Explore

Principles of Corporate Finance – A Tale of Value

Approx. 26 hours to complete

Save Course

Go to Course

Course Summary

This course provides an introduction to the principles of corporate finance, including financial analysis, investment decision making, and capital budgeting. It also covers topics such as risk and return, working capital management, and financial markets.

Key Learning Points

Learn the fundamental principles of corporate finance
Analyze financial statements to evaluate a company's financial health
Make investment decisions using tools such as NPV and IRR

Learning Outcomes

Understand the principles of corporate finance
Analyze financial statements to evaluate a company's financial health
Make investment decisions using tools such as NPV and IRR

Prerequisites or good to have knowledge before taking this course

Basic knowledge of accounting principles
Familiarity with financial statements

Course Difficulty Level

Intermediate

Course Format

Online
Self-paced

Similar Courses

Corporate Finance Essentials
Advanced Corporate Finance

Related Education Paths

Related Books

Description

The study of Corporate Finance seems to be a very generic part of business education. Still, it either falls in the trap of intimidating formulas or is superficially journalistic. Both extremes preclude the understanding of the core finance ideas, concepts, and models.

This Course is an attempt to avoid the above extremes. We discuss the core basis and mechanisms of modern corporate finance in a learner-friendly way. We will analyze the market’s most fundamental problems, realize the intrinsic interests and preferences of investors, reveal the true meaning of specific financial terms, and uncover important issues that are so often ignored in choosing and valuing investment projects. The learners will gain insight into the essence of corporate finance. They will be able to use the obtained knowledge and skills to successfully advance in their career at a financial institution, as well as in the area of financial management at non-financial businesses.

Outline

Why Finance Matters? Net Present Value. How to Calculate NPV
Introduction
1.1. Introduction – the idea of value
1.2. The game plan – a jumbo jet taking off
1.3. The valuation model – key assumptions
1.4. The opportunity cost of capital
1.5. Introducing PV and NPV
1.6. PV calculation shortcut (1) – perpetuities
1.7. PV calculation shortcut (2) – annuities
1.8. A fixed rate mortgage – an example of PV
1.9. The general NPV formula
Konstantin Kontor
AIBEc. The American Institute of Business and Economics
Grading
Handouts – an important comment
1.1. Introduction: why finance matters
1.2. How to calculate present value
1 (Practice)
1 - The power of PV calculations

Applications of NPV. Valuing Bonds and Stocks
2.1. Introduction – a simple way to value bonds and stocks
2.2. Valuing riskless debt
2.3. Bond cash flows and other parameters. Yield to maturity
2.4. Calculating spot rates
2.5. Forward rates – the idea and calculation
2.6. Valuing common stocks – the expected rate of return
2.7. The general stock valuation formula. The “tail”
2.8. The model of growth. PVGO
2.9. A constant growing company – an example
2.10. – What’s ahead?
2.1. Application of NPV (1) – valuing riskless bonds
2.2. Application of NPV (2) – valuing common stocks
2.3. Analyzing growth
2 (Practice)
2 - PV of bonds and stocks – models and market values

Making the Choice of Good Investment Projects. NPV and Other Criteria. Why Is NPV Better?
3.1. Why use NPV as a criterion of the choice of projects?
3.2. Other criteria – pluses and minuses
3.3. Internal rate of return (IRR)
3.4. Problems with IRR – it’s not exactly like NPV!
3.5. Using NPV – what should we know
3.6. NPV and cash flows. Some accounting details
3.7. Sunk costs – opportunity costs – relevant costs
3.8. Depreciation – an overview relevant to cash flows
3.9. Discount rates – nominal and real. The role of inflation
3.10. Projects of different length. Equivalent annual cost (EAC)
3.11. EAC – an example
3.12. Conclusions and unanswered questions
3.1. Equivalent annual cost (EAC)
3.2. Case – comparing two heating systems
3 (Practice)
3 - The problems of IRR and the power of EAC

Risk and Return – From Basics to Reality
4.1. Mathematics of risk
4.2. The expected return and the standard deviation for a portfolio of securities. Some empirical evidence
4.3. Diversification. “Special” portfolios
4.4. Contribution to the portfolio risk. β
4.5. Efficient portfolios. The market portfolio’s efficiency
4.6. Capital asset pricing model (CAPM). Examples
4.7. The company cost of capital (CCC) rule
4.8. Applying CAPM – a no debt case
4.9. Applying CAPM – the general case. WACC
4.10. Steps in applying CAPM – an example
4.11. Conclusions. The roadmap to determining WACC. Some objections to using normal distributions
4.1. Mathematics of risk – an overview
4.2. Risk and return (1) – the game plan and diversification
4.3. Risk and return (2) – market risk and asset pricing
4.4. Risk and return (3) – cost of capital
4 (Practice)
4 - Returns, betas, and the cost of capital

Options – Idea, Role, and Valuation
5.1. The opportunity to change decisions
5.2. Options – definition, charts, payoffs
5.3. Option valuation (1) – ideas and approaches
5.4. Option valuation (2) – Black–Scholes, binomial
5.5. Option application (1) – real investment projects
5.6. Decision trees and the option identification
5.7. Options on future investments
5.8. Option application (2) – valuing risky debt
5.9. Valuing bond options – an overview
5.1. Options – an introduction
5.2. Options – valuation approaches
5.3. Options in real investment projects
5.4. Valuing risky debt – an overview
5 (Practice)
5 - The many different faces of option valuation

What We Learned About Finance. Some Conclusions. Corporate Finance and Career Tracks
6.1. The NPV criterion revisited
6.2. Economic value added (EVA) and Market value added (MVA) as investment criteria
6.3. The project valuation road map
6.4. Options and their role in valuation
6.5. Major unanswered questions in corporate finance
6.6. How to profit from learning CF? Career track 1 – sales and trading
6.7. How to profit from learning CF? Career track 2 – analysis and research. How to profit from learning CF? Career track 3 – financial management at a non-financial corporation
6. EVA and MVA
Final Test

Summary of User Reviews

Find out what learners have to say about Principles of Corporate Finance course on Coursera. Read reviews and ratings without any numerical value. Discover the key aspect of the course that users thought was good.

Key Aspect Users Liked About This Course

Many users appreciated the course's practical applications of financial concepts.

Pros from User Reviews

The course covers a wide range of topics that are relevant to corporate finance.
The instructors are knowledgeable and engaging.
The course is well-structured and easy to follow.
The assignments and quizzes are challenging but manageable.
The course provides valuable insights into the financial decision-making process.

Cons from User Reviews

Some users found the course to be too basic and lacking in depth.
The course could benefit from more real-world case studies.
The course may not be suitable for those without a basic understanding of finance.
The discussion forums can be overwhelming and difficult to navigate.
Some users felt that the course could have been more interactive and engaging.

Recommended for you

Writing With Confidence: Writing Beginner To Writing Pro

Pro copywriter/Cambridge University writing teacher reveals the secrets for writing blogs and business docs that enthral “This is perhaps the best writing course I've ever taken....

Save Course

MBA -The Business fundamentals + 30 hrs of business concepts

+ 30 hrs , This MBA course is designed to enhance your Business knowledge & learn the foundation concepts of businesses...

Save Course

Invest Like a Pro!

Discover the most powerful scientifically proven single stock trading system in the world. With U. S. English captions. New York, New York (Time Magazine), Monday, May 25, 1959, 12:00:00 EDT...

Save Course