Free Online Courses: Finance I

This course offers a foundational overview of corporate finance and investments, emphasizing the principles and tools that enable businesses and individuals to make sound financial decisions. Modeled on an Ivy League Finance curriculum, it explores how organizations raise and allocate capital, measure and manage risk, and optimize their capital structure to create value. Students will learn why finance is essential to every functional area of a firm, how financial markets operate, and how concepts like the time value of money, asset valuation, and risk-return trade-offs underpin investment and financing choices.

Through lectures, readings, and case-based discussions, the course provides a structured pathway—from understanding financial statements and cash flows, to applying capital budgeting techniques, to exploring modern portfolio theory and the use of derivatives for hedging. Real-world examples are used throughout to illustrate how theoretical models guide strategic decisions such as mergers and acquisitions, dividend policies, and international finance considerations. Upon completing this course, students will grasp the critical role of finance in achieving corporate objectives and delivering shareholder value.

Course Objectives

By the end of the course, you should be able to:

1. Explain the role of finance in business and value creation, identifying how sound financial decisions support all functional areas of a firm.

2. Describe the structure and purpose of financial markets and institutions, distinguishing between direct and indirect finance and primary vs. secondary markets.

3. Interpret and analyze financial statements, using key metrics to evaluate a firm’s performance and generate cash flow forecasts.

4. Apply time value of money concepts such as present and future value, net present value (NPV), and internal rate of return (IRR) to assess investment opportunities.

5. Value bonds and stocks under different interest rate environments and market conditions.

6. Employ investment decision criteria and capital budgeting techniques, focusing on NPV, IRR, payback period, and incremental cash flow analysis.

7. Assess risk and return, understanding diversification, the efficient frontier, and the Capital Asset Pricing Model (CAPM).

8. Discuss market efficiency and behavioral finance, recognizing how psychological biases can affect investor and market behavior.

9. Determine a firm’s cost of capital (WACC) and evaluate how capital structure decisions (debt vs. equity) influence risk, return, and overall firm value.

10. Examine how firms raise capital through equity and debt, including IPOs, venture capital, and corporate bond issuance.

11. Utilize basic derivatives (options, futures) for hedging and risk management, applying fundamental option pricing concepts and strategies.

12. Analyze major corporate finance events, such as mergers and acquisitions, and understand cross-border finance and exchange rate risk.

13. Formulate dividend policy decisions, balancing retained earnings, shareholder payouts, and market signals.

14. Manage working capital, ensuring liquidity and operational efficiency in the short term to support a firm’s long-term financial health.

Table of Contents

• Lesson 1: Introduction to Finance and Value Creation

• Lesson 2: Financial Markets, Institutions, and Intermediation

• Lesson 3: Understanding Financial Statements and Cash Flows

• Lesson 4: Time Value of Money – Concepts and Calculations

• Lesson 5: Bond Fundamentals and Interest Rates

• Lesson 6: Stock Valuation and Equity Markets

• Lesson 7: Investment Decision Criteria and Capital Budgeting Basics

• Lesson 8: Capital Budgeting in Practice – Cash Flow Analysis

• Lesson 9: Risk and Return – Principles of Diversification

• Lesson 10: Modern Portfolio Theory and the Efficient Frontier

• Lesson 11: The Capital Asset Pricing Model (CAPM)

• Lesson 12: Market Efficiency and Behavioral Finance

• Lesson 13: Cost of Capital and Required Returns

• Lesson 14: Capital Structure Theory – Debt vs. Equity Mix

• Lesson 15: Capital Structure in Practice – Trade-Offs and Financial Distress

• Lesson 16: Equity Financing – Raising Capital through Equity Issuance

• Lesson 17: Debt Financing – Loans, Bonds, and Credit Markets

• Lesson 18: Introduction to Derivatives and Risk Management

• Lesson 19: Option Pricing and Investment Strategies

• Lesson 20: Futures Contracts and Other Derivatives

• Lesson 21: Mergers and Acquisitions (M&A) Overview

• Lesson 22: International Finance and Exchange Rate Risk

• Lesson 23: Dividend Policy and Retained Earnings

• Lesson 24: Working Capital Management and Short-Term Financial Planning