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

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  • слайд1

Corporate finance

CORPORATE FINANCE

PLAN OF LECTURES

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

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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.

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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.

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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.

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

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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.

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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.

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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.

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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.

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10.Leasing.

  • 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.

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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.

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news

  • 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:

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