INSTITUTE OF APPLIED MATHEMATICS
Last Updated:
21/07/2017 - 12:25

IAM521 - Financial Management

Credit: 3(3-0); ECTS: 8.0
Instructor(s): Mehmet Uzunkaya
Prerequisites: Consent of Instructor(s)

Course Catalogue Description

Examination of special issues in finance incorporating advanced theory and practice with emphasis on investment and financing decisions of the firm. Special references to applications in Turkey. Outline of Topics: An Overview of Financial Management. Financial Statements, Cash Flow, and Taxes. Analysis of Financial Statements. The Financial Environment: Markets, Institutions, and Interest Rates. Risk and Return. Time Value of Money. Bonds and Their Valuation. Stocks and Their Valuation. The Cost of Capital. The Basics of Capital Budgeting. Cash Flow Estimation and Other Topics in Capital Budgeting. Capital Structure Decisions. Distribution to Shareholders: Dividends and Repurchases. Issuing Securities, Refunding, and Other Topics. Lease Financing. Current Asset Management. Mergers, LBOs, Divestitures, and Holding Companies.

Course Objectives

The objective of this course is to familiarize the students with the world of finance, viewed especially from a corporation’s angle. The technical objectives include teaching about a wide array of concepts ranging from the basics of risk, return, time value of money and valuation to the more advanced discussions of capital budgeting and capital structure. The conceptual objectives include creating awareness about the variety and complexity of the financial decisions that are faced by the manager of a corporation on a daily basis. Finally, the philosophical objectives include demonstrating how the "world of finance" can be fascinatingly interesting and surprisingly challenging in a rather enjoyable way!

Course Learning Outcomes

  • Understand how the various parts of a business and its environments interact with the financial decisions of the firm
  • Develop skills in financial statement analysis, pro-forma preparation and performance evaluation by using financial statements
  • Understand the fundamental risk/return tradeoff in finance
  • Acquire the state-of-the-art know-how related to asset pricing by learning the chronological evolution of asset pricing models
  • Understand the essentials of bond and stock valuation and learn how to apply the basic framework to valuation in general
  • Learn the project evaluation process; acquire the technical skills for assessing project alternatives financially; understand the practical difficulties in capital budgeting; identify, analyze, and propose reasonable solutions to these problems
  • Understand the strategic financial decisions of a firm by learning about the dividend policy and capital structure choices
  • Understand the multinational setting in which companies operate and assess the effect of such a setting on corporate financial policies

Tentative (Weekly) Outline

Examination of special issues in finance incorporating advanced theory and practice with emphasis on investment and financing decisions of the firm. Special references to applications in Turkey. Outline of Topics: An Overview of Financial Management. Financial Statements, Cash Flow, and Taxes. Analysis of Financial Statements. The Financial Environment: Markets, Institutions, and Interest Rates. Risk and Return. Time Value of Money. Bonds and Their Valuation. Stocks and Their Valuation. The Cost of Capital. The Basics of Capital Budgeting. Cash Flow Estimation and Other Topics in Capital Budgeting. Capital Structure Decisions. Distribution to Shareholders: Dividends and Repurchases. Issuing Securities, Refunding, and Other Topics. Lease Financing. Current Asset Management. Mergers, LBOs, Divestitures, and Holding Companies.

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