Principles of Corporate Finance
The course discusses the basic principles of corporate finance (the opportunity cost of capital, the net present value (NPV) concept, risk and return tradeoff, portfolios and diversification), as well as the theoretical basis for financial decision making and project valuation. It also includes comparisons of the U.S. and the Russian financial systems.

Konstantin Kontor
Konstantin Kontor is Director and professor of finance and strategy at AIBEc.
In 2000 – 2009 Mr. Kontor also served as visiting professor of financial strategy at the Stockholm School of Economics in Riga, where he taught courses in finance, strategy, and M&A for BA and EMBA students.

Goals of this Course
The main goal of this course is to provide the students with a basic understanding of the principles of finance (the opportunity cost of capital, the net present value concept, risk and return trade-off, portfolios and diversification,) as well as to discuss theoretical basis for processes and practices of financial analysis. It also includes comparisons of U.S. and Russian financial systems.

Another goal of the course is to expose the students to the Western standards and terminology used by capital markets and financial institutions worldwide.

The final goal is to expose the students to real processes of financial decision-making and financial analysis. The course is heavily based on problem solving. It also covers certain issues from the Western financial history in the form of case studies.

Course Materials
    Selected chapters from the textbook:

    • Richard A. Brealey and Stewart C. Myers. Principles of Corporate Finance, (hereinafter referred to as B&M.)
    • Notes, handouts, and cases.

      Grading
      Grading will be based on assignments, examinations and class participation.

      Because the course is heavily discussion-based attendance is mandatory. Failure to attend 40% of classes leads to immediate failure in the course and loss of credit.

      During the course the students will have to submit 5 homeworks, one case write-up, and take the midterm and the final examinations. Failure to take the exams or to hand in the case report is tantamount to failure in the course.

      The course will be graded in accordance with the following schedule:

      Homeworks ___________________ 20%
      Case _________________________ 10%
      Midterm ______________________ 30%
      Final _________________________ 40%
      Total ________________________100%

      Course Topics
      1. Introduction: Why finance matters. Net present value. How to calculate NPV
      2. Applications of NPV (I): Measuring bond yields and valuing bonds
      3. Applications of NPV (II): Valuing common stocks
      4. Making investment decisions with the NPV rule
      5. Risk, return and the opportunity cost of capital
      6. Market risk and asset pricing. Capital asset pricing model (CAPM)
      7. Capital budgeting
      8. Introduction to options
      9. Review session

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