The study of Corporate Finance seems to be a very generic part of business education. Still, it either falls in the trap of intimidating formulas or is superficially journalistic. Both extremes preclude the understanding of the core finance ideas, concepts, and models.
This Course is an attempt to avoid the above extremes. We discuss the core basis and mechanisms of modern corporate finance in a learner-friendly way. We will analyze the market’s most fundamental problems, realize the intrinsic interests and preferences of investors, reveal the true meaning of specific financial terms, and uncover important issues that are so often ignored in choosing and valuing investment projects.
The learners will gain insight into the essence of corporate finance. They will be able to use the obtained knowledge and skills to successfully advance in their career at a financial institution, as well as in the area of financial management at non-financial businesses.
本课程是 Understanding Modern Finance 专项课程 专项课程的一部分
Principles of Corporate Finance – A Tale of Value
提供方
Moscow Institute of Physics and Technology
American Institute of Business and Economics
教学大纲 - 您将从这门课程中学到什么
周
1Why Finance Matters? Net Present Value. How to Calculate NPV
In Week 1 we propose the game plan for our study of value. Then we analyze the key assumptions for the general valuation model. We focus on the understanding of the sources of value and the fundamental ideas of investor’s choice, the opportunity cost of capital, risk and return. We discuss the importance of time and expectations in determining value.
Then we discuss the present value approach to studying the projects’ value and choice. We present the general PV formula and introduce the key concept of net present value (NPV) as a criterion of the choice of good investment projects. Then we study some most widely used shortcuts and apply the formulas to find the NPV’s of certain projects that play a special role in valuation. We end up with the general NPV formula and discuss the challenges in using it.
10 个视频 （总计 79 分钟）, 6 个阅读材料, 2 个测验
10 个视频
Introduction3分钟
1.1. Introduction – the idea of value6分钟
1.2. The game plan – a jumbo jet taking off5分钟
1.3. The valuation model – key assumptions11分钟
1.4. The opportunity cost of capital6分钟
1.5. Introducing PV and NPV12分钟
1.6. PV calculation shortcut (1) – perpetuities9分钟
1.7. PV calculation shortcut (2) – annuities6分钟
1.8. A fixed rate mortgage – an example of PV11分钟
1.9. The general NPV formula4分钟
6 个阅读材料
Konstantin Kontor10分钟
AIBEc. The American Institute of Business and Economics10分钟
Grading10分钟
Handouts – an important comment10分钟
1.1. Introduction: why finance matters
1.2. How to calculate present value10分钟
2 个练习
1 (Practice)20分钟
1 - The power of PV calculations
周
2Applications of NPV. Valuing Bonds and Stocks
Week 2 of the Course is devoted to the applications of NPV. In the first part of the week we use NPV to study riskless debt. Of special attention will be the challenges in valuing even riskless bonds. We discuss bond parameters and the special role of yield to maturity. Then we demonstrate how the NPV approach helps determine spot and forward interest rates.
The second part of Week 2 deals with the core concepts in valuing equity. We introduce the idea of the common stock value as a function of its cash disbursements. Then we present some formulas that are used to value common stock on the basis of NPV. We focus on growth as a major contributor to the stock value. We analyze growth drivers and the mechanism of growth. On an example we reveal the influence of investments on the stock value. Finally, we pose some questions with respect to NPV approach.
10 个视频 （总计 68 分钟）, 3 个阅读材料, 2 个测验
10 个视频
2.2. Valuing riskless debt6分钟
2.3. Bond cash flows and other parameters. Yield to maturity10分钟
2.4. Calculating spot rates8分钟
2.5. Forward rates – the idea and calculation8分钟
2.6. Valuing common stocks – the expected rate of return5分钟
2.7. The general stock valuation formula. The “tail”7分钟
2.8. The model of growth. PVGO5分钟
2.9. A constant growing company – an example10分钟
2.10. – What’s ahead?2分钟
3 个阅读材料
2.1. Application of NPV (1) – valuing riskless bonds
2.2. Application of NPV (2) – valuing common stocks10分钟
2.3. Analyzing growth10分钟
2 个练习
2 (Practice)20分钟
2 - PV of bonds and stocks – models and market values
周
3Making the Choice of Good Investment Projects. NPV and Other Criteria. Why Is NPV Better?
We start Week 3 of the Course by the discussion of criteria of choosing investment projects. Beside NPV, the internal rate of return (IRR) and other approaches are introduced. We show why the NPV criterion is the best and why the application of others may lead to wrong investment decisions.
Then we focus on the main ideas to be taken into account while setting up cash flow patterns and making the choice of project on the basis of NPV. We mention some special issues – relevant costs, depreciation, inflation. We present the concept of equivalent annual cost (EAC) as a method of comparing projects of different length. Then we study the application of EAC in greater detail in a case.
