70-391 Finance
9 units, Carnegie Mellon University
Firms create value by making good investment decisions. Finance is the field of management science tasked with making this happen. It is a set of tools with which firms identify good investments and decide how to pay for them. Paying for them ultimately involves getting money from households. Therefore, finance also describes the investment decisions of households and the resulting allocation of the economy's resources across firms and time. This course is the introductory finance course in the undergraduate business program. The main topics covered in the course are Financial Markets, Net Present Value, The Objective of the Firm, Discounted Cash Flow, Portfolio Theory and the Cost of Capital, The Efficient Markets Hypothesis, The Capital Structure of the Firm, and Business Valuation. Time permitting, the course will also provide an introduction to option markets and derivative securities. Upon completing the course a student will be able to consider a large and complex business problem, make some assumptions, structure the firms' cash flows in a spreadsheet, calculate the value of different solutions to the problem, and make a decision.
Prerequisites: (73-104 or 73-102 or 73-100) and (70-207 or 36-217 or 36-218 or 36-207 or 36-235 or 36-220 or 36-225 or 36-200 or 36-201)
Offered: Spring 2027, Fall 2026, Summer 2026, Spring 2026, Fall 2025
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