FINANCIAL MANAGEMENT

This course introduces the basic principles used in financial management and their
applications in the long-term investment and financing. These principles are characterized in
time value of money and relation between risk and return. Once the students acquire the
basic knowledge on these principles, they will learn how to apply their knowledge to the
valuation of stocks and bonds, financial planning, capital budgeting, long-term financing,
capital structure, and dividend policy and risk management.
* Upon completing this course the students ought to be able to make basic decisions
regarding which project to take, and if so, when; how to finance a project; how much of
payouts, in what form, to make; how much debt to carry; and how to hedge away potential
risks associated with basic operations of a firm. This course also lays foundation for more
advanced investment and corporate finance topics to be taught in the higher-level finance
courses.

Field Trip / Invited Speaker
Depending on the schedule and students’ interest, the instructor may be able to arrange a 2-
3 hour field trip for the students to get the “feel” of the financial market/industry. Students
have an opportunity of hearing from financial experts about how financial markets functions,
how to invest and employment opportunities as well. Alternatively, we can arrange to invite a
financial expert to speak in class.

Week 1
Day 1 HISS Orientation
Day 2
I. Overview of Corporate Finance
Ch. 1: Introduction to Financial Management
Day 3
II. Valuation of Future Cash Flows
Ch. 4: Introduction to Valuation: Time Value of Money
Day 4 Ch. 5: Discounted Cash Flows

Week 2
Day 1 Ch. 6: Application: Interest Rates and Bond Valuation
Day 2 Ch. 7: Application: Stock Valuation
Day 3
III. Capital Budgeting
Ch. 8: Capital Budgeting: Decision Criteria
Day 4 Ch. 9: Capital Investment Decisions

Week 3
Day 1 Mid-Term Exam
Day 2
IV. Risk and Return in Capital Market
Ch. 10: Some Lessons from Capital Market History
Day 3 Ch. 11: Return, Risk, and the Security Market Line
Day 4
V. Cost of Capital and Financial Policy
Ch. 12: Raising Capital and Cost of Capital

Week 4
Day 1 Ch. 13: Capital Structure and Financial Leverage
Day 2
VI. Financial Statements
Ch. 2: Financial Statements and Cash Flows
Ch. 3: Financial Statement Analysis
Day 3 Special session, Game, and Comprehensive review
Day 4 Final Exam

• Develop critical thinking skills of financial concepts
• Familiarize with the types of the decisions that typically confront financial managers
• Understand the risk–return relationship and time value of money in corporate investing
and financing decisions and in financial investments
• Ensure that students are competent in the utilizing knowledge of analytical techniques
commonly employed in the financial decision-making process

* No prerequisite required.
* Textbook: Essentials of Corporate Finance, 9th ed. by Jordan, Westerfield and Ross, 2017,
McGraw Hill-Irwin.
* Lecture notes (chapter outlines), practice questions, solutions for problems, and other
materials related to the course are provided by the instructor. Additional materials are to be
provided as needed.