This course provides a thorough introduction to the fundamental principles of Financial Economics, structured around three core pillars: Time Value of Money, Financial Markets and Investments, and Corporate Finance.
The course begins with the foundation of modern finance - the Time Value of Money. Students develop the analytical tools required to evaluate cash flows, including annuities, perpetuities, interest rates, and the weighted average cost of capital (WACC). These concepts form the basis for all subsequent valuation and investment decisions.
The second part of the course focuses on Financial Markets and Investment Analysis. Students examine the structure of financial markets, their participants, and regulatory environment. The course covers bonds and stocks, including valuation techniques, yield measures, risk and return, portfolio construction, and an introduction to derivatives. Behavioural Finance is incorporated to contrast classical financial models with real-world investor behaviour. A guest lecture expands the discussion to alternative investments.
The third part of the course concentrates on Corporate Finance and Firm Valuation. Students apply discounted cash flow techniques to capital budgeting decisions using NPV, IRR, and Payback Period methods. The course emphasizes cash flow estimation, taxation effects, and free cash flow calculations. Theoretical foundations of capital structure are examined through Modigliani–Miller propositions, leading to an integrated understanding of firm value and financing decisions. A guest lecture provides practical insights into corporate finance applications.
The course combines lectures and problem-solving seminars. Lectures introduce theoretical frameworks, while seminars focus on quantitative applications and analytical reasoning. Two mid-term tests and a final exam assess both conceptual understanding and computational proficiency. Whether you plan to work in banking, corporate finance, consulting, entrepreneurship, or simply want to make smarter financial decisions in your own life, this course equips you with essential financial thinking skills.
- Teacher: Tarass Buka
- Teacher: Nataļja Točelovska