Introduction to Finance
Welcome
Nisan Langberg
nlangberg@uh.edu
Office 210E
Teaching Assistant
Ming Chen
mingchen2011@gmail.com
Goal
Equip students with the basic tools necessary for
making efficient financial decisions while taking
into account future cash flows and their risk.
Methodology
Students will master the required theoretical
tools and apply them to day-to-day decision of
individuals (saving/retirement/mortgage…)
outline
• Logistics
• Course schedule
Logistics
Class Material
On our website
http://www.bauer.uh.edu/nlangberg/teaching_635.htm
Text book
I will teach and assign problems using the book
Corporate Finance by Jonathan Berk and Peter
DeMarzo, Perason
Alternative Reading
Further/alternative reading is Brealey, Myers and
Allen, Principals of Corporate Finance, McGraw-Hill
Irwin, 8th edition or higher
Buying the book?
I do recommend buying the book
• The course is built around the text book
• Excellent reference book for those to plan to
work in the area of corporate finance
• Taught in leading B schools around the world
Group Assignments
• I encourage work in groups
• Groups are limited to four students
Grade
• Homework assignments: 30%
• Data Case: 5%
• Final exam: 65%
Office hours
• appointment by email
• welcome to stop by my office
• Send specific questions by email
Course Schedule
(tentative)
Course schedule
August 28
Introduction
Time value of money
• Future value, present value, discounting
stream of cash flows
• Annuities, perpetuities, growing annuities and
growing perpetuities
Course schedule
September 4
Time value of money continued
September 11
Interest rates
• APR, EAR, Amortizing loans
• Nominal and Real interest rates
• The Term Structure of Interest Rates
Practice questions CH3,4 due
Course schedule
September 18
Investment Decision Rules
• NPV, Payback period,
IRR, EVA
• Multiple investment
opportunities
• Resource constraints,
Profitability Index
Practice Questions CH5
due
September 25
Pricing Risk
• Risk and return
• Expected return, Volatility
• Calculating realized returns
• Excess returns
• Systematic and
Idiosyncratic risk
• Diversification
• CAPM
Practice questions CH6 due
Course schedule
October 2
Review Homework
assignments and
solutions with Ming
the teaching assistant
October 12
Tentative Make up class
9:00-12:00
October 9
Stock Valuation
Bond Valuation
Practice questions
CH10 and Data Case
chapter 10 due
October 16
Final 6:00-9:00
Questions before we start?