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Cursus: EC2PCF
EC2PCF
Principles of Corporate Finance
Cursus informatieRooster
CursuscodeEC2PCF
Studiepunten (ECTS)7,5
Categorie / Niveau2 (2 (Bachelor Verdiepend))
CursustypeCursorisch onderwijs
VoertaalEngels
Aangeboden doorFaculteit Recht, Economie, Bestuur en Organisatie; Undergraduateschool REBO; Bachelor Economie en bedrijfseconomie;
ContactpersoonA.M. Osté
E-maila.m.oste@uu.nl
Docenten
Contactpersoon van de cursus
A.M. Osté
Overige cursussen docent
Blok
2  (14-11-2022 t/m 05-02-2023)
Aanvangsblok
2
TimeslotA: A (MA-ochtend, DI-namiddag, WO-ochtend)
Onderwijsvorm
Voltijd
OpmerkingOther economic elective.Cannot be taken by EandBE students. Cannot be combined with ECB2FIN or ECB1IFA.
Cursusinschrijving geopendvanaf 30-05-2022 t/m 24-06-2022
AanmeldingsprocedureOsiris
Inschrijven via OSIRISJa
Inschrijven voor bijvakkersJa
VoorinschrijvingNee
Na-inschrijvingJa
Na-inschrijving geopendvanaf 24-10-2022 t/m 25-10-2022
WachtlijstNee
Cursusdoelen
This course focuses on the following academic skills:

Analytical Skills
 
  • Being able to solve problems (identifying the problem, devising a path towards the solution, follow this path, verify the outcome)
  • Being able to identify, interpret and critically evaluate the main line of reasoning
  • Being able to evaluate evidence in text and presentations 

Topics:
Compound and discount streams of cash flows.
Calculate the net present value (NPV) of an asset. 
Value financial assets: stocks, bonds and options.
Describe the functioning of financial markets. 
Interpret the relation between risk and return.
Calculate a project’s cash flows and the cost of capital. 
Select investment projects and the relevant funding 
Determine the optimal capital structure in relation to the amount of debt.
Analyze a firm's performance based on its financial statements.
Understand several strategies a firm can use to manage risk. 
Understand the concept of payout-policy for the company.
Inhoud
This course offers a framework to systematically analyse the financial problems of corporations and individuals. It introduces you to the financial issues faced by corporations, like investing in real assets and acquiring the funds to pay for these investments. In addition, it gives you a broad introduction to how financial markets work and how financial assets like bonds and equity are valued by investors. Using financial theory, you will learn to analyze and solve the basic problems of corporate finance.Corporate finance studies two broad questions of the corporation:
First: In which assets should the corporation invest (capital budgeting decision)?
From a wide array of possible investment projects, a corporation needs to select projects that increase shareholders wealth. Naturally, the available projects differ in timing and size of the expected cash flows. You will learn how to compare and select investment projects.
Second: How is the corporation going to pay for these assets (financing decision)?  
A firm can use internally available funds, or it can issue new equity or debt capital.
The overall mix of capital is often referred to as the firm’s capital structure, which is a crucial firm characteristic.
The capital used by the firm is provided by investors: you will learn how investors determine the value of equity and bonds, and how to tackle the relationship between risk and returns.

Format
There will be lectures and tutorials. The main focus of the lectures is on knowledge transfer and creating an understanding for the subject. In the tutorials, assignments and typical exam questions will be worked out together to prepare the student for the weekly quizzes and the final exam. On top of this, the student is also expected to work extensively on the virtual learning platform Connect that accompanies the textbook.

Course conflicts within the same timeslot are the student’s own responsibility: the days and times of meetings and exams for this course cannot be modified.

Assessment method:
The final course grade will be the weighted average of your weekly quiz grades (combined weight 15%) and a final exam (85% weight). There will be seven weekly quizzes.

Quizzes
The weekly quizzes will be open book online assignments on 'Connect'. 'Connect' is an online learning and testing environment of the publisher of the textbook, McGraw-Hill. To access Connect you need the unique login code from your textbook. It is your responsibility to have access to the online environment on which the weekly quiz will be offered and that you have a reliable and working internet connection for the weekly quiz. You do not need to pass the weekly quizzes in order to pass the course.
The composition of your Connect grade looks as follows:

0 Connect quizzes above 50%:                  Connect grade = 1
1 Connect quiz above 50%:                        Connect grade = 3
2 Connect quizzes above 50%:                  Connect grade = 5
3 Connect quizzes above 50%:                  Connect grade = 7
4 or more Connect quizzes above 50%:    Connect grade = 9

You have 3 attempts per quiz and the highest score will be taken into consideration.

Furthermore, you can earn one additional point for your Connect grade by participating 5 out of 7 times in the tutorials. (see Effort requirements.)


Final exam
The final exam is a closed-book exam which consists of of multiple-choice questions (30 to 50) and/or in addition a relevant number of open-end questions. The final exam will cover all topics of the course, including the topics of the weekly quizzes. For this exam you are not allowed to bring any books or notes. Only non-programmable calculators are allowed. (see the students website for permitted models). A sheet with the most important formulas will be provided (and posted in advance of the exam on Blackboard).

Effort requirements
The effort requirement for this course is attendance and active participation in the tutorials. To be eligible for the retake you need to attend at least 5 out of 7 tutorials for which you’re demonstrably prepared and in that case you will receive 1 additional Connect grade point. At the beginning of the tutorial you need to register with your student number, and your name at the start of the tutorial.
You either receive 0 or 1 Connect grade point in addition, by participating 5 out of 7 times at least, in the tutorials


Repeaters
Repeaters will have the same curriculum as a regular student, this includes the weekly Connect quizzes.

Note that we only teach from the indicated textbook, we don't take any responsibility in translating the course material to previously used textbooks.


Extra Notes:
1) You will have to attend at least 1 connect quiz in order to get an end-grade! Otherwise, you will end up with respect to your grade with an ND (= no participation).

2) The maximum number of Connect grade points that can be realized is 9 + 1 = 10, representing 15% of your final grade.

3) At the retake exam for EC2PCF the results of quizzes and/or effort requirement are NO LONGER applicable. The retake exam is in that case the final and only grade taken into consideration.

4) To be eligible for the retake, you need to attend at least 5 out of 7 tutorials for which you are demonstrably prepared.


Prerequisites
Students are expected to have knowledge of: level 1 Mathematics (equivalent to ECB1WIS), level 1 Statistics (equivalent to ECB1STAT) and Microsoft Excel.
 
Competenties
-
Ingangseisen
-
Voorkennis
Note that especially for students without an economics background this is an intensive and challenging course. To the extent students lack knowledge of Financial Accounting, Mathematics and Excel, students are expected to compensate for this on their own. 
Verplicht materiaal
Boek
-
Titel:Fundamentals of Corporate Finance
Auteur:Brealey, Myers, Marcus
Uitgever:McGraw Hill
Druk:11
Werkvormen
Hoorcollege

Tutorial

Toetsen
Retake
Weging1
Minimum cijfer1

Final exam
Weging85
Minimum cijfer1

Weekly quizzes
Weging15
Minimum cijfer1

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