Foundations of Corporate Finance

This unit introduces foundational corporate finance concepts including financial statements, capital markets and instruments, valuation, risk and portfolio basics, and capital budgeting. Students will develop quantitative skills to interpret financial information, value securities and projects, and assess financing options to prepare for advanced corporate finance analysis in subsequent units.

Learning Objectives

• Analyze core financial statements (balance sheet, income statement, statement of cash flows) to compute and interpret liquidity, solvency, and profitability ratios.
• Apply valuation techniques—including time value of money, discounted cash flow, bond pricing, and stock valuation—to calculate present values and prices for securities and capital projects.
• Demonstrate understanding of risk and return and portfolio fundamentals by estimating expected returns, measuring risk, and computing the weighted average cost of capital (WACC).
• Evaluate financing and capital-allocation decisions by comparing debt and equity options, assessing bond and securitization characteristics, and recommending projects using NPV, IRR, and payback analyses.