Nov 28, 2023
MB 510 - Financial Principles and Policy
This course applies financial principles to corporate-level decisions pertinent to the attainment of corporate policy and strategic objectives. Topics include current and capital asset management, financial statement analysis, risk & return, time value of money, managing corporate risk, and strategic investment and financing decisions. Pre-requisites: undergraduate business degree and/or a working understanding of the concepts in balance sheets, income statements, statement of cash flows and statement of retained earnings, and the successful completion of all MBA courses among the first three groups of the curriculum.
Prerequisites & Notes
MB505, MB560, MB641, MB643
Assignments: 10 Week Course
Interactivity: Discussion Board
Final Assessment: None
Course Learning Objectives
Upon completion of this course, you should be able to do the following:
- Understand the basic structures of corporate financial accounting statements, namely, the Balance Sheet, Statement of Earnings, and Statement of Cash Flows.
- Given any scenario regarding lump sums, annuities, or perpetuities, correctly determine Present Values and Future Values, as well as related issues.
- Given any scenario, use the discounted-cash-flow methods to evaluate lump sums versus annuities or perpetuities; lease versus buy, as well as go versus no-go investment decisions, using Net Present Value, Internal Rate of Return, Modified Internal Rate of Return, and Profitability Index analysis.
- Given any scenario, correctly determine the Cost of Debt; Cost of Preferred Stock; and Cost of Common Stock or Equity, as well as the Weighted Average Cost of Capital for use in the Investment decision.
- Evaluate financial assets and portfolios using modern portfolio theory and the Capital Assets Pricing Model (CAPM).
- Assess the advantages and disadvantages of debt and equity financing using modern capital-structure theory, and evaluate the optimal dividend policy to maximize the value of the firm.
- Understand the basics of Foreign Exchange Rate determination using the Purchasing Power Parity (PPP), Interest Rate Parity (IRP), and International Fischer Effect (IFE) theories.
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