FINANCE

4 credit hours

The aim of this course is to discuss the methods and techniques of modern finance for financial decision-making.  Financial decisions typically involve the allocation of scarce resources in investments generating risky cash-flows over a potentially long period of time. We focus on the value creation process and economic value drivers, with the aim of providing executives with a clear framework for corporate value maximization. We start with the basic tools of discounting and compounding cash flows in the context of capital budgeting. We then discuss how to assess financial needs, profitability, and the value https://onlinemba.unc.edu/academics/mba-curriculum/strategic-economics/ implications of the investment decision of firms. This leads us to identify and forecast cash-flows for individual projects or entire firms. Corporate decisions typically involve uncertain future cash-flows, requiring firms (and investors) to assess a risk-return trade-off for their investments. Proper measurement of relevant risk and corresponding required returns is at the core of assessing the cost of capital for specific projects and for entire firms as well. By the end the course, we will have developed a tool flexible enough to be used for valuation in the context of capital budgeting, but also for general corporate valuations, such as complex M&A transactions. The course is then concluded with an overview of the drivers of corporate financial strategy, and the principles and tools for corporate risk management (such as options and future markets). 

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