Review A. The Time Value of Money
Review B. Interest Rates
Part I: Short-Term and Long-Term Financing
Topic 1. Working Capital Management
Topic 2. Short-Term Financial Planning
Topic 3. Equity and Debt Financing
Topic 4. Leasing
Part II: Investment Decisions
Topic 5. Investment Decision Rules
Topic 6. Real Options
The general objective of the course is to provide students with a broad overview of corporate finance, with special focus on the most relevant finance decisions that managers of any business type (large or small) will have to face. The introduction to the course includes two chapters devoted to reviewing the time value of money and interest rate quotes. Then, the topics covered in Part I include short- and long-term financing (focusing on working capital management, equity and debt financing, and leasing). Finally, in Part II, the course deals with investment decisions (covering investment decision rules and real options).
After completing the course, students should:
- Be able to compute the cost of trade credit and compare it to alternative sources of financing.
- Understand the different types of financing that may be used for short-term cash needs.
- Know the ways in which a private company can raise outside capital and understand the effects of a company founder selling stock to an outsider.
- Identify typical sources of debt for corporations and understand their specificities.
- Know the rights and obligations of each party in a lease contract and be able to compute the cost of leasing.
- Recognize different investment decision rules (e.g., NPV, IRR, payback period) and the advantages and disadvantages of each of them.
- Understand the usefulness of real options for corporate decision-making and identify different types of real options
Students should attend at least 80% of the course. You can miss at most 5 hours!
Students that do not reach the minimum attendance rate (no matter if distance or in person) will not be able to pass the course.
The course will consist of: (a) lectures, in which the different topics will be presented, and (b) seminars devoted to the solution of numerical problems and to the discussion of business cases. Students are expected to prepare the exercises in advance, before solving them in class.
The final grade of the course will be a weighted average of the following three components:
1. Active participation and solution of exercises: 25% of the grade
2. Intermediate exam: 25% of the grade
3. Final exam: 50% of the grade
Each component will be graded based on the following scale (percentage grade):
- 91-100% = Very good
- 81-90% = Good
- 66-80% = Satisfactory
- 51-65% = Sufficient
- 0-50% = Not sufficient
Registration should be made via LPIS.
Maximum number of participants: 30.
Students should have basic knowledge of finance concepts and financial mathematics.
Ignacio Requejo: email@example.com