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Required: cannot be combined with EC3VF, EC1PCF and Corporate Finance, given at LUISS (EU-LUISS/ECBFIN).
Topics:
- Financial statements, time value of money
- Corporate governance, DCF (discounted cashflow) and loans
- Bonds and equity
- Capital budgeting
- Market efficiency, risk, CAPM model and SML
- Cost of capital and capital structure
- Risk management and options
- Behavioural Finance
Academic skills
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) for more complex assignments.
• Being able to identify, interpret and critically evaluate the main line of reasoning, for more complex problems.
• Being able to evaluate evidence in text and presentations for more complex problems.
Format
There will be plenary lectures and plenary review sessions.
The main focus of the lectures is on knowledge transfer and creating an understanding for the subject.
The review sessions, assignments and typical exam questions will be worked out together so that you are well prepared for the upcoming weekly quiz and the final exam. The main focus of the review sessions is to get you to work, to work through exercises together, and to have more time for your questions.
Assessment method
The final course grade will be the weighted average of your best three weekly quiz grades (together 15% weight) and a final exam (85% weight). There will be six weekly quizzes. The best three grades of your weekly quizzes will count for 5% of your course grade (together 15%). The weekly quizzes will consist of calculus.
Quizzes
The weekly quizzes will be online assignments on 'Connect'. This 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 quizzes 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 whole course.
To minimize cheating all questions in the weekly exercises will be unique. Each student will get a random draw out of a pool of questions about the same topic and all calculus questions will be algorithmic. Moreover the time frame in which the weekly quiz can be answered will be limited to reduce the opportunities for cooperation.
There is no opportunity to retake individual weekly quizzes or all weekly quizzes altogether. As only the best four quizzes are taken into account for the course grade you can miss some weekly quizzes without endangering your course grade. If you cannot take a weekly quiz or two, for example because of sickness, then there are still enough other weekly quizzes left to get a good grade. You can miss up to three weekly quizzes, provided you do the other four.
Make sure that you hand in four weekly quizzes as early as possible. It is your responsibility if you get sick late in the course and you speculated on handing in only the last three weekly assignments. There will be no retake opportunity for the weekly quizzes! If you cannot attend an exam, e.g., because you are sick, then you need to contact the exam commission.
Final exam
The final exam is a closed-book exam which consists of multiple choice questions and open calculus questions. The final exam will cover all topics of the course, including the topics of the weekly quizzes. This is not an online exam and you are not allowed to bring any books or notes to the final exam. Only non-programmable calculators are allowed. A sheet with the most important formulas will also be provided (and posted in advance of the exam on BB). The exam will consist of multiple choice and open questions.
Effort requirements
There will be no effort requirement for this course.
Course materials
Please purchase the following course textbook before the first lecture:
Brealey, R., S. Myers, F. Allen, Principles of Corporate Finance 12th edition. McGraw Hill. ISBN: 9780077189990.
Make sure to buy the International edition of the textbook and not the American one (check the ISBN number to be sure). And make sure to buy the book at ECU´92 so that the Connect-code is included.
In case online access is required for this course and you are not in the position to buy the access code, you are advised to contact the course coordinator for an alternative solution. Please note that access codes are not re-usable meaning that codes from second hand books do not work, as well as access codes from books with a different ISBN number. Separate or spare codes are usually not available.
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