FNCE 2121: Financial Management

Students develop a basic understanding of business finance which deals with how organizations effectively manage their operating and fixed assets and fund them with an optimal mix of debt and equity financing. Topics include financial statement analysis; financial forecasting; working capital management and short-term borrowing; valuing financial assets; cost of capital; capital budgeting and risk; capital markets and sources of long-term financing; dividend policy; and foreign exchange.

Objectives

  • Explain the importance of share price maximization and the influence of agency costs.
  • Solve business problems that incorporate the time value of money.
  • Examine the performance of an organization using different financial statement analysis techniques.
  • Demonstrate how risk is incorporated into the calculation of an asset’s required rate of return.
  • Value the stocks and bonds issued by companies to finance their operations.
  • Explain the shape of the yield curve, risk-free rate, and sources of risk premium.
  • Appraise the financial viability of new projects using capital budgeting techniques.
  • Calculate the appropriate cost of capital for a business in different situations.
  • Analyze the optimal capital structure for a company based on an assessment of its operational leverage and other factors

Course outline

  1. Introduction to Corporate Finance
  2. Financial Statement Analysis
  3. Time Value of Money
  4. Bond Valuation and Interest Rates
  5. Risk and Return
  6. Cost of Capital
  7. Stock Valuation
  8. Capital Budgeting
  9. Capital Structure

Required text and materials

Students will receive the following:

Ross, S. A., Westerfield, R. W., Jordan, B. D., & Roberts, G. S., Air Pandes, J., Holloway, T., (2019). Fundamentals of corporate finance with Connect (10th Cdn. ed.). Whitby, ON: McGraw-Hill Ryerson.
Type: Textbook: ISBN: 9781260305869

Additional requirements

Non-programmable financial calculator: Texas Instruments BA II Plus (strongly recommended) or equivalent.

Assessments

To successfully complete this course, students must achieve a passing grade of 50% or higher on the overall course, and 50% or higher on the final mandatory exam.

Assignment 1: Financial Statement Analysis 10%
Assignment 2: Time Value of Money 10%
Assignment 3: Cost of Capital 10%
Assignment 4: Stock Valuation 10%
Assignment 5: Capital Budgeting 10%
Final Exam (mandatory) 50%
TOTAL 100%

* Mandatory

Open Learning Faculty Member

An Open Learning Faculty member is available to assist students. Primary communication is through the Learning Environment’s “Mail” tool. Students will receive the necessary contact information when starting the course.

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