FIN 300

About FIN 300

This course provides an introduction to the basic principles, concepts, and analytical tools in finance. Includes an examination of the sources and uses of funds, budgeting, present value concepts and their role in the investment financing and dividend decision of the corporate enterprise. Prereq: ECO 201, ECO 202, ACC 201, ACC 202, MA 123, STA 291 or equivalent.

Textbook: Fundamentals of Corporate Finance by Ross, Westerfield, and Jordan. 11th ed.



Office Hours: Mondays and Thursdays from 11:30am to 1:00pm in the Gatton Building, Room 345K. If you are unavailable at those times, please email joseph.farizo@uky.edu to schedule an appointment.



Syllabus


Introduction to Corporate Finance Chapter 1

The basic types of financial management decisions, the role of the financial manager, the goal of financial management, forms of business organization, the agency problem.



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Financial Statements, Taxes, and Cash Flow Chapter 2

The balance sheet, the income statement, corporate taxes, operating cash flow, and cash flow from assets.



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Working with Financial Statements Chapter 3

Standardized statements, profitability, DuPont analysis, financial ratios.



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Introduction to Valuation: The Time Value of Money Chapter 5

Future Value and compounding, Present Value and discounting, and applications.



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Discounted Cash Flow Valuation Chapter 6

The PV of multiple cash flows, annuities and perpetuities, APR, and EAR.



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Interest Rates and Bond Valuation Chapter 7

Valuing corporate bonds, bond defintitions and features, bond markets, and the term structure of interest rates.



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Stock Valuation Chapter 8

Common and preferred stock, valuation using dividends, the stock market.



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NPV and Investment Criteria Chapter 9

NPV, IRR, Payback Rule, and the Capital Budgeting Decision.



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Making Capital Investment Decisions Chapter 10

Relevant cash flows, sunk costs, opportunity costs, pro forma statements, operating cash flows.



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Some Lessons from Capital Market History Chapter 12

Historical returns, varaibility of returns, averages, capital market efficiency.



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Return, Risk, and the Security Market Line Chapter 13

Expected return, portfolios, beta, diversification, the security market line.



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The Cost of Capital Chapter 14

Cost of equity, cost of debt, WACC.



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