BUS220 Finance and Investment

This course provides a thorough introduction to central topics in finance. It begins with elementary financial mathematics and the net present value (NPV) method as a foundation for investment decisions.

Furthermore, the relationship between risk and return is explored, including basic portfolio theory and the capital asset pricing model (CAPM). The course also covers the pricing of various financial assets such as stocks, bonds, and options. Capital budgeting and project analysis are also central, where the calculation of capital costs is an important component.

Finally, the course addresses the company's financial structure, dividend policy, and relevant ethical issues in finance.

Upon completion of the course, the student will have the following learning outcomes, defined in terms of knowledge, skills, and general competence:

Knowledge

The student:

• has broad knowledge of central theories, models, and methods in finance, including the net present value method, portfolio theory, and the capital asset pricing model (CAPM).
• has knowledge of principles for pricing financial assets such as stocks, bonds, and derivatives, as well as methods for capital budgeting and project analysis.
• is familiar with the importance of cash flows, discount rates, cost of capital (including WACC), and various decision criteria for investments.
• has knowledge of financial structure, dividend policy, market efficiency, and key ethical issues in finance.
• can update their knowledge within the core areas of finance.

Skills

The student:

• can apply principles of financial mathematics and the net present value method to analyze and evaluate investment projects and financial assets.
• can apply portfolio theory and the capital asset pricing model to assess risk and return, as well as calculate beta values and the weighted average cost of capital (WACC).
• can budget cash flows for investment analysis and apply various decision criteria for investments.
• can reflect on a company's financing choices (debt vs. equity), dividend policy, and the pricing of derivatives such as options.
• can find, evaluate, and refer to relevant academic literature and apply this in the analysis of financial problems.

General competence

The student:

• has insight into the role of finance in value creation and economic decision-making, including relevant ethical issues.
• can plan and carry out financial analyses and investment appraisals, both independently and as part of a team.
• can communicate central subject matter, analyses, and conclusions within finance both in writing and orally.
• can exchange viewpoints and experiences with others with a background in the field and thereby contribute to the development of good practice.
• is familiar with new thinking and innovation processes related to financial instruments and markets.