12 个视频 （总计 106 分钟）, 2 个阅读材料, 2 个测验
12 个视频
3.2. Other criteria – pluses and minuses8分钟
3.3. Internal rate of return (IRR)8分钟
3.4. Problems with IRR – it’s not exactly like NPV!12分钟
3.5. Using NPV – what should we know3分钟
3.6. NPV and cash flows. Some accounting details11分钟
3.7. Sunk costs – opportunity costs – relevant costs10分钟
3.8. Depreciation – an overview relevant to cash flows5分钟
3.9. Discount rates – nominal and real. The role of inflation6分钟
3.10. Projects of different length. Equivalent annual cost (EAC)9分钟
3.11. EAC – an example11分钟
3.12. Conclusions and unanswered questions10分钟
2 个阅读材料
3.1. Equivalent annual cost (EAC)
3.2. Case – comparing two heating systems10分钟
2 个练习
3 (Practice)20分钟
3 - The problems of IRR and the power of EAC
周
4Risk and Return – From Basics to Reality
In Week 4 we study risk and return. We present a stochastic mathematical model of risk and apply it to find the returns and standard deviations of portfolios of assets. We discuss diversification and the role of special portfolios – the riskless portfolio and the market portfolio – in approaching asset risk. We demonstrate how any asset contributes to the market risk and introduce the β coefficient.
Then we derive the capital asset pricing model (CAPM) and study how it is used on examples. We discuss the application of the company cost of capital (CCC) rule to choosing investment projects. Then we use CAPM to determine the cost of capital – first, for an equity-financed company and then in the general case with debt and equity. We present the weighted average cost of capital (WACC) formula and discuss it. Finally, on an example we study the steps in applying CAPM.
11 个视频 （总计 100 分钟）, 4 个阅读材料, 2 个测验
11 个视频
4.2. The expected return and the standard deviation for a portfolio of securities. Some empirical evidence9分钟
4.3. Diversification. “Special” portfolios6分钟
4.4. Contribution to the portfolio risk. β6分钟
4.5. Efficient portfolios. The market portfolio’s efficiency7分钟
4.6. Capital asset pricing model (CAPM). Examples9分钟
4.7. The company cost of capital (CCC) rule10分钟
4.8. Applying CAPM – a no debt case4分钟
4.9. Applying CAPM – the general case. WACC13分钟
4.10. Steps in applying CAPM – an example15分钟
4.11. Conclusions. The roadmap to determining WACC. Some objections to using normal distributions7分钟
4 个阅读材料
4.1. Mathematics of risk – an overview
4.2. Risk and return (1) – the game plan and diversification10分钟
4.3. Risk and return (2) – market risk and asset pricing10分钟
4.4. Risk and return (3) – cost of capital10分钟
2 个练习
4 (Practice)20分钟
4 - Returns, betas, and the cost of capital
讲师
Konstantin Kontor
Director and Professor of Finance and StrategyAmerican Institute of Business and Economics (AIBEc)
关于 Moscow Institute of Physics and Technology
Московский физико-технический институт (неофициально известный как МФТИ или Физтех) является одним из самых престижных в мире учебных и научно-исследовательских институтов. Он готовит высококвалифицированных специалистов в области теоретической и прикладной физики, прикладной математики, информатики, биотехнологии и смежных дисциплин. Физтех был основан в 1951 году Нобелевской премии лауреатами Петром Капицей, Николаем Семеновым, Львом Ландау и Сергеем Христиановичем. Основой образования в МФТИ является уникальная «система Физтеха»: кропотливое воспитание и отбор самых талантливых абитуриентов, фундаментальное образование высшего класса и раннее вовлечение студентов в реальную научно-исследовательскую работу. Среди выпускников МФТИ есть Нобелевские лауреаты, основатели всемирно известных компаний, известные космонавты, изобретатели, инженеры.
关于 American Institute of Business and Economics
The American Institute of Business and Economics (AIBEc) offers a wide variety of business courses in finance, accounting, marketing, strategy, HR, business law, economics, general management, business psychology, as well as course projects and the Field study. AIBEc provides for flexibility and customization of programs and schedules.
关于 Understanding Modern Finance 专项课程
This Specialization is designed for a wide audience of those interested in finance either professionally or just of curiosity, including managers of different levels specializing in finance, accounting, business planning, strategy, consulting, and project management, IT specialists engaged in the area of finance, fin-tech, big data, and valuation, etc.
Through four courses and the final Project, you will cover the theory and practice of capital markets and financial institutions, corporate finance and project valuation, financial and managerial accounting as applied to finance, as well as the M&A market as the ultimate judge of financial efficiency and value creation.
The Specialization will prepare you to understand and use the applications of financial ideas, concepts, models, strategies, and tools to build a successful career in finance and in business, as well as to take advantage of opportunities offered by financial markets.
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