- Code
- EMS 115
- Name
- Introduction to Finance
- Semester
- 1
- Lecture hours
- 3.00
- Seminar hours
- 1.00
- Laborator hours
- 0.00
- Credits
- 3.50
- ECTS
- 5.00
- Description
-
The aim of this course is to provide a comprehensive introduction to the basic principles of finance, with an emphasis on corporate finance. The concepts studied in this course will serve as the basis for other courses such as investment and corporate finance. It focuses on financial markets and the tools and knowledge needed to understand how these markets work. The role of finance and the financial system (including banks, other financial intermediaries and the central bank) in a country's economy will also be discussed integrally throughout the course. Investments are another important discipline that will be covered. Savings, interest rates and current accounts of funds are also important topics covered during the course. All those concepts aim one ultimate goal, that of making a rational decision-making process in finance.
- Objectives
-
The objective of this course is to provide a comprehensive introduction of the fundamental principles of finance, with emphasis on topics in the corporate finance area. The concepts developed in this course form the foundation for all successive finance courses, such as investments and corporate finance. After the course, the students are expected to: (1) consolidate the basic finance concepts involved in the course to prepare for the further study in finance; (2) develop problem-solving ability with the philosophy of finance such that they can handle the financial problems in new environment with the tools and techniques learnt from the course.
- Java
- Tema
- 1
- Syllabus Presentation Course Presentation, Evaluation Method and Textbook
- 2
- Chapter 1- Introduction to Finance This chapter aims to clarify the objectives of a firm and describe the role of finance in a business; make a distinction between the legal forms of firms and explain the basic principles of finance, their importance and the importance of ethics and trust. (Fundamentals of Finance: The Logic and Practice of Financial Management, 9th Edition. Arthur J.Keown, John D. Martin, J.William Petty. Pearson Series in Finance, 2017. Chapter I. Pages 26- 45.)
- 3
- Chapter II- Financial Markets and Interest Rates This chapter describes the basic components of financial market, explains how funds are raised in capital markets, provides insights into rates of return, and clarifies the basics of setting interest rates and the well-known theories of interest rate structures. (Fundamentals of Finance: The Logic and Practice of Financial Management, 9th Edition. Arthur J.Keown, John D. Martin, J.William Petty. Pearson Series in Finance, 2017. Chapter II. Pages 46- 77.)
- 4
- Chapter III - Understanding Financial Statements and Cash Flows (Part I) Initially, the chapter makes a presentation of the two main statements: the Balance Sheet and the Income Statement, through which we further determine the financial position and the profit of a firm at a given moment. The other objective of the chapter is to measure the cash flows and explain the difference between GAAP and IFRS. The last part of the chapter provides a description of the limitations of the financial statements and the various calculations of income statement and cash flow statment. (Fundamentals of Finance: The Logic and Practice of Financial Management, 9th Edition. Arthur J.Keown, John D. Martin, J.William Petty. Pearson Series in Finance, 2017. Chapter III Pages 78- 123.)
- 5
- Chapter III - Understanding Financial Statements and Cash Flows (Part I) Initially, the chapter makes a presentation of the two main statements: the Balance Sheet and the Income Statement, through which we further determine the financial position and the profit of a firm at a given moment. The other objective of the chapter is to measure the cash flows and explain the difference between GAAP and IFRS. The last part of the chapter provides a description of the limitations of the financial statements and the various calculations of income statement and cash flow statment. (Fundamentals of Finance: The Logic and Practice of Financial Management, 9th Edition. Arthur J.Keown, John D. Martin, J.William Petty. Pearson Series in Finance, 2017. Chapter III Pages 78- 123.)
- 6
- Review of Chapter I, II, III Quiz No.1: Discusions and solution of Quiz
- 7
- Chapter IV - Measuring Firm's Financial Performance This chapter explains the purpose and importance of financial analysis; measures key financial links as well as using a data set to evaluate the performance of a company; and as a conclusion describes the limitations of the analysis of financial reports. (Fundamentals of Finance: The Logic and Practice of Financial Management, 9th Edition. Arthur J.Keown, John D. Martin, J.William Petty. Pearson Series in Finance, 2017. Chapter IV Pages 130-175.)
- 8
- Midterm Exam
- 9
- Chapter V- Time Value of Money This Chapter explains the mechanism of compound interest and the behavior of value of money in the present; the annuity is clarified; determines the future or present value of money and how to make interest rates comparable. (Fundamentals of Finance: The Logic and Practice of Financial Management, 9th Edition. Arthur J.Keown, John D. Martin, J.William Petty. Pearson Series in Finance, 2017. Chapter V Pages 176-219.)
- 10
- Chapter VI - Understanding and Measuring Risk and Return Innitially, the definition and measurement of the expected return for a single investment is given, as well as the measurement of the respective risk; compares the historical link between risk and return on equity markets and explains how diversified investments affect risk and expected return. (Fundamentals of Finance: The Logic and Practice of Financial Management, 9th Edition. Arthur J.Keown, John D. Martin, J.William Petty. Pearson Series in Finance, 2017. Chapter VI Pages 220- 259.)
- 11
- Chapter VII - Valuation and Characteristics of Bonds A distinction is made between the types of bonds, the relevant terminology and characteristics are given; identification of values and factors that determine bonds; describes the basic process of asset valuation and bond valuation and explains three important links that exist in bond valuation. (Fundamentals of Finance: The Logic and Practice of Financial Management, 9th Edition. Arthur J.Keown, John D. Martin, J.William Petty. Pearson Series in Finance, 2017. Chapter VII Pages 260- 291.)
- 12
- Chapter VIII - Valuation and Characteristics of Stocks Identification and evaluation of preferred stocks; identification of the basic characteristics of common stocks and their evaluation; calculating the expected rate of return on stocks. (Fundamentals of Finance: The Logic and Practice of Financial Management, 9th Edition. Arthur J.Keown, John D. Martin, J.William Petty. Pearson Series in Finance, 2017. Chapter VIII Pages 292- 317.)
- 13
- Review of Chapter V, VI, VII, VIII Quiz No.2: Discusions and Solution of the Quiz
- 14
- Chapter IX - Cost of Capital Key definitions and concepts of capital cost; assessment and determination of the individual source of capital; calculation of weighted average of the cost of capital of a firm; calculation of cost-sharing of capital. (Fundamentals of Finance: The Logic and Practice of Financial Management, 9th Edition. Arthur J.Keown, John D. Martin, J.William Petty. Pearson Series in Finance, 2017. Chapter IX, pp. 318-349.)
- 15
- Film The Wolf of Wall Street
- 16
- Final Exam
- 1
- Understand fundamental principles of finance
- 2
- Understand time value of money and apply correctly valuation methods
- 3
- Understand relationship between risk and return
- 4
- Understand and apply properly the decision making criteria
- 5
- Develop problem-solving ability with the tools and techniques learnt from the course.
- Quantity Percentage Total percent
- Midterms
- 1 30% 30%
- Quizzes
- 2 10% 20%
- Projects
- 0 0% 0%
- Term projects
- 0 0% 0%
- Laboratories
- 0 0% 0%
- Class participation
- 1 10% 10%
- Total term evaluation percent
- 60%
- Final exam percent
- 40%
- Total percent
- 100%
- Quantity Duration (hours) Total (hours)
- Course duration (including exam weeks)
- 16 4 64
- Off class study hours
- 14 3 42
- Duties
- 0 0 0
- Midterms
- 1 9 9
- Final exam
- 1 10 10
- Other
- 0 0 0
- Total workLoad
- 125
- Total workload / 25 (hours)
- 5.00
- ECTS
- 5.00