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FINANCIAL MANGEMENT (IBS at Vilnius University 3'rd year International Business Group and Business and Politics in Central and Eastern Europe Group)

VILNIUS UNIVERSITY

INTERNATIONAL 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.

SUBJECT (MODULE) DESCRIPTION

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

LITERATURE


1. Fundamentals of Corporate Finance, Ross, S. A. 2010.

2. Principles of Corporate Finance, Brealey, Myers, 2010.

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



International business 3IBBA

Business and Politics in Central and Eastern Europe

Financial Management

Nr.

S.D.

Data

Time

Room

Chapter

Notes

1

Thu

3-Sep

9:00-10:30

213

Introduction to the Course. Introduction to Corporate Finance

2

Thu

3-Sep

11:00-12:30

213

Introduction to Corporate Finance. The preparation to the test

3

Thu

10-Sep

9:00-10:30

213

Financial Statements and Cash Flow

4

Thu

10-Sep

11:00-12:30

213

Financial Statements and Cash Flow. The preparation to the test

5

Thu

17-Sep

9:00-10:30

213

Financial Statements and Cash Flow. The preparation to the test

6

Thu

17-Sep

11:00-12:30

213

Working With Financial Statements

7

Thu

24-Sep

9:00-10:30

EC

Test #1 (Ch1-2)

8

Thu

24-Sep

11:00-12:30

213

Working With Financial Statements

9

Thu

1-Oct

9:00-10:30

213

Working With Financial Statements. Practice and the preparation to the test

10

Thu

1-Oct

11:00-12:30

213

Working With Financial Statements. Practice and the preparation to the test. Long-term Financial Planning and Growth

11

Thu

8-Oct

9:00-10:30

213

Long-term Financial Planning and Growth

12

Thu

8-Oct

11:00-12:30

213

Long-term Financial Planning and Growth. Practice and the prteparation to the test

13

Thu

15-Oct

9:00-10:30

EC

Test #2 (Ch3-4)

14

Thu

15-Oct

11:00-12:30

213

The Time Value of Money Discounted Cash Flow Valuation

15

Thu

22-Oct

9:00-10:30

213

Discounted Cash Flow Valuation practice

16

Thu

22-Oct

11:00-12:30

213

The Time Value of Money Discounted Cash Flow Valuation

17

Thu

29-Oct

9:00-10:30

213

Discounted Cash Flow Valuation. Practice and the preparation to the test

18

Thu

29-Oct

11:00-12:30

213

Interest Rates and Bond Valuation

19

Thu

5-Nov

9:00-10:30

213

Test #3 (Ch5-6)

20

Thu

5-Nov

11:00-12:30

213

Interest Rates and Bond Valuation

21

Thu

12-Nov

9:00-10:30

EC

Interest Rates and Bond Valuation. Practice and the preparation to the test

22

Thu

12-Nov

11:00-12:30

213

Interest Rates and Bond Valuation. Practice and the preparation to the test.

23

Thu

19-Nov

9:00-10:30

213

Interest Rates and Bond Valuation. Practice and the preparation to the test.

24

Thu

19-Nov

11:00-12:30

213

Interest Rates and Bond Valuation. Practice and the preparation to the test.

25

Thu

26-Nov

9:00-10:30

EC

Test #4 (Ch7)

26

Thu

26-Nov

9:00-10:30

EC

Exam


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 10%.

Where a student has missed not more than 25% of the total lectures and practical classes (seminars), 1 point or 10% are added to the final grade.

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 four tests. Where the grade for the colloquium is above 4, it is multiplied by 20% and shall be added to the final result. It is necessary to pass all 4 tests. Students who during semester have passed all tests and have accumulated positive assessment may be absent exam.

Composition of the final accumulative grade:

The final accumulative grade shall be composed of:

Problem solutions at seminars and lectures – 10 %

Attendance of lectures and practical classes – 10%

Grade from colloquium 1 – 20%

Grade from colloquium 2 – 20%

Grade from colloquium 3 – 20%

Grade from colloquium 4 – 20%

       TEST RESULTS

  

 

 



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