Financial Management

Course Code
FIN 503
Hours
2.25 hours
Type
Core
Offered
  • Fall 18 (B)
  • Fall 19 (B)
Prerequisites
(ACC 502 and TO 502 or equivalent) and (No credit in FIN 513, 551, 552, 553, 603)

Financial Management --- The course is primarily devoted to the principles of financial valuation. We will first discuss the concept of present value in extensive detail, and then apply the principles of valuation to value (a) real projects (or what is commonly referred to as capital budgeting) and (b) financial securities (stocks and bonds) under certainty. Since financial decision-making virtually always involves risk & uncertainty, we will then introduce the concept of risk, and the relation between risk & return. We will integrate our knowledge of cash flows with our understanding of risk to modify capital budgeting techniques in the presence of risk & uncertainty. The course concludes with an introductory treatment of the effects of financing on capital budgeting decisions. Although the concepts of competitive capital markets and market efficiency will not be covered in a separate session, they will be woven in the fabric of the course.

Taught By
Uday Rajan
  • David B. Hermelin Professor of Business Administration
  • Chair and Professor of Finance and Real Estate
Uday Rajan's research focuses on informational frictions such as adverse selection and moral hazard and their effect on market transactions, with...
Matteo Crosignani
  • Assistant Professor of Finance
Matteo Crosignani's research lies at the intersection of financial intermediation and monetary policy. He studies the effect of unconventional...