APS1016H: Financial Management for Engineers

This course will focus on valuation of public companies, in particular new technology, and new economy and natural resources companies. The students will be exposed to classical equity valuation methods; such as discounted cash flow analysis, Net asset value, fundamental analysis and relative value analysis, using measures such as P/E multiples and P/Cash flow multiples. The students will be introduced to the principles of Bond and Stock valuations with a special emphasis on its relation to the cost of capital. The course will take an in depth view of capital budgeting, capital investment decisions and project analysis and evaluations. It will introduce students to the concept risk and return in equity markets. The students will get hands on experience in calculating cost of capital and hence the appropriate discount rate to use in valuations. Theory of optimal capital structure and financial leverage will be discussed in addition to economic value added principles. The relevance of dividends and dividend policy will be debated in class. The concept of "does dividend policy matter" will be subject of a vigorous debate. Finally the topic of mergers and acquisitions will be covered in depth, with particular reference to recent mergers of Canadian companies.

0.50
St. George
In Class