FNCE 2121: Financial Management
Students develop a basic understanding of business finance which deals with how organizations effectively manage their operating and fixed assets and fund them with an optimal mix of debt and equity financing. Topics include financial statement analysis; financial forecasting; working capital management and short-term borrowing; valuing financial assets; cost of capital; capital budgeting and risk; capital markets and sources of long-term financing; dividend policy; and foreign exchange.
Learning outcomes
- Explain the importance of share price maximization and the influence of agency costs.
- Solve business problems that incorporate the time value of money.
- Examine the performance of an organization using different financial statement analysis techniques.
- Demonstrate how risk is incorporated into the calculation of an asset’s required rate of return.
- Value the stocks and bonds issued by companies to finance their operations.
- Explain the shape of the yield curve, risk-free rate, and sources of risk premium.
- Appraise the financial viability of new projects using capital budgeting techniques.
- Calculate the appropriate cost of capital for a business in different situations.
- Analyze the optimal capital structure for a company based on an assessment of its operational leverage and other factors
Course topics
- Module 1: Introduction to Corporate Finance
- Module 2: Financial Statement Analysis
- Module 3: Time Value of Money
- Module 4: Bond Valuation and Interest Rates
- Module 5: Risk and Return
- Module 6: Cost of Capital
- Module 7: Stock Valuation
- Module 8: Capital Budgeting
- Module 9: Capital Structure
Required text and materials
Students will receive the following:
- Ross, S. A., Westerfield, R. W., Jordan, B. D., Ari Pandes, J., & Holloway, T., (2022).
Fundamentals of corporate finance (11th Cdn. ed.). McGraw-Hill Education.
Type: Textbook: ISBN: 9781260881387
Additional requirements
Non-programmable financial calculator: Texas Instruments BA II Plus (strongly recommended) or equivalent.
Assessments
Please be aware that should your course have a final exam, you are responsible for the fee to the online proctoring service, ProctorU, or to the in-person approved Testing Centre. Please contact exams@tru.ca with any questions about this.
To successfully complete this course, students must achieve a passing grade of 50% or higher on the overall course, and 50% or higher on the final mandatory exam.
| Assignment 1: Financial Statement Analysis | 10% |
| Assignment 2: Time Value of Money | 10% |
| Assignment 3: Cost of Capital | 10% |
| Assignment 4: Stock Valuation | 10% |
| Assignment 5: Capital Budgeting and Capital Structure | 10% |
| Final Exam (mandatory) | 50% |
| TOTAL | 100% |
* Mandatory
Open Learning Faculty Member Information
An Open Learning Faculty Member is available to assist students. Students will receive the necessary contact information at the start of the course.
