MATHEMATICS
Bachelor	TR-NQF-HE: Level 6	QF-EHEA: First Cycle	EQF-LLL: Level 6

Course Introduction and Application Information

Course Code	Course Name	Semester	Theoretical	Practical	Credit	ECTS
IB2221	Corporate Finance	Fall	3	0	3	7

This catalog is for information purposes. Course status is determined by the relevant department at the beginning of semester.

Basic information

Language of instruction:	English
Type of course:	Non-Departmental Elective
Course Level:	Bachelor’s Degree (First Cycle)
Mode of Delivery:	Face to face
Course Coordinator :	Prof. Dr. NİYAZİ BERK
Course Lecturer(s):	Dr. Öğr. Üyesi HAKKI ÖZTÜRK
Recommended Optional Program Components:	None
Course Objectives:	This is the first course of two consecutive corporate finance courses in the second year which aims to provide the student with the basic tools for making financial decisions. This course will introduce the student to basic financial theory and concepts of corporate finance. This course will also ensure an understanding of relationship between financial theory and its practices. It will cover some of the theory and practice of decision-making within the corporation More of the emphasis will be on financial valuation, capital budgeting and cash flow analysis.

Learning Outcomes

The students who have succeeded in this course;
I.To be able to understand what corporate finance is and how financial managers decide.

II.To be able to analyze the financial statements of a firm.
III.To be able to identify market cap, financial leverage and operating leverage.
IV.To be able to figure out the essentials of short term financial policy.
V.To be able to understand the logic behind the pricing of securities.
VI.To be able to understand weighted average cost of capital
VII.To be able to evaluate investment projects with capital budgeting methods.

Course Content

1st Week: Introduction to Corporate Finance, What is Corporate Finance, The Goal of Financial Management, Financial Management Decisions, Capital Budgeting, Capital Structure, Working Capital Management.

2nd Week: Overview of Financial Statements: The Balance Sheet: Assets, Liabilities and Owners’ Equity, Net Working Capital, Debt versus Equity, Income Statement.

3rd Week: Some Primary Concepts: Market Value, Book Value, Nominal Value, Asset Value, Net Asset Value. Financial Leverage, Operating Leverage.

4th Week: Short Term Financial Management and Working Capital Management: Short Term Financial Planning, Some Aspects of Short-Term Financial Policy.

5th Week: Short Term Borrowing, Cash Management, Credit and Receivables, Inventory Mangement: The Economic Order Quantity Model

6th Week: Time Value of Money, Present Value, Future Value, Annuity, Perpetuity. Concepts of Risk, Return and Discount Factor

7th Week: Introduction to Valuation: Bonds and Bills. Differences Between Bonds and Bills. Pricing of Bonds and Bills

8th Week: The Relationship Between Bond Prices and Interest Rates Duration, Modified Duration and Bond Price Volatility, Trading Strategies.

9th Week: Valuation of Common Stocks: Basic Characteristics of Stocks, Capitalization Rate, The Basic Issues About Common Stock Valuation, Dividend Based Stock Valuation Models (DDM)

10th Week: Cost Of Capital: Cost of Debt, Cost of Equity, Weighted Average Cost of Capital (WACC)

11th Week: Capital Budgeting: Project Appraisal Essentials, Free Cash Flow Concept, Earnings Before Interest and Tax (EBIT), Corporate Tax, Non-Cash Net Working Capital, Depreciation, Amortization, Capital Expenditures (Capex)

12th Week: The Process of Evaluating Capital Budgeting Projects: Payback Rule, Accounting Rate of Return (ARR), Discounted Payback, Net Present Value (NPV), Internal Rate of Return (IRR), Profitability Index, Conflicts Between NPV and IRR and How to Resolve These Conflicts.

13th Week: The Process of Evaluating Capital Budgeting Projects: Payback Rule, Accounting Rate of Return (ARR),Discounted Payback, Net Present Value (NPV), Internal Rate of Return (IRR), Profitability Index, Conflicts Between NPV and IRR and How to Resolve These Conflicts.

14th Week: Cash-Flow Analysis: Preparing a Cash-Flow Chart, Project Feasibility Analysis with DCF, Sensitivity Analysis, Break-Even Analysis.

