სსიპ-ივანე ჯავახიშვილის სახელობის თბილისის სახელმწიფო უნივერსიტეტი

Course Syllabus

Course Name Corporate Finance 1

Author (Authors) Davit Aslanishvili

Lecturer (Lecturers) Davit Aslanishvili

Cell: 599 569397, e-mail: d.aslanishvili@gmail.com

Course Code

1. TSU Faculty of Economics and Business

Course Status 2. Level: Bachelor’s Degree
3. Elective

Introduce students to corporate finance, in particular to the evaluation

Course Goals
Number of credits and
distribution of hours based
on students activities (ECTS)
of investments, the relation between risk and return, capital
budgeting, the relation between financing decisions and value of a
firm.
Putting students in the condition to understand the theory and apply,
in real world situations, the techniques that have been learned during
the course.
5 Credit - 125 hours:
Interactive work (lecture/seminar) – 45 hours; Student’s individual
work – 80 hours, among them:
*preparation for the midterm exam - 30 hours
*preparation for seminars – 15 hours
*consultations – 5 hours
*Preparation for the final exam – 30 hours.

Principles of Accounting, Mathematics for Economics

Course Pre-requisite
Course Results Knowledge and understanding:
The students can:

 Use best practices and tools for investment valuation and

capital budgeting
 Understand relation between risk and return and how
considerations about risk and cost of capital affect the process
of capital budgeting
 Understand relation between financing decisions, market

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სსიპ-ივანე ჯავახიშვილის სახელობის თბილისის სახელმწიფო უნივერსიტეტი

efficiency, taxation and payout policies.

Skill:
The students can:

 Calculate the impact of financing, investment and payout

decisions on the value of the firm;
 Value simple bonds
 Value a business by discounted cash flow
 Choose between alternative investments
 Measure and calculate portfolio risk
 Measure the cost of equity
 Analyze project risk
 Calculate the weighted-average cost of capital
 Calculate the after tax weighted average cost of capital
Course Outline We will start discussing how to calculate present values, how to value
bonds and how to make investment decisions. We will then discuss
the relation between risk and return and the linkages between risk,
cost of capital and capital budgeting.
The following methods used during the lecture:
Teaching/Learning Methods
Interactive Lecture and Seminars
The main way of communication with students will be through
weekly lectures and seminars.

Discussion
The course will make heavy use of class discussions based on material
covered in class and on individual and group assignments that have to
be prepared outside the classroom and presented during classes.

Case Study
During the semester students will be introduce to numerous case
studies (based on real life and modern examples).

Analysis
The course will help students develop and apply their analytical
abilities on continuous bases.

Synthesis
Students will practice how to synthesize information of various types
and from various nature to make an optimal decision.

Test
The course testing strategy is discussed below.

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სსიპ-ივანე ჯავახიშვილის სახელობის თბილისის სახელმწიფო უნივერსიტეტი

Consultation
Students will be given plenty of opportunity to consult with the
instructor and teaching assistants during regular and on-demand office
hours.

Verbal / oral presentation of the material

Students will periodically have to prepare oral presentations based on
pre-assigned topics and case studies.

Independent work
Students are expected to work hard on their own to utilize the big
volume of information that is going to be presented to them during
lectures and seminars. Constant practicing of the tools covered in class
is the best way to develop a solid understanding of material in this
course and skills for its practical use.

Student evaluation will be based on 100 point system. 100 points is

Evaluation Criteria the max score. In order to receive credits, student must score at least
51 points.
The student evaluation system consists of:
a) Five types of positive assessment:
(A) Excellent – 91 and over
(B) Very Good – 81-90
(C) Good – 71-80
(D) Satisfactory – 61-70
(E) Sufficient – 51-60
b) Two types of negative assessment:
(FX) Marginal Fail – 41-50
(F) Fail – 40 and less

Student allows to pass an additional (make-up exam) exam in the

same semester.
Components of evaluation:

Total score max score of 100

Including:

Intermediary score Max 60 points

Including:

Assignments Max 20 points

Midterm exam Max 40 points

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სსიპ-ივანე ჯავახიშვილის სახელობის თბილისის სახელმწიფო უნივერსიტეტი

Final exam Max 40 points

The Key literature [BMA] Brealey A.R., Myers S.C. and Allen, F. (2011) Principles of
Corporate Finance. Eleventh Edition. McGraw Hill/Irwing.

Ross S.A., Westerfield R.W. and Jaffe J. (2008) Corporate Finance.

Additional literature and EightEdition. McGraw Hill/Irwing.
other learning materials Additional papers to be assigned during the course, related to students’
interests.

Additional
information/Conditions

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Appendix

Course Outline

Topic (lecture/working group/ practical work, Laboratory work and Materials (including the
№ etc.) page numbers)

1 Goals and governance of the firm [BMA] pp. 1-20

2 Discounted cash flow valuation [BMA] pp. 21-44
3 How to value Bonds and stocks [BMA] pp. 45-101
4 Net present value and other investments criteria: making investments [BMA] pp. 101-155
decisions
5 Introduction to risk and return [BMA] pp. 156-184
6 Portfolio theory, the CAPM and alternative views of risk and returns [BMA] pp. 185-212
7 Risk, and the cost of capital [BMA] pp. 213-239
8 Best practices in Capital budgeting – part 1 [BMA] pp. 240-275
9 Best practices in Capital budgeting – part 2 [BMA] pp. 276-311
10 Efficient markets and behavioral finance [BMA] pp. 312-340
11 How corporations issue securities [BMA] pp. 341-390

12 Payout policy [BMA] pp. 391-417

13 Does debt matter? [BMA] pp. 418-439
14 How much should a corporation borrow? [BMA] pp. 440-470

15 Financing and valuation [BMA] pp. 471-501

16-18 Sessional period

Final Exam
Note: The midterm exam will be held in the week of 8th, 9th

The final exam will be held in the weeks of 16th-18th

The make-up exam will be held in the week of 19th