Essentials of finance

Course goals
At the end of this course, students should:

- Be able to interpret a company's financial statements, at least in broad terms;

- Understand where the company's value comes from;

- Understand the principles for determining the value of shares and other financial assets;

- Understand the concept of informational efficiency;

- Understand the debate between the proponents of the Efficient Market Hypothesis and the Behavioral Finance school.

Teaching approach
All topics covered in the course will be presented on PowerPoint slides together with short exercises and real-world examples. Class participation is highly encouraged.

Topics

a) The interplay between shareholders, managers, stakeholders and the aims of the firm.

b) The financial statements of the firm: the income statement and the balance sheet.

c) Net Present Value.

d) Stocks and bonds.

e) Informational efficiency.

f) The Efficient Market Hypothesis and Behavioral Finance.

Textbook
Corporate Finance: European Edition, Hillier, Ross, Westerfield, Jaffe, Jordan. ISBN: 9780077121150

Chapters One; Two; Three (but only sections 3.1 to 3.5); Four (but skip examples 4.22 to 4.27); Five (but skip section 5.7); Thirteen.

Grade
the grade will be based on the final exam (open book, open notes).