MB 510 - Financial Principles and Policy

• Assignments: Varied throughout the term
• Interactivity: Discussion Boards
• Final Assessment: Final Project

• 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.

 

Credits: 3