Corporate Finance and Portfolio Theory

General

• Code: 702
• Semester: 7th
• Study Level: Undergraduate
• Course type: Special Background
• Teaching and exams language: Greek
• Teaching Methods (Hours/Week): Lectures and Practice work (3)
• ECTS Units: 6
• Course homepage: https://elearning.cm.ihu.gr/course/view.php?id=25
• Instructors: Bogas Christos

Course Contents

1. Introduction to Investment and Risk.
2. Methods of Estimates and Forecasts.
3. Calculation of Expected Returns.
4. Risk Calculation.
5. Portfolio Theory.
6. Application of the Markowitz Model.
7. Theory of Dividend Policy.
8. The Dividend Discount Model.
9. Capital Structure.
10. Determination of the Cost of Capital.
11. Mergers and Acquisitions.
12. Equity Financing.
13. Derivative Financial Products.

Educational Goals

The course is an introduction to the concepts and applications of Business Valuation and Financing methods, making reference to all the tools that are available to businesses, both for the optimal choice of sources of capital use and for measuring the degree of risk, in a increasingly volatile economic and business environment. The course aims to introduce students to the basic concepts of valuation methods and in particular to those that have as a reference point the money and capital markets, their application in the valuation of both financial results through the mandatory disclosures of their transactions and in the measurement of returns in relation to the degree of risk they undertake. It also refers to introductory concepts related to business development strategies through acquisitions and mergers, finding sources of capital use such as issuing new shares as well as planning the distribution of the results in various ways, depending on the legal and tax regime. Thus, the student will have an overall understanding of the processes and methodologies followed by companies to find capital, the ways of developing in new markets and the valuation of their assets whether they are listed companies or not. In this sense, the course is the basis on which the real or fair value of a business is examined, as well as its ability to continue to offer shareholders the profits expected from them.

Finally, the aim of the course is the students’ understanding and ability of the basic principles of investment and business valuation and knowledge related to capital management, risk measurement and its diversification techniques.

Upon successful completion of the course, the student will be able to:

• He/she has understood the basic business and investment valuation methods such as CAPM, WACC, APT and DDM.
• He/she has knowledge of the tools and techniques of risk measurement and, at the same time, the ability to interpret the results, in order to propose the necessary and appropriate options to businesses.
• Distinguish the main roles of the proposed methods, basic and alternative, in a real environment or in a case study and to assess the role of the interested parties (investors, shareholders, owners) in dealing with positive or negative economic developments.
• Use the proposed valuation and risk measurement methodologies to identify key elements of the financial result as well as cases of overvalued or undervalued results, in particular when there are strong fluctuations in the financial environment or during periods of financial crises.
• Analyze and calculate the key diversity elements of the models, depending on the business sector.
• Develop the necessary knowledge acquisition skills, in matters of valuation and management of the financial results of companies for further studies at postgraduate level.

General Skills

• Independent work.
• Team work.
• Decision making.
• Production of free, creative and inductive thinking.

Teaching Methods

• In the classroom, face to face.

Use of ICT means

• Basic software (windows, word, power point, the web, etc.).
• Support of learning process through the electronic platform / e-class.

Teaching Organization

Students Evaluation

Written final exams (60%) that may include:

• Judgemental questions.
• Short answer questions.
• Application exercises.
• True/false and multiple choice questions.
• Composite theoratical questions.

In each question, corresponding evaluation points are specified.
Optional assignment (Essay writing and presentation) corresponds to 40% of the final grade.

Recommended Bibliography

1. Χρηματοοικονομική Αναφορά, Ανάλυση Xρηματοοικονομικών Καταστάσεων και Αποτίμηση, Wahlen J., Baginski S., Bradshaw M., Εκδόσεις Broken Hill, 2022, Κωδικός Εύδοξου: 102070235.
2. Brigham Eugene F.,Weston J. Fred, Βασικές αρχές της χρηματοοικονομικής διαχείρισης και πολιτική», Εκδ. Παπαζήση, 1986.

Related Research Journals

1. Journal of Finance.
2. ABACUS.