Syllabus: Foundations of Finance
Instructor: Marc PIKINGTON
Institution: IAE Dijon - School of Management, Université de Bourgogne
Programs: International Master in Business Studies (IMBS - M1)
Language of Instruction: English
Contact: [Link]@[Link]
Office Hours: [By appointment]
1. Course Description & Overview
This course provides a foundational understanding of the core principles of corporate finance. It
is designed for students from diverse academic backgrounds with little or no prior experience in
finance. The aim is to demystify financial concepts and equip you with the analytical tools and
framework necessary to understand how businesses make critical financial decisions.
We will explore the role of finance within a corporation, learn how to interpret financial
statements, apply the time value of money, evaluate investment opportunities, understand risk,
and explore how companies are financed. The course blends theoretical concepts with practical,
real-world applications and case studies.
2. Learning Objectives
Upon successful completion of this course, you will be able to:
Understand the goal of the firm and the role of the financial manager.
Interpret key financial statements and use ratios to assess a company's performance.
Apply the concepts of the Time Value of Money (TVM) to value investments.
Evaluate investment projects using capital budgeting techniques (NPV, IRR, Payback).
Understand the trade-offs between debt and equity financing.
Calculate a company's cost of capital and understand its use.
Identify different types of financial risk and the basics of risk management.
3. Target Audience
This course is designed for two distinct groups:
L2 International Track students: High-potential undergraduates building a strong
business foundation.
IMBS (M1) students: Graduate students seeking to solidify their core financial
knowledge before specializing.
4. Prerequisites
A basic understanding of accounting (e.g., what a balance sheet and an income statement are)
and mathematics (algebra) is recommended. However, key concepts will be reviewed to ensure
all students can follow.
5. Teaching Methodology
The course is highly interactive and practical. Each session will include:
Interactive Lectures: Presenting key concepts with clear, relatable examples (e.g.,
startups, local businesses).
Practical Exercises & Case Studies: Applying theory to solve numerical problems and
real-world scenarios.
Class Discussions: Encouraging questions and debate to deepen understanding.
Use of Tools: Guidance on using calculators and Excel for financial calculations.
6. Assessment & Grading
Your final grade will be based on the following components:
Final Exam (60%): A comprehensive exam designed to test your understanding of key
concepts and your ability to solve problems. It will include multiple-choice questions,
short exercises, and a case study.
Group Case Study & Presentation (40%): A practical assignment where you will work in
a small group to analyze a company's financial situation or a potential investment
project. This promotes teamwork and applied learning.
7. Detailed Session Plan (20 hours)
Part 1: The Foundations (6 hours)
Session 1: Introduction to Corporate Finance (2h)
o What is a corporation and what does it need?
o The role of the Financial Manager and the three key decisions: Investment,
Financing, Liquidity.
o The fundamental goal: Shareholder Wealth Maximization.
o Stakeholders vs. Shareholders.
o Agency Theory: Aligning the interests of managers and owners.
Session 2: Financial Statement Analysis (2h)
o A review of the three core statements: Balance Sheet, Income Statement, Cash
Flow Statement.
o Why cash flow is different from profit.
o Calculating and interpreting key financial ratios: Liquidity, Profitability, Leverage
(Solvency).
o Workshop: Analyzing a well-known company's financial health.
Session 3: The Time Value of Money (TVM) (2h)
o Fundamental concept: A dollar today is worth more than a dollar tomorrow.
o Calculating Future Value (FV) and Present Value (PV).
o Valuing streams of cash flows: Annuities and Perpetuities.
o Application: Saving for the future and taking out a loan.
Part 2: Valuing Investments and Projects (8 hours)
Session 4: Capital Budgeting I - The Tools (2h)
o Introduction to evaluating investment projects.
o Net Present Value (NPV): The gold standard.
o Internal Rate of Return (IRR) and the Payback Period.
o Comparing the methods: Strengths and weaknesses.
Session 5: Capital Budgeting II - Application (2h)
o How to estimate project cash flows.
o Comprehensive case study: Should the company launch a new product?
o In-class exercise: Full investment appraisal from start to finish.
Session 6: Risk and Return (2h)
o Defining risk and measuring historical returns.
o Diversification: How it reduces risk.
o The difference between unique (firm-specific) risk and market risk.
Session 7: The Cost of Capital (2h)
o Cost of Debt vs. Cost of Equity: How do we calculate them?
o Introduction to the Weighted Average Cost of Capital (WACC).
o Why WACC is so important: Using it as a hurdle rate for investments.
Part 3: Financing and the Big Picture (6 hours)
Session 8: Financing a Company (2h)
o Debt vs. Equity: Characteristics, advantages, and disadvantages.
o Introduction to Capital Structure: Does how you finance a firm matter?
o Modigliani & Miller's proposition (without taxes).
Session 9: Introduction to Financial Markets & Instruments (2h)
o Overview of bonds (debt) and stocks (equity).
o The role of financial markets (primary vs. secondary).
o The function of financial institutions (banks, investment funds).
Session 10: Course Integration & Review (2h)
o Comprehensive case study integrating all concepts: investment decision,
financing, and risk.
o Final review session: Q&A and exam preparation.
8. Required Readings & Materials
Main Reference (Optional): Berk, J., & DeMarzo, P. (2019). Corporate Finance (5th
Global ed.). Pearson. Relevant chapters will be suggested per session.
Essential: A financial calculator (e.g., HP 10bII+, TI BA II Plus) or proficiency with Excel.
All lecture slides, exercise sheets, case studies, and additional resources will be provided
electronically before the course begins.
Instructor's Note: My goal is to make finance accessible and engaging for everyone. Please ask
questions, participate in discussions, and don't hesitate to reach out if you need help. Let's have
a productive and insightful semester
