Foundations of Finance B, 7.5 Credits

Contents

This course is intended to introduce participants to the basic concepts, theories and methods used in financial management. The focus is on the acquisition and use of financial resources. Including methods for analyzing investment decisions and interest rates. The course also deals with how the company´s capital structure is affected by financial decisions. The course also aims to develop an understanding and knowledge of the concepts of risk and return associated with the investment decision.

Expected learning outcomes

After completing this course, the student should be able to:

• explain the basic principles of financial management
• explain and calculate the time value of money
• utilize tools to assess the impact of financial decisions and calculate the value of projected cash flows
• explain the concept of risk as well as measure systematic and unsystematic risk
• explain the principal-agent problem between the company´s management and owners
• apply capital budgeting techniques and undertake sensitivity analysis using spread sheets
• explain factors that affect the optimal capital structure of a business.

Required Knowledge

Univ: At least 22.5 passed ECTS from the course International Business Administration A (2FE012) or similar.

Note. This course is only offered to international students under formal agreements.

Form of instruction

The course is constructed of lectures, tutorials, workshops and a practical problem solving case.

Examination modes

Examination will be based upon one or more individual assignments, a group work and an individual written comprehensive exam. A passing grade is required on each part of the course.

All examination will be in English

Pass with distinction (Väl godkänd, Vg, 75% or more),
Pass (Godkänd, G, 50% or more)
Fail (Underkänd, U, less than 50%).

In order to pass the course, the student must complete all parts of the examination i.e. reach 50% of the points of each part. To receive the grade pass with distinction, the student must reach at least 75% of the total points on the course.

Students who fail to present a photo ID at the occasion of a written examination cannot have their results registered.

In case of failure on seminar participation or individual and group assignments, compensating assignments must be completed in accordance with instructions given on each occasion.

Students who do not pass the written examination will be offered a re-examination opportunity within a month. Beyond that, additional opportunities to complete the written examination normally arise every academic year one-week prior to the start of the autumn term.

When a student has failed an examination on two occasions, he or she has a right to have another grading teacher. A written request for an alternative examiner should be handed to the director of studies no later than two weeks before the next examination opportunity.

Rules and regulations concerning the production of academic texts and correct referencing will be applicable to all written assignments. (see instructions in the Thesis manual. Thesis writing in Business Administration.) Urkund records may be used for control.

Lectures are normally not obligatory. However attendance is expected because the lectures are designed to facilitate students towards achieving course specific learning objectives. In addition lectures often provide insightful explanations of, and can supplement and provide contrast to, the course litterateur and other relevant course materials.

Student who has passed an examination cannot redo the examination to get a higher grading.

Grades on the course are awarded when students have passed all examinations and compulsory course elements.

Academic credit transfer
Academic credit transfers are according to the University credit transfer regulations.

Other regulations

The course is included in the International Business Program at Umeå School of Business and Economics. The course is also offered to exchange students within formal exchange agreements.