ECONOMICS | |||||
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. |
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) | As a world citizen, she is aware of global economic, political, social and ecological developments and trends. | 2 |
2) | He/she is equipped to closely follow the technological progress required by global and local dynamics and to continue learning. | 2 |
3) | Absorbs basic economic principles and analysis methods and uses them to evaluate daily events. | 2 |
4) | Uses quantitative and statistical tools to identify economic problems, analyze them, and share their findings with relevant stakeholders. | 2 |
5) | Understands the decision-making stages of economic units under existing constraints and incentives, examines the interactions and possible future effects of these decisions. | 1 |
6) | Comprehends new ways of doing business using digital technologies. and new market structures. | 2 |
7) | Takes critical approach to economic and social problems and develops analytical solutions. | 1 |
8) | Has the necessary mathematical equipment to produce analytical solutions and use quantitative research methods. | 2 |
9) | In the works he/she contributes, observes individual and social welfare together and with an ethical perspective. | 2 |
10) | Deals with economic problems with an interdisciplinary approach and seeks solutions by making use of different disciplines. | 1 |
11) | Generates original and innovative ideas in the works she/he contributes as part of a team. | 2 |