FIN60100/FIN6010 - Advanced Finance and Managerial Accounting

(3 units)

This course comprises two segments - managerial accounting and advanced finance. Roughly one third of the course time is devoted to topics in the area of managerial finance and about two third to topics in Advanced Finance. In managerial accounting, the course looks at cost concepts, job-order costing, activity-based costing, flexible budgets, standard costs, and variance analysis. Finally, this segment of the course delves into using differential analysis to make important managerial decisions such as adding and dropping product lines, the make or buy decision, special orders, and use of constrained resources. The second segment does a deep dive into some advanced finance topics in the area of options, capital structure, risk and return, and lease financing. The formulation of binomial option pricing and Black Scholes Option Pricing are studied and applied to the valuation of firm and financial products whose valuation is contingent upon future uncertain outcomes. Real options are studied with respect to their application in capital budgeting decisions. Modigliani and Miller Theorems, the Miller Model and their extensions form the core of the capital structure considerations. Portfolio theory, CAPM, the Arbitrage Pricing Theory and the Fama French Three Factor Model provide students with insight into risk and return relationships. Finally, the course winds down with a discussion of lease financing.