Nord University (Norway) и БГТУ «ВОЕНМЕХ» им. Д.Ф. Устинова (Россия)


  • слайд1

Corporate finance



1. The subject of financial management; investment and financing decisions.


2.The concept of value. Valuing financial securities.

  • Present value (PV), Net present value (NPV) and opportunity cost of capital.
  • Valuing long-lived assets, growing perpetuities and annuities. Simple and compounded interest rates, continuously conpounded rates.
  • Value of bonds, a bond's price and yield to maturity. Prices of bills and bonds.
  • Value of common stocks. Stock price and market capitalization rate. Stock price and earnings per share. Present value of growth opportunities (PVGO).
  • Criteria for investment decisions; NVP, Payback; Average return on book value, Internal rate of return on book value, Internal rate of return, Profitability index.
  • NPV rule for investment project evaluation. What to discount, Incremental cash flows, inflationary and real pay-offs, combined and mutually exclusive project.


3.Risk and return.

  • Measure of risk and uncertainty of return.. Unique risk, portfolio risk and market risk. B-coefficients and portfolio risk.
  • Foundation of portfolio theory. Risk aversion and Markowitz criterion, efficient portfolios. Capital assets pricing model (CAPM), Security market line.


4.Capital structure and the company cost of capital. Assets value, Debt value and Equity value. Average cost of capital and divisional cost of capital.


5.Methods of a project analysis. Sensitivity analysis and break-even analysis. A decision tree method. A market value rule.


6.Debt Policy and MM's propositions.

  • Financial leverage and the firm value. The law of conservation of value. Separation of investment and financing decisions.
  • Financial leverage and returns. Business risk and financial risk of debtholders and shareholders. Financial leverage and. investors' risks . Required rates of return and debt-equity ratio. Modeling company return on equity.


7.Value of options.

  • Calls, Puts. Call-Put Parity. Value of a call. An option valuation model, option delta (hedge ratio). The risk-neutral method of option valuation.
  • Black-Scholes option-valuation model. Assumption for Black-Scholes model and its interpretation. Using the Black-Scholes formula for valuing follow-on investment opportunities.


8.Valuing Risky Debt. Spot rates and forward rates. Nominal and real interest rates, expected inflation. Term structure and yields to maturity. Explaining the term structure.


9.Hedging financial risk.

  • Diversification and hedging. Hedging of value, general principles. Duration and volatility. Hedging of lease value.
  • Futures and Forwards. Commodity and financial futures. Futures trading techniques. Hedging with futures: Share futures, foreign exchange futures and commodities futures. Forward contracts and swaps.



  • Principles of leasing. Operating and financial leases, official requirements. Accounting for leasing. Reasons for leasing, lease payment calculations.
  • Valuing financial leasing. Lease versus borrowing. Debt-equivalent method for lease valuing. Profitability of lease contracts for the lessor and a lessee. Leveraged lease.


11.International financial management. Foreign exchange market, spot and forward exchange rates. Four basic relationships: interest rates and exchange rates, forwards rates and expected spot rates, interest rates and inflation rates, expected spot rates and inflation. International investment decisions.



  • 22/07/2014 - 09:37 Enrollment to HHB 2013

    We would like to inform that the following students have been selected for study at Master of Science in Business program at Nordland University: