In this introductory course we will introduce the students to a world looked at from a finance manager’s point of view. The three broad sets of decisions that finance managers undertake are—decisions on where to invest the resources or funds that the business has raised, either internally or externally (the investment decision), decisions on where and how to raise funds to finance these investments (the financing decision), and decisions on how much and in what form to return funds back to the owners (the dividend decision). The course will include the central concepts of modern finance: basic accounting principles and financial statements analysis, net present value, valuation models, efficient markets, and the trade-off between risk and return, fundamentals of capital structure and an introduction to corporate dividend policies and their implications for valuation. The course uses a mix of theory and practice for exposition.
Prerequisite: ECO 2101 (Microeconomic Theory I)