Weekly Detailed Course Contents

Week	Subject	Related Preparation
1)	1st Week: Introduction to Corporate Finance, What is Corporate Finance, The Goal of Financial Management, Financial Management Decisions, Capital Budgeting, Capital Structure, Working Capital Management.
2)	2nd Week: Overview of Financial Statements: The Balance Sheet: Assets, Liabilities and Owners’ Equity, Net Working Capital, Debt versus Equity, Income Statement.
3)	3rd Week: Some Primary Concepts: Market Value, Book Value, Nominal Value, Asset Value, Net Asset Value. Financial Leverage, Operating Leverage.
4)	4th Week: Short Term Financial Management and Working Capital Management: Short Term Financial Planning, Some Aspects of Short-Term Financial Policy.
5)	5th Week: Short Term Borrowing, Cash Management, Credit and Receivables, Inventory Mangement: The Economic Order Quantity Model
6)	6th Week: Time Value of Money, Present Value, Future Value, Annuity, Perpetuity. Concepts of Risk, Return and Discount Factor
7)	7th Week: Introduction to Valuation: Bonds and Bills. Differences Between Bonds and Bills. Pricing of Bonds and Bills
8)	8th Week: The Relationship Between Bond Prices and Interest Rates Duration, Modified Duration and Bond Price Volatility, Trading Strategies.
9)	9th Week: Valuation of Common Stocks: Basic Characteristics of Stocks, Capitalization Rate, The Basic Issues About Common Stock Valuation, Dividend Based Stock Valuation Models (DDM)
10)	10th Week: Cost Of Capital: Cost of Debt, Cost of Equity, Weighted Average Cost of Capital (WACC)
11)	11th Week: Capital Budgeting: Project Appraisal Essentials, Free Cash Flow Concept, Earnings Before Interest and Tax (EBIT), Corporate Tax, Non-Cash Net Working Capital, Depreciation, Amortization, Capital Expenditures (Capex)
12)	12th Week: The Process of Evaluating Capital Budgeting Projects: Payback Rule, Accounting Rate of Return (ARR), Discounted Payback, Net Present Value (NPV), Internal Rate of Return (IRR), Profitability Index, Conflicts Between NPV and IRR and How to Resolve These Conflicts.
13)	13th Week: The Process of Evaluating Capital Budgeting Projects: Payback Rule, Accounting Rate of Return (ARR),Discounted Payback, Net Present Value (NPV), Internal Rate of Return (IRR), Profitability Index, Conflicts Between NPV and IRR and How to Resolve These Conflicts.

Sources

Course Notes / Textbooks:	Essentials of Corporate Finance by Ross, Westerfield and Jordan, 6th Edition.
References:	Principles of Corporate Finance by Brealey and Myres, 7th Edition. Berk,N. Finansal Yönetim, 10. baskı, İstanbul.

Evaluation System

Semester Requirements	Number of Activities	Level of Contribution
Midterms	1	% 40
Final	1	% 50
Total		% 90
PERCENTAGE OF SEMESTER WORK		% 40
PERCENTAGE OF FINAL WORK		% 50
Total		% 90

ECTS / Workload Table

Activities	Number of Activities	Workload
Course Hours	14	41
Study Hours Out of Class	15	28
Final	1	28
Total Workload		97

Contribution of Learning Outcomes to Programme Outcomes

No Effect	1 Lowest	2 Low	3 Average	4 High	5 Highest

	Program Outcomes	Level of Contribution
1)	To have a grasp of basic mathematics, applied mathematics and theories and applications in Mathematics
2)	To be able to understand and assess mathematical proofs and construct appropriate proofs of their own and also define and analyze problems and to find solutions based on scientific methods,
3)	To be able to apply mathematics in real life with interdisciplinary approach and to discover their potentials,
4)	To be able to acquire necessary information and to make modeling in any field that mathematics is used and to improve herself/himself,	4
5)	To be able to tell theoretical and technical information easily to both experts in detail and non-experts in basic and comprehensible way,
6)	To be familiar with computer programs used in the fields of mathematics and to be able to use at least one of them effectively at the European Computer Driving Licence Advanced Level,
7)	To be able to behave in accordance with social, scientific and ethical values in each step of the projects involved and to be able to introduce and apply projects in terms of civic engagement,
8)	To be able to evaluate all processes effectively and to have enough awareness about quality management by being conscious and having intellectual background in the universal sense,	4
9)	By having a way of abstract thinking, to be able to connect concrete events and to transfer solutions, to be able to design experiments, collect data, and analyze results by scientific methods and to interfere,
10)	To be able to continue lifelong learning by renewing the knowledge, the abilities and the competencies which have been developed during the program, and being conscious about lifelong learning,
11)	To be able to adapt and transfer the knowledge gained in the areas of mathematics ; such as algebra, analysis, number theory, mathematical logic, geometry and topology to the level of secondary school,
12)	To be able to conduct a research either as an individual or as a team member, and to be effective in each related step of the project, to take role in the decision process, to plan and manage the project by using time effectively.