Introduction to Finance
description
Transcript of Introduction to Finance
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Introduction to Finance
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Goal
Equip students with the basic tools necessary for making efficient financial decisions while taking into account future cash flows and their risk.
MethodologyStudents will master the required theoretical tools and apply them to day-to-day decision of individuals (saving/retirement/mortgage…)
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outline
• Logistics• Course schedule
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Logistics
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Class Material
On our website http://www.bauer.uh.edu/nlangberg/teaching_635.htm
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Text book
I will teach and assign problems using the book Corporate Finance by Jonathan Berk and Peter DeMarzo, Perason
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Alternative Reading
Further/alternative reading is Brealey, Myers and Allen, Principals of Corporate Finance, McGraw-Hill Irwin, 8th edition or higher
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Buying the book?
I do recommend buying the book
• The course is built around the text book• Excellent reference book for those to plan to
work in the area of corporate finance• Taught in leading B schools around the world
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Group Assignments
• I encourage work in groups• Groups are limited to four students
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Grade
• Homework assignments: 30%• Data Case: 5%• Final exam: 65%
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Office hours
• appointment by email• welcome to stop by my office• Send specific questions by email
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Course Schedule
(tentative)
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Course schedule
August 28IntroductionTime value of money• Future value, present value, discounting
stream of cash flows• Annuities, perpetuities, growing annuities and
growing perpetuities
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Course schedule
September 4Time value of money continued
September 11Interest rates• APR, EAR, Amortizing loans• Nominal and Real interest rates• The Term Structure of Interest RatesPractice questions CH3,4 due
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Course schedule
September 18Investment Decision Rules• NPV, Payback period,
IRR, EVA• Multiple investment
opportunities• Resource constraints,
Profitability IndexPractice Questions CH5 due
September 25Pricing Risk• Risk and return• Expected return, Volatility• Calculating realized returns• Excess returns• Systematic and
Idiosyncratic risk• Diversification• CAPMPractice questions CH6 due
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Course schedule
October 2Review Homework assignments and solutions with Ming the teaching assistant
October 9Stock ValuationBond ValuationPractice questions CH10 and Data Case chapter 10 due
October 12Tentative Make up class 9:00-12:00
October 16Final 6:00-9:00
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Questions before we start?