

Thu

09 May 2019

29

Thu

16 May 2019

11:00-12:30

EC

EGZAM

SYLLABUS

1.     Introduction to Corporate Finance

1.1. Corporate Finance and the Financial Manager
1.2. The Forms of Business Organization

1.3. The Goal of Financial Management
1.4. The Agency Problem and Control of the Corporation

1.5. Financial Markets and the Corporation

       Lecture Notes               Test Questions

2.     Financial Statements and Cash Flow

2.1. The Balance Sheet
2.2. The Income Statement
2.3. Cash flow

                Lecture Notes             Test Questions

3. Working with Financial Statements

3.1. Cash Flow and Financial Statements: A Closer Look
3.2. Standardized Financial Statements
3.3. Ratio Analysis
3.4. The Du Pont Identity
3.5. Using Financial Statement information

                  Lecture Notes        Q&P        Test Questions

4. Long-term Financial Planning and Growth

4.1. What is Financial Planning?
4.2. Financial Planning Models: A First Look
4.3. The Percentage of Sales Approach
4.4. External Financing and Growth

                  Lecture Notes      Q&P        Test Questions

5. The Time Value of Money

5.1. Future Value and Compounding
5.2. Present Value and Discounting
5.3. More on Present and Future Values

                Lecture Notes       Q&P        Test Questions

6. Discounted Cash Flow Valuation

6.1. Present and Future Values of Multiple Cash Flows
6.2. Valuing Level Cash Flows: Annuities and Perpetuities
6.3. Comparing Rates: The Effect of Compounding

6.4. Loan Types and Loan Amortization

                   Lecture Notes       Q&P        Test Questions

7. Interest Rates and Bond Valuation

7.1. Bonds and Bond Valuation

7.2. More on Bond Features

7.3. Bond Ratings

7.4. Some Different Types of Bonds

7.5. Bond Markets

7.6. Inflation and Interest Rates

7.7. Determinants of Bond Rates

                      Lecture Notes      Q&P       Test Questions

8. Stock Valuation

8.1. Common Stock Valuation

8.2. Some Features of Common and Preferred Stock

8.3. Stock Markets

                    Lecture Notes        Q&P        Test Questions

9. Net Present Value and Other Investment Criteria

9.1. Net present value

9.2. The Payback Rule

9.3. The Discounted Payback

9.4. The Average Accounting Return

9.5. The Internal Rate Of Return

9.6. The Profitability Index

                  Lecture Notes         Q&P           Test Questions

10. Making Capital Investment Decisions

10.1. Project Cash Flows: A First Look

10.2. Incremental Cash Flows

10.3. Pro Forma Financial Statements and Project Cash Flows

10.4. More on Project Cash Flow

10.5. Alternative Definitions of Operating Cash Flow

10.6. Some Special Cases of Cash Flow Analysis

               Lecture Notes         Q&P           Test Questions

11. Project analysis and evaluation

11.1. Evaluating NPV Estimates

11.2. Scenario and Other What-If Analyses

11.3. Break-Even Analysis

11.4. Operating Cash Flow, Sales Volume, and Break-Even

11.5. Operating Leverage

11.6. Capital Rationing

               Lecture Notes         Q&P           Test Questions

LITERATURE

1. Fundamentals of Corporate Finance, Ross, S. A. 2016.

2. Principles of Corporate Finance, Brealey, Myers, 2016.

3. Financial Management, Ray M. Brooks. 2010.

4. Capital Markets, Fabozzi Modigliani. 2010 .

Textbook materials (access can be granted individually)   Ch1   Ch2   Ch3   Ch4   Ch5   Ch6   Ch7   Ch8   Ch9  Ch10  Ch11

EVALUATION

Assessment requirements:

Analysis and solutions of tasks and problems at seminars, attendance of lectures and practical classes, interim tests, examination.

Final assessment criteria:

The grade assigned for problem solution at seminars is multiplied by 20%.

Colloquium tests shall be taken by electronic means at the Examination centre. Students are required to solve not less than 50% of all tasks presented in 4 tests. Where the grade for the colloquium is above 5, it is multiplied by 20% and shall be added to the final result. It is necessary to pass all 4 tests.

SUBJECT (MODULE) DESCRIPTION

Composition of the final accumulative grade:

The final accumulative grade shall be composed of: 

Problem solutions at seminars and lectures – 20 %

Grade from colloquium 1 – 20%

Grade from colloquium 2 – 20%

Grade from colloquium 3 – 20%

Grade from colloquium 4 – 20%

        TEST RESULTS

 Textbook




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