Fundamentals of Finance – by University of Pennsylvania

Categories: Finance
Wishlist Share
Share Course
Page Link
Share On Social Media

About Course

About this Course

In this course, you’ll learn the basic fundamentals of corporate finance. Based on the pre-term qualifying courses for Wharton MBA students, Professor Jessica Wachter has designed this course for learners who need a refresher in financial concepts, or for those who are learning about corporate finance for the first time. You’ll identify foundational concepts in corporate finance, such as NPV, Compound and Simple Interest, and Annuities versus Perpetuities. You’ll also learn how to apply the NPV framework to calculating fixed-income valuation and Equity, using hypothetical examples of corporate projects. By the end of this course, you’ll have honed your skills in calculating risk and returns to optimize investments, and be able to assess the right set of financial information to achieve better returns for your firm.

Show More

Course Content

Module 1 : Introduction and Net Present Value (NPV)
This module was designed to give you foundational knowledge of corporate finance and the Net Present Value (NPV). You’ll identify the definition of both Present Value and NPV, why it works, and how to calculate the NPV. You’ll learn key concepts such as Separation Theorem, whether corporations should follow the same rules of NPV as individuals, and what are reasonable assumptions to make when calculating NPV. You’ll compare Compound versus Simple Interest, define important concepts such as Annuities and Perpetuities, and analyze Annual Percentage Rate (APR) and Effective Annual Interest Rate (EAR). By the end of this module, you’ll gain a better understanding of the fundamental concepts in corporate finance as well as broader knowledge regarding the factors that go into a firm’s most critical decision-making.Learning Objectives Identify the definition of both Present Value and NPV Examine the Separation Theorem, and what are reasonable assumptions to make when calculating NPV Compare Compound versus Simple Interest, Annuities and Perpetuities, and Annual Percentage Rate (APR) and Effective Annual Interest Rate (EAR)

  • Course Introduction
    00:00
  • Present Value Concepts
    00:00
  • NPV Rule
    00:00
  • Summary of NPV Rule
  • Separation Theorem
    00:00
  • Topic 1 Lecture Slides
  • Topic 1 Lecture Notes
  • Simple vs. Compound Interest
    00:00
  • Annuities and Perpetuities
    00:00
  • Growing Delayed Annuities and Perpetuities
    00:00
  • Compounding Within the Year and the Effective Annual Interest Rate
    00:00
  • Summary of Computing Effective Annual Rates
  • Topic 2 Lecture Slides
  • Topic 2 Lecture Notes

Module 2 – Fixed Income Valuation
In this module, you’ll examine fixed income valuation and delve deeper into the yield curve. Using the basic definition of bonds, you’ll be able to identify zero coupon bonds and calculate the return on those bonds. You’ll also discuss the differences between Yield to Maturity and Holding Period Returns, evaluate your investments, and be able to answer the question: “What does return on investment mean?” Through analyzing the Yield Curve, you’ll assess the opportunity cost of receiving money at various events in the future and accurately value investments. By the end of this module, you’ll be able to describe what a bond and zero coupon bond is, calculate the return on those bonds, and calculate a Yield Curve to better assess the value of your investments.Learning Objectives Identify zero coupon bonds and calculate the return on those bonds Discuss the differences between Yield to Maturity and Holding Period Returns Analyze the Yield Curve, and assess the opportunity cost of receiving money at various events in the future and accurately value investments

Module 3 – Equity Valuation
In this module, you’ll examine how to determine the value of stocks using present value methods. You’ll define what Equity is and develop an understanding of the important difference between fixed-income securities, such as bonds, and equity cash flows. You’ll discover the standard approach in valuing equity through its cash flow and how the principle of using multiples (such as price-earnings ratio) to value equity all comes from valuing equity as a stream of cash flows. By the end of this module, you’ll gain a better understanding of the theoretical basis behind applications of equity valuation and create models that determine dividend growth.Learning Objectives Define what Equity is and the difference between fixed income securities and equity cash flows Examine the standard approach in valuing equity through its cash flow Analyze how the principle of using multiples (such as price-earnings ratio) to value equity all comes from valuing equity as a stream of cash flows

Module 4 – NPV vs. Internal Rate of Return
This module was designed to show you the difference between NPV and Internal Rate of Return (IRR). You’ll first explore both Internal Rate of Return and how it compares to the NPV, then debunk some of the common assumptions about IRR that may seem unrealistic when examined closely. Using hypothetical examples of projects, you’ll compare the values of NPV and IRR and what to do when they agree or disagree with each other. By the end of this module, you’ll gain a better understanding of the difference between NPV and IRR, plus be able to determine when to make the critical call on which value to accept or reject when making important decisions within your firm.Learning Objectives Compare NPV and Internal Rate of Return (IRR) Evaluate some of the common assumptions about IRR that may seem unrealistic when examined closely Determine when to make the critical call on which value to accept or reject when making important decisions within your firm

Additional Course Topics and Resources
This module contains additional course topics related to the fundamentals of finance

Student Ratings & Reviews

No Review Yet
No Review Yet

Subscribe Newsletter

Want to receive push notifications for all major on-site activities?

✕