BCOR 3410 Fundamentals of Finance

Slides are meant as a template for lectures and should not be used in lieu of coming to class. Slides are constructed based on topics from Ross, Westerfield, and Jordan Fundamentals of Corporate Finance.

Problem Set 1 Problem Set 2 Problem Set 3 PF Topics 1 PF Topics 2 Final Topics Oral Exam Overview

What is Corporate Finance?

This chapter is an introduction to corporate finance. Topics covered include: financial management decisions, business organizations, goal of financial management, agency costs, and the flow of cash.

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Financial Statements and Cash Flow

This chapter is largely a review of financial statements. It covers key concepts and terms from the balance sheet, income statement, and cash flow statement. We also introduce the concept and calculation of free cash flow.

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Financial Statement Anlysis

This lecture covers the calculation and understanding of standardized financial statements and financial ratio. Students will be able to analyze firm performance by examining trends and comparing with competitors (or peers)..

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Introduction to Valuation

This module introduces the most important topic and skill in this course -- Time Value of Money. You will learn the basics of calculating present value, future value, discount rate, and number of periods.

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Discounted Cash Flow Valuation

In this module we will extend our discussion on Time Value of Money. We will add (un)even cash flows to the calculations. We will also cover annuities, perpetuities, including a growth rate, EAR vs APR, and briefly discuss loan types.

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Interest Rates and Bond Valuation

This module will discuss bonds. Including valuation, terms, types, ratings and term structure. We also discuss real vs nominal rates.

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Capital Budgeting Tools

This module will use the our Time Value of Money skills to evaluate potential investments. We will cover capital budgeting tools such as Net Present Value, Payback Period, and Internal Rate of Return. We will cover calculation as well as the correct decision criteria. Non-conventional cash flows and mutually exclusive projects are also discussed.

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Making Capital Investment Decisions

In this module we will learn how to calculate expected future cash flows for a project. Topics include incremental cash flows, sunk costs, opportunity costs, depreciation, and pro forma financial statements.

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Raising Capital and Payout Policy

This discusses the process of raising capital through venture capital, an initial public offering, and a seasoned equity offering. We also look at the manner in which firms return cash to shareholders — dividends and repurchases.

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Stock Valuation

This chapter covers stock valuation. We will introduce the concepts of intrinsic and relative valuation and valuation tools such as Dividend Growth Model and Trading Multiples. Common terms and features associated with stocks and the stock markets are also covered.

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Risk and Return

An introduction to risk and return. We cover average vs Geometric return, the efficient market hypothesis, calculation of portfolio returns and variances, diversification and the capital asset pricing model (CAPM).

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