In this course, the instructor will explain the basics of finance theory (modern portfolio theory) and discuss the basic theory of managerial finance (corporate finance) with a focus on the relationship between corporate management and the capital market.
First, the instructor will explain the basics of modern finance theory, such as corporate investment decision-making, capital cost, and CAPM (capital asset pricing model). Further, the instructor will introduce the discovery of behavioral finance, which emerged as a challenge to modern finance theory, to help students understand the realities of the capital market. Then, students will study topics which could be considered the central topics for managerial finance—corporate capital structure, investment policy, and corporate governance. This course is planned for greater emphasis on corporate investment decisions than on security investments.
By the end of this course, students will be able to:
1. Understand the basics of portfolio theory and managerial finance and be prepared to work on issues applying financial theories.
2. Understand the mechanism of a capital market and corporate management, the core of a capitalist society, and have knowledge for optimal management and market structuring.
|✔ Applicable||How instructors' work experience benefits the course|
|Instructor of this course has experience as a practitioner in financial market and coporate advisory businesses for total 15 years. He will incorporate the experience in all classes by adding practitioner's perspectives.|
Capital Budget, Cost of Capital, Modern Portfolio Theory, Behavioral Finance, Capital Structure, M&A, Corporate Governance
|✔ Specialist skills||Intercultural skills||Communication skills||✔ Critical thinking skills||✔ Practical and/or problem-solving skills|
This course consists of lectures and case studies.
The lectures will follow a textbook. Case studies will require working in groups and active participation in the class. Students must do the following:
1. Read the textbook chapter listed for each class before the lecture.
2. Submit class assignments.
|Course schedule||Required learning|
|Class 1||Introduction: Corporate management and capital market||Read and understand significant points of Chapter 1|
|Class 2||Value of time and Capital Budgeting 1||Read and understand significant points of Chapters 2 & 3|
|Class 3||Capital Budgeting 2||Read and understand significant points of Chapters 3|
|Class 4||Capital asset pricing model 1||Read and understand significant points of Chapter 4|
|Class 5||Capital asset pricing model 2||Read and understand significant points of Chapter 5|
|Class 6||Capital asset pricing model 3||Read and understand significant points of Chapter 6|
|Class 7||Equity pricing||Read and understand significant points of Chapters 7 & 8|
|Class 8||Fixed income bonds||Read and understand significant points of Chapter 9|
|Class 9||Capital structure||Read and understand significant points of Chapter 10 & 11|
|Class 10||Corporate Governance||Read and understand significant points of Chapters 15|
|Class 11||Corporate Governance||Read and understand significant points of Chapters 15|
|Class 12||Finance theory and practice: Discussion with a Leader of Finance Practitioner||Prepare for class disucssion on the assigned firm by group|
|Class 13||Market Efficiency and Investment||Read and understand significant points of Chapters 12|
|Class 14||Behavioral finance||Read and understand significant points of Chapters 13|
To enhance effective learning, students are encouraged to spend approximately 100 minutes preparing for class and another 100 minutes reviewing class content afterwards (including assignments) for each class.
They should do so by referring to textbooks and other course material.
Finance, Basic+ Series, Chuou-Keizai-Sya, Kotaro Inoue, Hiroshi Takahashi, Naosi Ikeda
Lecture Note will be uploaded on OCW-i
Reference Book: Corporate Finance: Second Edition, 2011, Jonathan Berks and Peter DeMarzo, Peason Education
Term test 70%
Additional Points: Class participation and assignments 30%
In cases that we cannot implement the term test due to COVID19, we might change it to the term paper.
Class Participants are required to have completed the course of Basic Accounting or have equivalent knowledge of accounting.