| EUROPEAN UNION RELATIONS | |||||
| Bachelor | TR-NQF-HE: Level 6 | QF-EHEA: First Cycle | EQF-LLL: Level 6 | ||
| 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. |
| 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. |
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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. |
| 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. |
| 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. |
| 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. |
| 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 | |
| Activities | Number of Activities | Workload |
| Course Hours | 14 | 41 |
| Study Hours Out of Class | 15 | 28 |
| Final | 1 | 28 |
| Total Workload | 97 | |
| No Effect | 1 Lowest | 2 Low | 3 Average | 4 High | 5 Highest |
| Program Outcomes | Level of Contribution | |
| 1) | To be able to examine, interpret data and assess ideas with the scientific methods in the area of EU studies. | 2 |
| 2) | To be able to inform authorities and institutions in the area of EU studies, to be able to transfer ideas and proposals supported by quantitative and qualitative data about the problems. | 2 |
| 3) | To be introduced to and to get involved in other disciplines that EU studies are strongly related with (political science, international relations, law, economics, sociology, etc.) and to be able to conduct multi-disciplinary research and analysis on European politics. | 3 |
| 4) | To be able to evaluate current news on European Union and Turkey-EU relations and identify, analyze current issues relating to the EU’s politics and policies. | 2 |
| 5) | To be able to use English in written and oral communication in general and in the field of EU studies in particular. | 1 |
| 6) | To have ethical, social and scientific values throughout the processes of collecting, interpreting, disseminating and implementing data related to EU studies. | 1 |
| 7) | To be able to assess the historical development, functioning of the institutions and decision-making system and common policies of the European Union throughout its economic and political integration in a supranational framework. | 2 |
| 8) | To be able to evaluate the current legal, financial and institutional changes that the EU is going through. | 2 |
| 9) | To explain the dynamics of enlargement processes of the EU by identifying the main actors and institutions involved and compare previous enlargement processes and accession process of Turkey. | 2 |
| 10) | To be able to analyze the influence of the EU on political, social and economic system of Turkey. | 2 |
| 11) | To acquire insight in EU project culture and to build up project preparation skills in line with EU format and develop the ability to work in groups and cooperate with peers. | 2 |
| 12) | To be able to recognize theories and concepts used by the discipline of international relations and relate them to the historical development of the EU as a unique post-War political project. | 3 |