The aim of this course is to introduce the student, in its role as a future firm manager, to the basic notions of finance and to the main criteria of an investment decision. The course provides the tools any manager should use to correctly quantify the impact of a decision in order to correctly evaluate its value creation.
This course illustrates the basic concepts of corporate finance and modern finance theory. Concepts such as the valuation of risk and the weighted average cost of capital of a firm are covered. At the end of the course, students should be able to make simple capital budgeting decisions and to evaluate financial securities.
Other main takeaways are: the estimation of cash flows, understanding the difference between earnings and cash flows, the net present value of cash flows and other methods of cash flow valuation, capital markets and the price of risk, capital asset pricing model (CAPM).
To sum it up, this course allows the student to: learn the main methods of project valuation, know the principles underlying the pricing of risk in financial markets, know the determinants of the cost of capital for corporations, compute cash flows and their net present value and internal rate of return, and compute the cost of capital for a corporation.