FNCE 2121 - Financial Management

Course Description

Students develop a basic understanding of business finance which deals with how organizations effectively manage their operating and fixed assets and fund them with an optimal mix of debt and equity financing. Topics include financial statement analysis; financial forecasting; working capital management and short-term borrowing; valuing financial assets; cost of capital; capital budgeting and risk; capital markets and sources of long-term financing; dividend policy; and foreign exchange.

Learning outcomes

• Explain the importance of share price maximization and the influence of agency costs.
• Solve business problems that incorporate the time value of money.
• Examine the performance of an organization using different financial statement analysis techniques.
• Demonstrate how risk is incorporated into the calculation of an asset’s required rate of return.
• Value the stocks and bonds issued by companies to finance their operations.
• Explain the shape of the yield curve, risk-free rate, and sources of risk premium.
• Appraise the financial viability of new projects using capital budgeting techniques.
• Calculate the appropriate cost of capital for a business in different situations.
• Analyze the optimal capital structure for a company based on an assessment of its operational leverage and other factors

Course topics

• Module 1: Introduction to Corporate Finance
• Module 2: Financial Statement Analysis
• Module 3: Time Value of Money
• Module 4: Bond Valuation and Interest Rates
• Module 5: Risk and Return
• Module 6: Cost of Capital
• Module 7: Stock Valuation
• Module 8: Capital Budgeting
• Module 9: Capital Structure

Required text and materials

Students are responsible for purchasing the required materials on their own:

• Ross, S. A., Westerfield, R. W., Jordan, B. D., Ari Pandes, J., & Holloway, T. (2022). Fundamentals of corporate finance (11th Cdn. ed.). McGraw-Hill Education.
  Type: Textbook. ISBN: 9781260881387 / 9781265033972

Note: This item can be purchased directly from the following link.

Additional requirements

Non-programmable financial calculator: Texas Instruments BA II Plus (strongly recommended) or equivalent.

Assessments

To successfully complete this course, students must achieve a passing grade of 50% or higher on the overall course, and 50% or higher on the final mandatory exam.

Recommended requisite(s)

• ACCT 1211 and ACCT 1221; or
• ACCT 2211
• CMNS 1290 or CMNS 1291
• MATH 1071
• STAT 1201

Exclusions

• BBUS 3120
• BBUS 3121
• FNCE 2120
• FNCE 3120