Introduction to Financial Management

1 THE UNIVERSITY OF HONG KONGHKU SPACE Community CollegeAssociate Degree Programmes2016-17 Course DocumentCourse Title: Introduction to Financial ManagementCourse Code:CCBS4006 Aims and ObjectiveThis course introduces the fundamental principles and concepts in Financial Management , and how theycan be applied in the real-life decision-making process. Various topics in Finance will be covered in thiscourse, including Financial Management basics, time value of money, Financial assets, bonds and stocksvaluation, risk and return, capital budgeting and cost of Learning Outcomes of the CourseOn completion of the course, students should be able the roles and characteristics of Financial markets in the business financing; business decisions in a changing environment through the use of time value of moneyand cost of capital concepts; asset valuation such as bonds and stocks and evaluate investment projects; on the tradeoff of risk and return for different Financial assets.

2 The Capital Asset Pricing Model approach for Financial and investment analysis; personal and corporate finance decisions, and evaluate different theories that impacton ManagementlOverview of Financial statements of a companylOverview of Financial Management decisions in a companylOverview of agency Time Value of MoneylFuture Value (FV) & compoundinglPresent Value (PV) & discountinglInterestrate quotations: APR, periodic interest & EARlFV and PV of multiple cash flowslAnnuitieslPerpetuitieslLoan AssetslBonds, notes & billslStockslOverview of primary and secondary stock ValuationlBond valuationlPar bond, premium bond & discount bondlInterest rate risklCurrent yield & capital gains yieldlYield to Maturity (YTM)

3 ValuationlValuing stock with zero growthlValuing stock with constant growthlValuing stock with non-constant growthlDividend yield & capital gains and ReturnlRisk-free assets & risk aversionlCorrelation coefficient & risk diversificationlSystematic risk & unsystematic risklMarket return & market risk premiumlBeta coefficientlCAPM & SMLlPortfolio return & portfolio BudgetinglPayback rulelDiscounted Payback rulelNet Present Value (NPV)lInternal Rate of Return (IRR) Capital Investment DecisionslIncremental cash flowlCapital investment of CapitallCost of equity, debt and preferred stockslWeighted average cost of capitalAssessmentType of Assessment(Weighting)DescriptionContinuo us Assessment (50%)Test(10%)Assignmentand write-up(20%)Group Project and ClassParticipation(20%)Examination(50%)W rittenExaminationPre-requisite(s)NilRequ ired and Recommended , E.

4 F., Houston, J. F. (3E).Essentials of Financial Management . Cengage , S. A., Jordan, B. D., & Westerfield, R. W. (Asia Global Edition: 2E).Fundamentals ofcorporate finance. MA: McGraw- , S. & Brigham, E. F. (6E).Principles of Finance. Cengage , B. G. (2011).A random walk down Wall Street:The time-tested strategy for , J. R. (2008).The psychology of investing. Upper Saddle River, : Pearson