Business Strategy and Investments

Objective

The course provides an understanding of the general financial framework within which business organisations operate both from a theoretical and a practical perspective, in particular how they examine issues relating to the raising and the uses of finance by making of investment decisions. It provides students with a more detailed analysis of certain aspects of financial management and explains why certain issues are fandamental to financial decisions and how these issues may be incorporated into the decision-making process.
The course presets an extended treatment of financial planning and investment appraisal together with an analytical approach to the theory of corporate valuation and financing models. Also, it concentrates on shorter term budgetary strategies in the context of business organisations overall long term development programmes and covers methods and techniques for decision making in spesial problem areas. Computer based methods and case studies will be used to extend discussion in realistic situations.
In view of the above the general learning objectives are:

1. To provide the basic concepts and analytical tools for managing financial resources. These tools and concepts are necessary for understanding the financial decisions of business organisations and how to apply them in practice.
2. To help students to bridge theory and practice of investment decisions and financing.
3. To enable students to ask the right guestions and appreciate the developments of special topics in corporate finance.

Course Contents

• Week 1. Foundations
  • Introduction
  • The Financial Environment
  • Cash Flows and Accounting
• Week 2. A fundamental concept: The Time Value of Money
  • Future and Present Values
  • A Simple Financial Decision
• Week 3. Financial management of the firm
  • Financial decisions
  • Investment in fixed assets
  • Capital structure
  • CFO
• Week 4. Capital Budgeting
  • Investment Appraisal – Criteria
  • Comparisons between criteria
  • Capital Budgeting Cash Flows
• Week 5. Capital Budgeting
  • Introduction to Risk Analysis
  • Fixed Asset Appraisal and Risk
• Week 6. Tools of Financial Analysis I
  • Financial Statement Analysis
  • The Statement of Sources and Uses of Funds
  • The Cash Flow Statement
• Week 7. Tools of Financial Analysis II
  • Financial Planning
  • Business Plan (Case study)
• Week 8 Valuation of Bonds and Common Stock
  • Valuation of Bonds
  • Valuation of Stock
• Week 9. Risk and Return
  • Risk and Return : Stocks
  • Asset Pricing Models
  • Portofolio Theory and CAPM
• Week 10. The Cost of Capital and Capital Structure
  • WACC and the Reguired Rate of Return
  • EPS Analysis
  • Managing Capital Structure
  • Dividend Policy
• Week 11 Special Topics
  • Acquisitions and Mergers
  • Other Forms of Corporate Restructuring
  • International Corporate Finance