Lahore University of Management Sciences
ACF 261: Principles of Finance
0300 401 3446
0321 443 0296
Monday & Wednesday
A familiarity with basic Financial Accounting, Quantitative Methods and Statistics.
This is an introductory course in Finance and the first in a series of required Finance core courses for the B.Sc. Accounting & Finance degree. This course together with the next course, Corporate Finance, completes an introduction to Financial Management using the modern theory of finance. The final required course in the sequence, Intermediate Finance, introduces advanced topics and explores certain topics in depth.
Firms invest in real assets such as plant and equipment (the Investment decision) and raise money via personal funds, stocks, bonds or bank loans (the Financing decision). Broadly speaking, Financial Management is about how these Investment and Financing decisions should be made. This course explores the first part of Financial Management and introduces the framework, tools and techniques for making Investment decisions. Specifically, we will cover Valuation, Capital Budgeting, Modern Portfolio Theory and Equilibrium Risk-Return Relationship.
|Quizzes (3) |15% | |Midterm |30% | |Final |30% | |Class Participation & Attendance |10% | |Project |15% |
Quiz 1: session 5
Quiz 2: session 9
Quiz 3: session 16
Project: The project is about applying Stock Valuation and Risk/Return techniques learnt in the course to companies listed on Karachi Stock Exchange. Details of the project will be given in session 2.
The required reading for the course constitutes relevant chapters from the book and occasional lecture handouts. These Handouts will be posted on the course web site a day before each lecture.
Book: “Fundamentals of Financial Management” (2004) International 4th edition by Brealey, Myers, Markus (BMM).
Outline of the Course on
Principles of Finance
|Date |Session |Topics |Readings | |Month |No |Body of Knowledge |Book & Handouts | |/Day | | | | |Sep |1 |An Introduction To Finance | | |3,4 | |The firm and the financial manager |BMM | | | | |Ch 1&2 | |5,6 |2 |An Overview Financial Environments. | | | | |(Capital Markets & Corporate Finance.); |BMM | | | |An Introduction to Financial Markets, Financial Institutions and Financial |Ch 2 | | | |Instruments. Consumption Savings & Investment, | | |10,11 |3 |Basic Financial Statements; | | | | |Balance Sheet; Income Statements & Cash Flow Statements; An analysis of...
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